FEDERAL COURT OF AUSTRALIA Brown v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2001] FCA 1450 INDUSTRIAL LAW – validation proceedings – whether orders should be made validating the appointment of officers – where Branch President died after nominations closed but before election results declared – where positions filled by appointment of existing committee members to new roles. INDUSTRIAL LAW – rule to show cause – whether order should be made under s 257 to set aside presumption of validity under s 255 – where alleged that the committee did not act bona fides – where alleged that one committee member was aware that he was ineligible to vote on the committee but voted regardless. Workplace Relations Act 1996 (Cth) ss 255, 257 & 258 BARRY BROWN v COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA N 1372 of 2000 BRIAN WHELAN V BARRY BROWN, GREG EDWARDS, STEVE McCARNEY, TODD ANNING, ADAM STONE, MARK BAIRD, BEVAN CZARNECKI, GLENN LANE, BRUCE PALMER, TOM POPE N223 of 2001 MOORE J 17 OCTOBER 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N1372 OF 2000 BETWEEN: BARRY BROWN APPLICANT AND: THE COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA RESPONDENT IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N223 of 2001 BETWEEN: BRIAN WHELAN APPLICANT AND: BARRY BROWN, GREG EDWARDS, STEVE McCARNEY, TODD ANNING, ADAM STONE, MARK BAIRD, BEVAN CZARNECKI, GLENN LANE, BRUCE PALMER, TOM POPE RESPONDENT JUDGE: MOORE J DATE OF ORDER: 17 OCTOBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS AND DECLARES THAT: 1. An invalidity has occurred in the management and administration of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ("CEPU") in that Mr Bruce Palmer was appointed to a vacant position as a member of the Committee of Management of the New South Wales Branch of the Plumbing Division of the CEPU on 8 June 1999 contrary to the rules of the organisation. 2. The decision dated 8 June 1999 appointing Mr Bruce Palmer as a member of the Committee of Management of the New South Wales Branch of the Plumbing Division of the CEPU be, and is hereby, validated under s 258 of the Workplace Relations Act 1996 (Cth). 3. Proceedings N1372 of 2000 otherwise be dismissed. 4. Proceedings N223 of 2001 be dismissed. 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 N1372 OF 2000 BETWEEN: BARRY BROWN APPLICANT AND: THE COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA RESPONDENT IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N223 OF 2001 BETWEEN: BRIAN WHELAN APPLICANT AND: BARRY BROWN, GREG EDWARDS, STEVE McCARNEY, TODD ANNING, ADAM STONE, MARK BAIRD, BEVAN CZARNECKI, GLENN LANE, BRUCE PALMER, TOM POPE RESPONDENT JUDGE: MOORE J DATE: 17 OCOTBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction 1 These proceedings concern two applications raising issues about the management of the New South Wales Branch ("the NSW Branch") of the Plumbing Division of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ("the Union"). The first application was filed on 21 December 2000 under s 258 of the Workplace Relations Act 1996 (Cth) ("the Act") seeking orders concerning an alleged invalidity in the management of the NSW Branch ("the validation application"). The validation application was amended on 21 June 2001. The second application was filed on 12 March 2001 and took the form of an application by Mr Brian Whelan for a rule to show cause brought under s 209 of the Act. In that application, Whelan sought orders requiring observance of the rules of the Union ("the compliance application") as well as a declaration under s 257 of the Act. 2 The validation application was before the Court for directions on several occasions. After an initial and unsatisfactory notice was sent to the members of the NSW Branch, a further notice was sent to the members advising them of the proceedings and advertisements to similar effect were placed in newspapers. In the result, several members appeared to oppose the validation application including the applicant in the compliance application. Where appropriate I will refer to them collectively as the opponents. The background 3 Both the validation application and the compliance application concern events in the NSW Branch flowing directly or indirectly from the death of Mr Ian Johnson on 28 April 1999. In April 1999 quadrennial elections were held for offices in the NSW Branch ("the April 1999 elections"). Nominations closed on 27 April 1999. Johnson had nominated for election to the position of NSW Branch President and was the only person to do so. The same was true for the other positions in the April 1999 elections. That is, the elections were uncontested. Notwithstanding Johnson's death, the returning officer, Mr Masters from the Australian Electoral Commission, declared the results of the election on 12 May 1999 which included a declaration that Johnson had been elected to the position of NSW Branch President. There was unchallenged evidence that Masters was made aware of Johnson's death on the day he died. 4 On 8 June 1999, the committee of management of the NSW Branch ("the committee") met. The committee was constituted by officers elected in the April 1999 elections. The committee proceeded to fill the vacancy in the office of Branch President by "endorsing" Mr Bruce Palmer to take a position on the committee, "endorsing" the election of Mr Greg Edwards to the position of Branch President and "endorsing" the election of Mr Tom Pope to the position of Branch Vice-President. Edwards had been elected in the April 1999 elections to the position of Branch Vice-President and Pope to a position of Branch committee member. Palmer had not contested the April 1999 elections and the reasons for his selection for appointment to the committee are not clear. These arrangements endured for almost a year. 5 Evidence was given by Mr Warren West, the Branch Secretary of the NSW Branch at that time, about the circumstances leading to the decision of the committee to make the appointments on 8 June 1999. His evidence was not challenged in cross examination and I accept it. His evidence was that on 28 April 1999, he learnt of Johnson's death. He then asked the Branch office manager to contact the Australian Electoral Commission and seek their advice about the correct procedure to be followed. The uncontroverted evidence of the office manager was that she spoke to Masters (the returning officer) who told her not to worry about the nomination of Johnson and that he would fix it up and get back to West. West's evidence was that he spoke to Masters either later in the day on 28 April 1999 or the following day. Masters told West that the death of Johnson would not affect the nominations because there were no contested positions and also, even without Johnson, there was a sufficient number of nominations to fill the positions on the committee. West said that Masters informed him that the correct procedure would be for the person nominated as the Vice-President to move to the position of President. West also said that Masters told him "the committee of management could vote up the Vice-President to the President's position". West spoke to the National Secretary of the Plumbing Division about the matter who, after being told of the conversation between West and Masters, said he could see nothing wrong with proceeding along those lines if that was the advice given. West informed the committee of management at their meeting on 8 June 1999 of the advice he had been given. While Masters did not give evidence (it appears he is retired), there is some evidence that efforts were made on behalf of the solicitors acting for Mr Barry Brown (the applicant in the validation application) to have him give evidence. However, as I earlier indicated, West's evidence was not challenged and, in any event, the approach taken by the committee was without dissent within the committee. 6 At a meeting of the committee on 9 May 2000, West resigned as Branch Secretary. He had been elected to the position in the April 1999 elections. A motion was put that Brown be "endorsed" as Branch Secretary (described in the minutes as State Secretary). Brown had been in elected Branch Assistant Secretary in the April 1999 elections. The motion was passed four votes to three. One of the dissentients was Whelan. There was an issue about the date on which West's resignation was to take effect. The evidence was equivocal. On one hand it was said that West wrote in a letter that his resignation was to be effective on 14 May 2000, though a copy of the letter has never been produced. There is, however, a reference to a letter in the minutes of the meeting. However the minutes also record that Brown was endorsed as the "State Secretary" and reference was later made to West as the "former State Secretary". Evidence about what happened from those who attended the meeting (which is the best evidence of what occurred) did not paint a consistent or clear picture. Nonetheless, I am satisfied, having regard to the evidence of West, that he offered his resignation at the meeting of 9 May 2000 on the basis that it was to be effective 14 May 2000. 7 The next meeting of the committee was held on 30 May 2000 at 4:15pm. A general meeting of the NSW Branch was also held on 30 May 2000 at which a letter from a Mr Brian Hunt was tabled raising questions about the filling of casual vacancies within the NSW Branch. 8 On 5 June 2000 Brown wrote, in his capacity as Branch Secretary, to Mr Peter Tighe who was National Secretary of the Union. Brown recounted the history of vacancies in some of the offices in the NSW Branch (including those already referred to) and sought Tighe's advice as to whether "the actions of the Branch have been in accordance with our Rules". Brown also asked "what powers the Branch Committee of Management has to appoint and what powers a special meeting has in that regard". 9 On 6 June 2000 there was a further meeting of the committee. There was some discussion about the ability of Mr Stephen McCarney to vote on the committee and also about the role of the trustees. On 13 June 2000 Tighe wrote to Brown responding to his letter of 5 June 2000. While the letter bore the date 13 June 2000, it was faxed to the NSW Branch office at 4:56pm on 9 June 2000. Brown's evidence, which I accept, was that he did not see the letter until the following Monday, 12 June 2000. In his letter, Tighe expressed the opinion that the filling of the position of Branch President following Johnson's death and consequential appointments had not been in accordance with the rules. However, he also expressed the view that the situation could be remedied by the committee exercising a power pursuant to rule 52 of the Divisional Rules. I will refer to the structure of the rules shortly. Tighe also expressed the opinion that, while it was a matter for the committee, it was not necessary to fill the position of Branch Assistant Secretary. 10 The committee met again on 14 June 2000. The letter from Tighe was tabled. A motion was put and passed declaring the action (of earlier appointments) was wrong and that Edwards be appointed Branch President. That motion was moved by McCarney and seconded by Palmer. Nominations were then called for the position of Vice-President. Two people nominated. One was Pope who had earlier been appointed to the position and another was Mr Bevan Czarnecki. The minutes record that Czarnecki was "voted in as Vice President". 11 On 18 August 2000 a mass meeting of members of the NSW Branch was held at the Salvation Army Hall in Castlereagh Street, Sydney. The meeting was chaired by Mr Brian O'Reilly. The minutes contain what appears to be a record of a motion put to the meeting in the following terms: Motion: That an Assistant Secretary be appointed at the appropriate time ie at the next special branch meeting. ENDORSED 12 On 26 September 2000 the committee met. One matter dealt with by the committee concerned the position of Assistant Branch Secretary. A motion was put by Brown and seconded by Czarnecki that "(u)nder Rule 52.1 Barry Brown sought endorsement of the COM for the appointment of Adam Stone as the Assistant Secretary effective immediately". The vote was five for and two against. The rules of the Union 13 In order to understand the issues raised in these proceedings, it is necessary to refer to some of the rules of the Union. Section "C" of the rules regulates the Plumbing Division. Rule 48 of the Division concerns the management of Branches. Rule 48.1 provides that there are Branches of the Division in each State (and the ACT). Rule 48.2 deals with the committee of management and relevantly provides: "48.2 Committee of Management The business of each Branch and sub-Branch shall subject always to the review and control of a Special or General Meeting of the Branch, be conducted by a Committee of Management consisting of: 48.2.1 Branch President; 48.2.2 Branch Vice President; 48.2.3 Branch Secretary; 48.2.4 Branch Assistant Secretary (if any); 48.2.5 Two Branch Trustees; 48.2.6 Branch Organisers (if any); and 48.2.7 not more than nine (9) other Committee members, the number of whom shall be determined by the Branch at Annual Meeting or Special Meeting of the members, of whom one, in the case of the New South Wales Branch, shall be elected exclusively by and from the members of that Branch attached to the Newcastle sub-Branch and of whom, one, in the case of the Victorian Branch shall be elected exclusively by and from the members of that Branch attached to the Geelong sub-Branch. Provided always that full time officers of the Branch shall not exercise a vote at any meeting of the Committee. 48.3 A majority of the members of the Committee shall form a quorum." 14 It can be seen that in the opening words of rule 48.2 reference is made to Special and General Meetings of the Branch. Such meetings are regulated by rule 61 of the Division which relevantly provides: "61 – BRANCH MEETINGS 61.1 Branch Meetings, except as provided for in Sub-rule 48.4.4, shall not commence earlier than 5.30 p.m. nor continue later than 9.30 p.m. unless a motion be agreed to by a majority of the members present provided that Branch meetings do not extend beyond two (2) hours with a maximum of one half (1/2) hour extension of time. (That is: Branch Meetings will continue for no longer than two and one 2 ˝) half hours.) 61.2 Wherever possible, each Branch shall have its office and place of meeting in the buildings of the recognised Trades and Labor Institutions or at such other place as may from time to time be determined by the members of such Branch. 61.3 The Annual Meetings for the reception of the Balance Sheet and Financial Statement shall be held on the last meeting night in June of each year. 61.4 Notice of all Special or General Summoned Meetings shall be given by an advertisement in a daily paper, or by summon notice forwarded, at least two days prior to time of meeting, to each member, to the address last recorded by the Secretary or at the office of the Branch. Convening Branch Meetings 61.5.1 The Committee of Management shall when deemed necessary, have power to call a Special Meeting, for any time or at any place; 61.5.2 the President and Secretary shall convene a Special Summoned Meeting of the Branch members at the written request of any number of financial members, which shall be not less than 5% of the membership of the Branch." 15 Officers of a Branch are elected every four years. The elections are regulated by rule 49 of the Division which relevantly provides: "49 – BRANCH ELECTIONS 49.1 Elections shall be held in 1995 and every four (4) years thereafter for the following Branch Officers and representatives: 49.1.1 Branch President; 49.1.2 Branch Vice-President; 49.1.3 two Branch Trustees; 49.1.4 the number of Branch Committee Members not exceeding nine (9) as determined by the Branch pursuant to Rule 48 'Management of Branches'; 49.1.5 the Federal Vice-President to which the Branch is entitled pursuant to Rule 19.1; 49.1.6 the Federal Councillor or Councillors (if any) to which the Branch is entitled pursuant to Rule 19.1; 49.1.7 Branch Secretary; 49.1.8 Branch Assistant Secretary (if any); and 49.1.9 Branch Organisers (if any). 49.1.10 Branch Delegate to National Council (if any required under Sub-rule 19.4) 49.2 The Branch Returning Officer shall call for nominations for election to each of the offices in Sub-rule 49.1. Each nomination shall be in writing and shall be signed by the candidate." 16 The rules make provision for the filling of casual vacancies and do so in a way seemingly consistent with s 200 of the Act. Rule 52 of the Division relevantly provides: "52 – CASUAL VACANCIES, SUSPENSION OR REMOVAL OF BRANCH OFFICERS AND MEMBERS OF BRANCH COMMITTEES OF MANAGEMENT 52.1 Casual Vacancies 52.1.1. Where a casual vacancy occurs in the office of Branch President, Branch Vice-President, Branch Secretary, Branch Assistant Secretary, Branch Trustee, Branch Organiser, Branch Committee members, Federal Vice-President, Federal Councillor or Branch delegate to National Council, such vacancy may be filled by appointment by the Branch Committee of Management of a member of the Union eligible to nominate for and hold the office pursuant to Rules 48 'Management of Branches' and 49 'Branch Elections'. The member so appointed shall hold the office in accordance with these Rules for so much of the unexpired part of the term of office as does not exceed three quarters of the term of the office. 52.1.2 Where the unexpired part of the term of the office exceeds that specified in Sub-rule 52.1.1, the vacancy may be filled by ordinary election so far as practicable in accordance with the provisions of Rules 48 'Management of Branches' and 49 'Branch Elections' for the unexpired part of the term of the office. 52.1.3 In this Sub-rule: 'ordinary elections' means an election in accordance with Rules 48 'Management of Branches' and 49 'Branch Elections'; 'term' in relation to the office means the total period for which the last person elected to the office by an ordinary election (other than an ordinary election to fill a casual vacancy in the office) was entitled by virtue of that election to hold the office in accordance with these Rules without being re-elected." 17 Reference should be made to some aspects of the rules which identify the duties of several of the offices to which these proceedings relate. Rule 53 of the Division deals with the office of Branch President and relevantly provides: "53 – BRANCH PRESIDENT 53.1 The President, so far as possible, shall – 53.1.1 preside at all meetings of the Branch and superintend the discussion of all business tabled for consideration; 53.1.2 sign all minutes of meetings when confirmed, vouchers and other documents to which his/her signature is requisite; 53.1.3 be ex-officio President of all committees; 53.2 The Branch President or Chairperson for the time being shall exercise a deliberative vote only. In the event of the voting upon any question before any meeting in the Branch being equal, it shall pass in the negative." 18 Rule 54 of the Division deals with the office of Branch Vice-President and provides: "54 – BRANCH VICE-PRESIDENT 54.1 The Vice President shall take the chair in the absence of the President, and shall also then have and may exercise all the powers of the President. 54.2 In ordinary cases the Vice-President shall assist the President in maintaining order at the meetings of the Branch." 19 Rule 55 of the Division deals with the office of Branch Secretary and relevantly provides: "55 – BRANCH SECRETARY 55.1 The Branch Secretary shall be elected by the members, as provided for in Rule 49 'Branch Elections', and shall receive such salary as the Divisional Council may from time to time determine. 55.2 The Branch Secretary shall: [various duties are set out]." 20 Rule 56 of the Division deals with the office of Branch Assistant Secretary and provides: "56 – BRANCH ASSISTANT SECRETARY OR ORGANISER 56.1 A Branch may determine at Annual Meeting or Special Meeting of members to establish the offices of Branch Assistant Secretary and/or Branch Organiser in which event such officers shall be elected pursuant to Rule 49 'Branch Elections'. The salary of each such officer shall be as the Divisional Council may from time to time determine. 56.2 Such officer or officers as may be so elected shall generally assist in conducting the business of the Branch under the direction of the Secretary and shall carry out the duties of the Secretary during his/her temporary absence." The legislative framework 21 Under s 258 of the Act the Court has the power to determine and declare whether an invalidity has occurred, inter alia, in the appointment of a person and to rectify or validate any invalidity which has occurred. Section 258 provides: "258(1) An organisation, a member of an organisation or any other person having a sufficient interest in relation to an organisation may apply to the Court for a determination of the question whether an invalidity has occurred in: (a) the management or administration of the organisation or a branch of the organisation; (b) an election or appointment in the organisation or a branch of the organisation; or (c) the making or alteration of the rules of the organisation or a branch of the organisation. (2) On an application under subsection (1), the Court may make such declaration as it considers proper. (3) Where, in a proceeding under subsection (1), the Court finds that an invalidity of the kind referred to in that subsection has occurred, the Court may make such order as it considers appropriate: (a) to rectify the invalidity or cause it to be rectified; (b) to negative, modify or cause to be modified the consequences in law of the invalidity; or (c) to validate any act, matter or thing rendered invalid by or because of the invalidity. (4) Where an order is made under subsection (3), the Court may give such ancillary or consequential directions as it considers appropriate. (5) The Court shall not make an order under subsection (3) without satisfying itself that such an order would not do substantial injustice to: (a) the organisation; (b) any member or creditor of the organisation; or (c) any person having dealings with the organisation. …" 22 It can be seen that the Court is not to make an order rectifying or validating any act that would otherwise be invalid unless the Court is satisfied that such an order would not do substantial injustice to certain affected persons or parties. However, even in the absence of an order under s 258, all acts done in good faith by a collective body either constituted by or including persons later discovered to be invalidly appointed or elected or acts done in good faith by such a person themselves are presumptively valid by operation of s 255 of the Act which relevantly provides: "255(1) Subject to this section and section 257, all acts done in good faith by a collective body of an organisation or branch of an organisation, or by persons purporting to act as such a collective body, are valid in spite of any invalidity that may later be discovered in: (a) the election or appointment of the collective body, any member of the collective body or the persons or any of the persons purporting to act as the collective body; or (b) the making or alteration of a rule of the organisation or branch. (2) Subject to this section and section 257, all acts done in good faith by a person holding or purporting to hold an office or position in an organisation or branch are valid in spite of any invalidity that may later be discovered in: (a) the election or appointment of the person; or (b) the making or alteration of a rule of the organisation or branch. (3) For the purposes of this section: (a) a person shall not be treated as purporting to act as a member of a collective body of an organisation or as the holder of an office or position in an organisation unless the person has, in good faith, purported to be, and has been treated by officers or members of the organisation as being, such a member or the holder of the office or position; and (b) a person shall not be treated as purporting to act as a member of a collective body of a branch of an organisation or as the holder of an office or position in the branch unless the person has, in good faith, purported to be, and has been treated by officers or members of the branch as being, such a member or the holder of the office or position. (4) For the purposes of this section: (a) an act is to be treated as done in good faith until the contrary is proved; (b) a person who has purported to be a member of a collective body of an organisation or branch is to be treated as having done so in good faith until the contrary is proved; (c) knowledge of facts from which an invalidity arises is not of itself to be treated as knowledge that the invalidity exists; (d) an invalidity in: (i) the election or appointment of a collective body of a branch of an organisation or any member of such a collective body; (ii) the election or appointment of the persons or any of the persons purporting to act as a collective body of a branch; (iii) the election or appointment of a person holding or purporting to hold an office or position in a branch; or (iv) the making or alteration of a rule of a branch; shall not be treated as discovered before the earliest time proved to be a time when the existence of the invalidity was known to a majority of the members of the committee of management of the branch or to a majority of the persons purporting to act as the committee of management; and (e) an invalidity in any other election or appointment or in the making or alteration of a rule to which this section applies shall not be treated as discovered before the earliest time proved to be a time when the existence of the invalidity was known to a majority of the members of the committee of management of the organisation or to a majority of the persons purporting to act as that committee of management. …" 23 The presumptive validity created by s 255 can be negatived by an order under s 257 of the Act which relevantly provides: "257(1) Where, on an application for an order under this section, the Court is satisfied that the application of section 255 or 256 in relation to an act would do substantial injustice, having regard to the interests of: (a) the organisation; (b) members or creditors of the organisation; or (c) persons having dealings with the organisation; the Court shall, by order, declare accordingly. (2) Where a declaration is made under subsection (1), section 255 or 256, as the case requires, does not apply, and shall be taken never to have applied, in relation to the act specified in the declaration. (3) The Court may make an order under subsection (1) on the application of the organisation, a member of the organisation or any other person having a sufficient interest in relation to the organisation. … (5) A reference in this section to an act includes a reference to an election, purported election, appointment or purported appointment, and to the making or purported making or alteration or purported alteration of a rule." The issues in the proceedings 24 It was common ground that the appointments of Edwards as Branch President, Pope as Branch Vice-President and Palmer as a Branch Committee Member in June 1999 were invalid. It was also ultimately common ground that the appointments of Brown as Branch Secretary in May 2000, Edwards as Branch President in June 2000, Czarneki as Branch Vice-President in June 2000 and Stone as Branch Assistant Secretary in September 2000 were invalid because of the invalid appointments in June 1999. These conceded invalidities raise the following issues. Many of these issues were identified and addressed in a series of written submissions filed by both parties after the hearing. The various submissions were structured in a way that had the result that it was not entirely clear what the issues were. What follows is my understanding of them. (i) Whether an order should be made under s 258 declaring that an invalidity has occurred in relation to the appointment of persons to the positions of President, Vice-President and Branch Committee Member in June 1999; and (ii) Whether an order should be made under that section validating the appointment of those persons having regard to whether the making of such an order would do substantial injustice to the Union or any member or creditor of the Union or to any person having dealings with the Union. (iii) Whether the invalid appointments of Brown as Branch Secretary in May 2000, Edwards as Branch President in June 2000, Czarneki as Branch Vice-President in June 2000 and Stone as Branch Assistant Secretary in September 2000 are presumptively valid by operation of s 255 of the Act. (iv) Whether, if the appointments referred to in (iii) are presumptively valid, an order should be made under s 257 declaring that the application of s 255 would do substantial injustice having regard to the interests of the Union, members or creditors of the Union or persons having dealings with the Union. (v) Whether: (a) the appointment of Brown as Branch Secretary in May 2000. (b) the appointment of Stone as the Assistant Branch Secretary in September 2000 were invalid, apart from the operation of s 255. Re (i): The order under s 258 25 As I understood the position of the opponents in the validation application, it was not suggested that an order should not be made declaring that an invalidity has occurred in relation to the three appointments in June 1999. The contentious issue is whether an order should be made validating those appointments. Re (ii): The validating order under s 258 26 An order rectifying the invalidity can only be made under s 258(3) if the Court is satisfied about the matters described in subs (5). Apart from the specific matters which must be addressed, other considerations can arise. In Re Food Preservers' Union (1988) 79 ALR 138 at 144, Northrop and Ryan JJ noted in relation to the legislative predecessor of this provision that it is remedial in nature and the Court should form a broad view of the power conferred by the section. Their Honours noted that the Court should not take a narrow or technical approach to the exercise of the power and that an important factor is whether the organisation and its officers have acted honestly. In the present matter there was no suggestion, as I understand the submissions, that the officers of the NSW Branch did not act honestly in June 1999 when the appointments were made. They acted on what they understood to be the advice of the Australian Electoral Commission. I have already indicated that I accept the evidence of West concerning his present recollection of the conversation with Masters and that I accept what occurred reflected his understanding of the advice he had been given. Whether, in fact, that advice was given in precisely the terms West now recalls does not matter. What is relevant is that the committee of management acted bona fide on the understanding they had of the advice that had been given and did so without dissent in circumstances where two of the officers assuming the new offices (Edwards and Pope) had just been elected unopposed (though to other positions) in the 1999 elections. 27 The thrust of the opposition of the opponents to an order under s 258 appeared to be that Brown has not acted in good faith in making the validation application. In summary, the contention was that Brown knew by mid 2000 of the problem concerning the appointments made in June 1999 but made no application to this Court, did not take the opportunity to resolve the matter in a "neutral" way when the further appointments were made in June 2000 and acted in a partisan way conformable with his factional political interests within the NSW Branch. It was also submitted by the opponents that the making of the validation application was not considered by the committee of management before the application was made. The opponents relied on a petition containing 278 signatures purportedly of financial members of the NSW Branch opposing the orders sought in the validation application in the sense that they opposed "orders confirming in office until the next elections the Branch President and Vice-President" and indicating a desire that an election be held for the positions as soon as possible though there was evidence led on behalf of Brown designed to contradict the petition. I view the petition and related evidence as being of limited evidentiary worth. 28 The purpose of s 258 was (as to a statutory predecessor) described by Sweeney J in Re Professional Radio and Electronics' Institute of Australasia (9 May 1979, Federal Court of Australia, unreported) at p.13 in the following way: "[The section] is I think clearly designed to provide a means firstly whereby organisations may avoid long investigations into past matters with a view to obtaining orders that certain acts were invalid …. Primarily it is I think designed to enable orders to be made where there have been invalidities which have occurred unwittingly or perhaps where they have occurred knowingly but extreme difficulty would be found in curing them." 29 The invalid appointment of certain of the office holders in June 1999 potentially impacts on the legality of the administration of the NSW Branch for approximately a year. However the participation in the administration of an organisation by persons invalidly appointed to an office and/or their acting as members of a committee of management in an organisation is validated by s 255 (see eg Johnson v Beitseen (1988) 41 IR 395 at 409-410) unless an order is made under s 257. But in the present matter what is sought to be validated are not activities or steps taken as part of the management of the NSW Branch which may be invalid because of the irregular appointments of officers but the irregular appointments themselves. 30 Subject to certain specific issues raised by counsel for the opponents about the later appointments made in 2000, orders validating the appointments made in June 1999 could be viewed as providing a more secure legal foundation for those later appointments and the activities of the committee of management during the period. Those appointments were attacked both directly (by the application by Whelan for orders under s 209) and indirectly (by the application by Whelan for a declaration under s 257 that s 255 not apply to those appointments) by the opponents. In my opinion, the question of whether orders should be made under s 258 in relation to the June 1999 appointments cannot be divorced from a consideration of the attack on the appointments made in 2000. I now turn to that issue. Re (iii) and (iv): the operation of s 255 and s 257 on the appointments in 2000 31 It is important to address one legal issue which bears upon the submissions made in relation to whether an order should be made under s 257 effectively invalidating the 2000 appointments (and the legal issue is also relevant to whether an order should be made under s 258 validating the June 1999 appointments). Various submissions were made by the opponents in opposition to an order under s 258 and in support of an order under s 257 that Brown had not acted in good faith (it was put in various ways), that the committee of management had not acted in good faith (again it was put in various ways) and that McCarney was not entitled to vote on the committee because of the position he held (and that he had acted contrary to advice in doing so). 32 There is a well settled principle to the general effect that if evidence is to be called contradicting a witness' evidence or a submission is to be made that inferences can be drawn from other evidence which establishes that the witness' account is wrong, that witness should be given the opportunity of commenting on the contradictory account of the matters to which his or her evidence relates. This principle, deriving from Browne v Dunn [1894] 6 R 67, extends to situations where an adverse comment may be made about the witness concerning, for example, their motives: see White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 216 et seq and Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134 at 147-148. Different considerations arise if notice has been given that the evidence will be challenged. 33 In the present matter counsel appearing for Brown submitted that the matters relied upon by the opponents referred to in [31] above, were not put to Brown or McCarney. However it is relatively clear from the opponents' contentions filed on 16 July 2001 in the validation proceedings, that failure to act in good faith was to be alleged and particulars were provided which traversed, in substance, most, if not all, the contentious matters. Similarly, in the contentions in the compliance proceedings filed on 24 May 2001, counsel for Whelan contended that McCarney was a full-time officer of the NSW Branch who had been elected as an organiser. In my opinion, Brown and those acting for him were on notice of the contentious matters. I do not accept that the opponents cannot rely on the submissions they have made. 34 Section 255 operates, in specified circumstances, to validate acts done in good faith by a collective body or a person holding or purporting to hold office. Section 255(4) creates a presumption that an act is to be treated as done in good faith until the contrary is proved. In the submissions of the opponents various matters were referred to which imply that the committee (though reference is sometimes made to Brown only) did not act in good faith in making the various appointments in 2000. There was one reference to good faith in the context of a rolled up submission concerning both s 255 and s 257 though in a way that does not make it entirely clear whether it was being submitted that s 255 does not operate to validate the appointments made in 2000. I will assume that the submission was directed to that issue and also the issue of whether an order should be made under s 257 in relation to all or any of the appointments made in 2000. 35 It was relatively clear from the cross-examination of West, that in choosing to resign effective 14 May 2000, he was conscious that he would be bringing about a situation (as he believed it) where the position of Branch Secretary could be filled by appointment as a casual vacancy on the basis that he had occupied the position for more than a quarter of the term of office. It may well be that Brown and his supporters were also aware of the significance of the timing. However that, in my opinion, does not, of itself, displace the statutory presumption that the committee of management acted in good faith in appointing Brown. The appointment of Brown is validated by operation of s 255 notwithstanding the participation in the committee of officers who were invalidly appointed in June 1999. 36 There is, however, an additional matter raised by the opponents. It concerns the involvement of McCarney. It is to be recalled that rule 48.2.7 (see [13] above) contains a proviso that full-time officers of the Branch cannot vote at meetings of the committee. The opponents contended that McCarney was a full-time elected organiser notwithstanding his election in the 1999 elections to the position of Branch Committee Member. The evidence concerning the status of McCarney within the NSW Branch is obscure. As just noted he was elected in 1999 to the position of Branch Committee Member. In his evidence he said he had once been elected an organiser (eight years ago) in the Newcastle sub-Branch but was subsequently elected to the position of Sub-Branch Secretary of Newcastle. There is not, as far as I am aware, such a position comprehended by the rules. What the rules do provide (rule 48.2.7) is that one of the committee members be elected from the members of the NSW Branch attached to the Newcastle sub-Branch. I rather apprehend that McCarney was talking about this position when he spoke of being the sub-Branch Secretary. It appeared not to be in issue that McCarney was paid by the Union and worked for it. In what capacity is obscure, though McCarney believed it was as Newcastle sub-Branch Secretary. It is true that in the minutes McCarney was generally listed as an officer and not as a committee member. However neither that fact nor the evidence of McCarney establishes, to my satisfaction, that McCarney participated in the deliberations of the committee other than as a committee member. Indeed his election to that office in 1999 would rather suggest that he was participating in that capacity. In any event, the opponents have not made good the contention upon which they relied, namely that McCarney was precluded by the proviso to rule 48.2.7 from voting on the committee. Accordingly this additional ground for suggesting that the committee made decisions knowing that McCarney could not participate by voting does not detract from the view earlier expressed that s 255 operates to validate the decision to appoint Brown as Branch Secretary. 37 I am also not satisfied that there is any basis for making an order under s 257 in relation to this appointment. Both West and Brown were elected to the positions of Branch Secretary and Branch Assistant Secretary respectively in the 1999 elections. While they were elected unopposed, they nonetheless held office as a result of the democratic election processes within the NSW Branch. The duties of the Branch Assistant Secretary were to assist and support the Branch Secretary. It is not out of the ordinary, in these circumstances, for an Assistant Secretary to be appointed to fill a casual vacancy created by the resignation of the Secretary. 38 The next appointments were those made at the meeting on 14 June 2000. That is, the re-appointment of Edwards as Branch President and the appointment of Czarnecki as Vice-President. The evidence establishes that by 30 May 2000, the members of the committee were aware that the appointments in June 1999 may not have been validly made. However I do not consider that the officers of the Union, and Brown in particular, can be criticised for seeking advice, as a first step, in ascertaining what should be done. Brown did so by writing to the National Secretary on 5 June 2000. The evidence does not establish that either directly or by inference that Brown, his supporters and possibly also the National Secretary were by then well aware of the problem associated with the 1999 appointments and had been aware of it for some time. All that can be said of what Brown did and when he did it, was that it was a reasonable action taken at a time that happened to coincide with a point in time when the casual vacancies could be filled by appointment. The advice given by the National Secretary about the 1999 appointments was unexceptionable and there was no particular or pressing reason for him to get legal advice about the matter. While he may have elected to get legal advice no adverse inference should be drawn, as the opponents suggested, from his failure to do so. 39 The opponents also relied on the way in which the position of Vice-President was filled at the meeting on 14 June 2000. It is to be recalled that Pope had been appointed Vice-President in 1999 (having been elected, at that time, to the position of Branch committee member), and was nominated for the position in June 2000 but was defeated by Czarnecki. It is fairly clear from the evidence that Pope was defeated because he was a supporter of Whelan and that Brown and his supporters had the numbers on the committee. However Pope's earlier appointment as Vice-President was invalid and he did not, in my opinion, have any presumptive right to remain in that office. The filling of the position by the committee in accordance with the rules necessarily exposed Pope to the risk that he would not be appointed to the position by the vote of the committee. It appears thereafter Pope was treated as a member of the committee consistent with the result of the 1999 election. On one view, the will of the electorate manifest in the 1999 elections, in relation to the election of Pope, was frustrated by the manoeuvrings at the 14 June 2000 meeting. However this does not appear to be an issue raised directly in the proceedings. That is, while the position of Pope was called in aid in argument (and counsel for Whelan argued that Pope impliedly resigned from the position of committee member when he took up the position of Vice-President in June 1999), his position on the committee is not under challenge in these proceedings. Orders are not sought which would have the effect of removing him from, or denying him the right to occupy, that office. In my opinion, the appointment of Edwards and Czarnecki were validated by s 255 notwithstanding the participation in the meeting of persons invalidly appointed in June 1999. 40 Again I do not think a ground has been made out for an order under s 257 in relation to these appointments. Edwards was elected to the position of Branch Vice-President in the 1999 elections. His position is not dissimilar to that of Brown discussed earlier. That is, he was appointed to a position (Branch President) which bore a relationship to the position to which he was earlier elected (Branch Vice-President) in the 1999 elections. The position of Czarnecki is a little different in the sense that in the 1999 elections, he was elected to the position of Branch committee member and there is no obvious or direct connection between that position and the position of Branch Vice-President. However one of the complaints of the opponents was, in substance, that Pope should have been reappointed Branch Vice-President and the committee members allied to the political position of Brown should not have used their numbers to appoint Czarnecki. However it is to be recalled that Pope had also only been elected a Branch committee member. 41 The last appointment in issue, was the appointment of Stone as Assistant Branch Secretary at a meeting of the committee on 26 September 2000. In the contentions filed on behalf of Whelan in the compliance proceedings, it was contended that the decision to appoint Stone was invalid because, inter alia, the decision was not a decision of a meeting of the committee because three people (Palmer, Edwards and Pope) participated in and voted on the decision but were not members of the committee. In the written submissions filed on behalf of Brown, it was conceded that, in the absence of the operation of s 255, the decision to appoint Stone was invalid for the reason summarised in the preceding sentence. What this contention and concession may not accommodate, is the operation of s 255 on the decision of 14 June 2000 to appoint Edwards. However I may misunderstand the submission made on behalf of Whelan and the scope of the concession made on behalf of Brown. 42 But the question of whether s 255 operates to validate the decision to appoint Stone is a substantially theoretical question (having regard to the way the case was conducted) if the challenge to the decision to appoint him in the compliance proceedings is unsuccessful. Accordingly it is appropriate to consider that challenge first. The challenge was based on three grounds. One was based on the contention that McCarney could not vote. I have already explained I do not accept this contention. 43 The second was that Palmer, Edwards and Pope participated and voted at that meeting. A variant of this ground was advanced in the written submissions of Whelan's counsel, namely that the motion to appoint Stone was moved by Brown and seconded by Czarnecki. However subject to an argument about whether the power to appoint Edwards, Brown and Czarnecki was enlivened at all, the appointment of each of these to the offices they held was, for reasons just explained, valid by operation of s 255. Palmer was never validly appointed or elected to the committee and his involvement can only be rendered valid by an order under s 258. While Pope was elected to the committee in the 1999 elections, it has been argued by counsel for Whelan that Pope impliedly resigned from this position when he took up the office (albeit unlawfully) of Branch Vice-President. No order has been sought under s 258 seeking to validate his assumption of the position of member of the committee after his defeat in the contest for the position of Branch Vice President at the meeting on 14 June 2000. 44 The contention that the power to appoint Edwards, Brown and Czarnecki was never enlivened was based on an argument that sufficient time had not elapsed to enable the committee to exercise the power to fill the casual vacancies by appointment rather than election. It is also a contention raised more directly in relation to the power to appoint Stone to the position of Assistant Branch Secretary. It is convenient to deal with this issue by reference to the appointment of Stone and in doing so, illustrate the legal position more generally. 45 Rule 52.1.1 provides that a casual vacancy can be filled by appointment "for so much of the unexpired term as does not exceed three-quarters of the term of the office". Rule 52.1.3 defines "term" as the total period for which the person was entitled by virtue of the election to hold the office. Having regard to rule 49, it is tolerably clear that the Branch Assistant Secretary is elected for a term of four years. So much is apparent from the opening words of that rule. It may be accepted, as counsel for Whelan submitted, that the timing of the election may be such that an occupant of that office would, in fact, hold office for a longer period. However that could well dependent on whether the subsequent election was contested or not. If it was not contested then the successor would be likely to occupy the position sometime shortly after the last Monday in April as a result of the returning officer making a declaration under rule 49.5. 46 It may be accepted that the definition of "term" speaks of the total period a person was entitled by virtue of the election the hold office and rule 49.17 entitles a person to hold office until a successor is duly elected. However, it is unlikely that the unexpired period referred to in rule 51.1 was intended to be an indeterminate period dependent on whether, as matter of speculation, it was to be assumed there would be a contested election or, on the other hand, it was to be assumed there would be an uncontested election. The better view, in my opinion, is that for the purposes of rule 52.1.1, the relevant period is four years and the definition of "term" was intended, when it spoke of "total period", to pick up the four year term and nothing more. It was not intended that any holding over in the office during the elections after the expiry of the four years was part of the term of the office for the purposes of rule 52.1.1: see Marko v Fegan [2000] FCA 1016. Accordingly, on 14 May 2000 (when West resigned from the office of Branch Secretary and Brown took up that office and resigned from the office of Branch Assistant Secretary) there remained an unexpired term of less than three-quarters of the term of the office (that is, less than three years) and the office could be filled by appointment. The same can be said of the offices of Branch President and Branch Vice-President when they were filled by appointment on 14 June 2000. 47 It is necessary now to consider the position of Palmer and Pope. Palmer was never elected or appointed to the committee. I accept that Pope impliedly resigned from the position of committee member when he took up the position of Vice-President in June 1999. At the committee meeting of 26 September 2000 the minutes record the vote was 5 for and 2 against when Stone was appointed. Whelan gave evidence that the vote was 5 for and 3 against (including him) though his evidence, on this question, was not entirely consistent. It is probable the minutes are correct. Pope voted against the appointment of Stone. It can be inferred that Palmer voted in support of the appointment of Stone. 48 However rule 27 of the rules of the Union provides that a decision or proceedings of any body shall not be invalidated by the participation of a person not entitled to be present. The rule is plainly intended to include voting by someone not entitled to vote. The rule contain several qualifications. First, there must be a quorum apart from the people not entitled to be present. In the present case there was a quorum apart from Pope and Palmer (rule 48.3 provides that the majority of the members of the committee shall form a quorum and there were 10 members present apart from Palmer and Pope). Secondly, there must be no objection to the presence or participation of the people. There is no evidence to suggest any objection was taken to the participation of Palmer and Pope. Thirdly and finally, the vote of the person must not have been determinative of the decision. The vote of Pope plainly was not, given that he formed part of the minority. Palmer's vote was also not determinative and if it was not counted, the vote in favour of appointing Stone would have been 4, giving him a majority of 2 (or on Whelan's version of the voting, a majority of one). Accordingly the participation of Palmer and Pope did not, by operation of rule 27, invalidate the appointment of Stone. 49 The last issue concerning the validity of the appointment of Stone is whether the decision of the mass meeting of 18 August 2000 (referred to at [11] above) prevented the committee exercising the power to appoint a person to the position of Branch Assistant Secretary. For present purposes I will assume that the meeting was a branch meeting (either a special or a general meeting) for the purposes of the rules. While it may be accepted that rule 48 provides that a branch committee of management is subject to the review and control of a branch meeting, the power to appoint a person to fill a casual vacancy is expressly conferred on the committee. It is a particular power. It is unlikely, in my opinion, that the rules, when speaking in general terms of "review and control" of the committee by a meeting, contemplated that the power to fill a casual vacancy could also be exercised by a general meeting. I favour the meaning of the word "control", for present purposes, adopted by Evatt and Northrop JJ in Boland v Munro (1980) 48 FLR 66 at 80. That is, it is unlikely that the rules contemplated that two bodies (the committee and a general meeting) would be the repository of the same power. In the unlikely event that the rules were to confer the same power to appoint on the two bodies, one would expect an express conferral of the particular power on the meeting as well. 50 In the result, the challenge to the appointment of Stone fails. The appropriate order in the compliance application is to dismiss the application. 51 In the event that I am wrong in rejecting the challenge to the appointment of Stone in the compliance proceedings, I should say something about the operation of s 255 on the decision to appoint him. It is to be recalled that the advice of the National Secretary in his letter dated 13 June 2000 was that the committee could, but did not have to, fill the position of Branch Assistant Secretary (it had effectively been vacated by the appointment of Brown, elected to the position of Branch Assistant Secretary in the 1999 elections, as Branch Secretary in May 2000). The committee elected not to do so at its meeting in June 2000. It is also to be recalled that a branch meeting held on 18 August 2000 had resolved that the position be filled at the next special branch meeting though there was an issue about the status of the meeting. I should mention two further matters. The first is that Stone appears to be in the same political grouping as Brown. The second is that Stone was, prior to this appointment on 26 September 2000, a Branch Organiser, having been elected to that position in the 1999 elections. 52 I should indicate, at this point, that I do not share the views of the National Secretary about whether the committee had, effectively, a discretion about filling the position of Branch Assistant Secretary. Rule 56 (set out at [20] above) provides that a branch may determine to establish the office of Branch Assistant Secretary. It can be inferred that before the 1999 elections a decision had been taken to establish that office. Were it otherwise there would have been no election for that position. There is no evidence to suggest that after the 1999 elections a further decision was taken about the position. The opinion of the National Secretary that there was a discretion about filling the position, was based on the words "(if any)" in rule 48.2.4 (set out at [13] above). However those words are plainly intended to reflect the possibilities made available by rule 56. That is, there will be no such position if the branch has not decided to establish it and there will be if it has. 53 However what is important in considering whether the decision to fill the position was made bona fide is that the advice of the National Secretary was that there was a discretion about filling it and there is nothing to suggest that any member of the committee believed otherwise. The reason given by Brown for the exercise of the discretion in favour of filling the position in September 2000 was there was an urgent need to fill it having regard to his workload. I found his explanation in cross examination less than credible. Moreover rule 56 confers on an elected Branch Organiser (which Stone was before 26 September 2000) precisely the same powers and duties (to generally assist in conducting the business of the Branch under the direction of the Secretary and carry out the duties of the Secretary during his/her temporary absence) as a Branch Assistant Secretary. That is, Stone could have done work for Brown without assuming the office of Branch Assistant Secretary. I do not accept Brown's evidence about the reason for appointing Stone. 54 I consider the real reason for making the appointment lay in the fact that there had emerged within the NSW Branch significant factional divisions which were manifest by the voting patterns on the committee and the apparently ongoing conflict between Whelan and his faction and Brown and his faction. These divisions were also manifest in the decision of the mass meeting of members in August 2000 concerning the position of Branch Assistant Secretary. The submissions made on behalf of Brown concerning that meeting, focused on the character of the meeting and whether, assuming it had a particular character, the meeting had power to appoint a Branch Assistant Secretary (when a casual vacancy arose that could be filled by appointment rather than election) in the face of an express power to do so conferred on the committee. These submissions are relevant to one issue raised by Whelan but do not address, for present purposes, the significance of what the meeting decided and the relevance of its decision to the later appointment of Stone. 55 In my opinion, the committee, in deciding to appoint Stone to the position of Branch Assistant Secretary was not acting bona fide. The appointment of Stone was not undertaken for the reason given by Brown. The appointment was made to forestall any decision by a general meeting concerning the filling of the position of Branch Assistant Secretary quite apart from whether any such meeting would have had power to fill it. The decision of the committee was, in this sense, a pre-emptive one. Section 255 would not operate, in my opinion, to validate the decision if it was otherwise invalid (a matter assumed to this point having regard to the concession by Brown and an assumption potentially dependent on whether orders are made under s 258). In those circumstances no issue arises about a declaration under s 257 which assumes that s 255 would operate unless a declaration was made. That is, the power to make a declaration is enlivened in circumstances when s 255 applies. 56 The preceding analysis leaves unresolved the question of whether orders should be made in the validation application. I have concluded that by operation of s 255 there are no invalidities in the management of the NSW Branch as a result of the invalid appointments in June 1999. Edwards has now validly been appointed to the office of Branch President. Pope no longer purports to be the Branch Vice-President and I do not see the utility in making any order under s 258 concerning his appointment to that position in June 1999. The remaining position to which the validation application relates is the appointment of Palmer to the position of Branch committee member in June 1999. As discussed earlier, the committee acted bona fide in making the appointments in June 1999 and having regard to the way they filled the positions of President and Vice-President, it was necessary to find another person to be a member of the committee who would not have an electoral mandate (at least in the sense of having nominated for the position in an election where there was no opposition). If an order validating the appointment of Palmer would impact on the appointment of Stone, I would entertain some doubt as to whether such an order should be made. However, for reasons just discussed, Palmer's participation in the decision and vote was not decisive. Accordingly I propose to make an order validating the appointment of Palmer as a Branch committee member. I am satisfied that such an order would not do substantial injustice in the way described in s 258(5). I certify that the preceding fifty six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. Associate: Dated: 17 Ocotber 2001 Counsel for the Applicant: Mr R Kenzie QC & Mr S Prince Solicitor for the Applicant: Turner Freeman Solicitors Counsel for the Opponents: Mr J Pearce Solicitor for the Opponents: Taylor & Scott Date of Hearing: 30-31 July 2001 Date of Judgment: 17 October 2001