FEDERAL COURT OF AUSTRALIA O'Byrne v Panegyres [2003] FCA 1328 WORKPLACE RELATIONS – organisations – democratic control – conduct of election – inquiry – exclusion of financial member from eligibility to contest certain offices – ruling by Returning Officer to that effect – rules specifying qualification of candidates for relevant offices imposing additional requirements to financial membership – additional requirements not met in the circumstances – no irregularity in ruling Workplace Relations Act 1996 (Cth) Sch 1B (ss 200, 201, 205, 206) LAURENCE SHANE O'BYRNE v EVANGELOS MICHAEL PANEGYRES, JAMES MURIE and COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA ('CEPU') W170 of 2003 RD NICHOLSON J 19 NOVEMBER 2003 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W170 OF 2003 BETWEEN: LAURENCE SHANE O'BYRNE APPLICANT AND: EVANGELOS MICHAEL PANEGYRES FIRST RESPONDENT JAMES MURIE SECOND RESPONDENT COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA ('CEPU') THIRD RESPONDENT JUDGE: RD NICHOLSON J DATE OF ORDER: 19 NOVEMBER 2003 WHERE MADE: PERTH THE COURT DETERMINES THAT: No irregularity has happened in relation to the election by the CEPU, WA Divisional Branch, Electrical Division to the offices of (i) Divisional Branch Assistant Secretary and (ii) Divisional State Council, the results of which were declared on 24 July 2003, so far as irregularities were alleged in the application by the applicant for an inquiry dated 1 August 2003. THE COURT CERTIFIES THAT: The applicant acted reasonably in applying for the inquiry into an election in the application dated 1 August 2003. 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 W170 OF 2003 BETWEEN: LAURENCE SHANE O'BYRNE APPLICANT AND: EVANGELOS MICHAEL PANEGYRES FIRST RESPONDENT JAMES MURIE SECOND RESPONDENT COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA ('CEPU') THIRD RESPONDENT JUDGE: RD NICHOLSON J DATE: 19 NOVEMBER 2003 PLACE: PERTH REASONS FOR JUDGMENT 1 These reasons arise as a consequence of an application by the applicant for an inquiry relating to an election. The application was brought under s 200 of Sch 1B of the Workplace Relations Act 1996 (Cth) ('the Act'). The inquiry is into alleged irregularities which the applicant claims to have occurred in relation to an election declared on 24 July 2003 in respect of the CEPU, WA Divisional Branch, Electrical Division in relation to the offices of (i) Divisional Branch Assistant Secretary and (ii) Divisional State Councillor. 2 The irregularity said to have occurred is alleged to have arisen as a result of decisions of the first respondent as Returning Officer to reject the applicant's nomination for the above two offices and his declaration of the election of other persons to those offices. 3 On 2 October 2003 the Court declared itself satisfied that there were reasonable grounds for the application. Accordingly, the Court fixed a time and place for conducting the inquiry and made appropriate directions: s 201 of Sch 1B of the Act. statutory environment 4 The word 'irregularity' used in s 200 of Sch 1B of the Act and related sections is defined in s 6 of Sch 1B of the Act. When relied upon here for the applicant it is used in the sense of relating to 'a breach of the rules of an organisation or branch of an organisation' in relation to the election. The organisation and branch is that previously referred to. 5 Section 206(1) of Sch 1B to the Act provides that the Court must inquire into and determine the question whether an irregularity has happened in relation to the election. By s 206(2) of the Schedule, the Court must determine whether an irregularity has happened on the balance of probabilities. 6 Section 205(3)(b) of the Schedule provides that the Court is not bound to act in a formal manner and is not bound by any rules of evidence and may inform itself on any matter in such manner as it considers just. No issues arose as to the application of this requirement in this inquiry. 7 Schedule 1B of the Act is titled 'Registration and Accountability of Organisations'. Section 5 of the Schedule sets out the objects of the Schedule in the following terms: '5. The principal objects of this Schedule are to: (a) ensure that employee and employer organisations registered under this Schedule are representative of an accountable to their members, and are able to operate effectively; and (b) encourage members to participate in the affairs of organisations to which they belong; and (c) encourage the efficient management of organisations and high standards of accountability of organisations to their members; and (d) provide for the democratic functioning and control of organisations.' For the applicant it is submitted that the first respondent gave an interpretation of the rules of the Branch which did not advance object (b). evidence 8 The case for the applicant relies on his affidavits sworn on 5 August 2003 and 24 September 2003. 9 The first respondent appears to assist the Court and does not seek to support the correctness of decisions he made during the course of the elections nor advocate any particular outcome of the inquiry. Two affidavits of his are in evidence, one sworn on 13 August 2003 and the other sworn on 9 September 2003. 10 The second respondent is the person declared elected to the office of Divisional Branch Assistant Secretary. His case is supported by an affidavit sworn on 17 October 2003 as admitted into evidence following resolution of various objections. 11 The third respondent, the relevant organisation, relies on an affidavit of the second respondent sworn on behalf of the third respondent on 14 October 2003. The decision of the returning officer 12 Nominations for the two offices closed on 14 July 2003. The applicant's nominations were received on 11 July 2003. 13 On 15 July 2003 the first respondent wrote to the applicant advising that he was conducting the election on behalf of the Division under s 189 of Sch 1B of the Act. In relation to the applicant's nominations for the offices in question, he advised that a check of the Union records showed that the nominations appeared to be defective in that they had not met the requirements of the Rules of the CEPU Electrical Division, namely, r 15.20.2 and r 15.20.4. He said that the applicant's payment history showed that for the quarter from 1 January 2003 to 31 March 2003 he had paid for his subscription on 30 January 2003, payment having been due in advance on 31 December 2002. He said that before rejecting the nomination he was required to give the person the opportunity, if possible, of remedying the defect. (In fact the payment made by the applicant on 30 January 2003 was in respect of the six monthly period commencing from 1 January 2003.) 14 On 24 July 2003 the first respondent again wrote to the applicant referring to correspondence from the applicant's then solicitors in response to the first respondent's letter of 15 July 2003. He stated that he had interpreted r 15.20.2 and r 15.20.4 'as requiring that a candidate [has] been continuously financial for the required period, being 2 years in the case of r 15.20.2 and 1 year in the case of r 15.20.4. The requirement for continuous financiality appears to be confirmed by the provisions of r 15.20.5.' 15 The first respondent then referred to the payment history of the applicant as set out in the first respondent's letter of 15 July 2003 and to the fact that his first contribution in respect of 2003 had been made on 30 January 2003 was undisputed. He then referred to the application of r 5.2.4 requiring contributions to be paid in advance and r 5.2.8 providing for an option of 6 monthly payments. He considered there was nothing in r 5.2.8 which modified or cancelled the requirement of advance payment in r 5.2.4. He contrasted this with other rules which did modify or cancel the operation of r 5.2.4, namely, r 5.3.1 and other provisions of r 5 but it had not been submitted any of those provisions applied to the applicant. The first respondent was, therefore, of the view that in order to comply with the requirements in both r 15.20.2 and r 15.20.4 that the applicant had 'been a financial member of this Division in accordance with r 5 …' he was required to comply with r 5.2.4. However, his payment on 30 January 2003 did not constitute such a compliance. 16 He then turned to an argument made on behalf of the applicant that r 6 modified the operation of r 15.20.2 and r 15.20.4. The first respondent then set out his reasons for not accepting submissions to that effect. 17 The consequence was that the first respondent was not satisfied that the applicant had otherwise established his eligibility to nominate for the two offices concerned so that the rejection of his nomination stood. It is that decision which the applicant says constituted the irregularity in the elections for the each of the offices because the ruling involved a breach of the rules of the Branch. The subsequent declaration of election of others to these offices is also said to constitute part of the irregularity. 18 It should be appreciated that the applicant has in the period relevant to this inquiry been a financial member who paid his subscription on a six monthly basis. The issue which was said by the first respondent to preclude him from candidacy at the elections was that he had not paid his six monthly subscription in advance of 1 January 2003 and so had not paid it when it fell due in accordance with r 5. To express this another way, this inquiry does not concern an unfinancial member disputing his exclusion from candidacy. rules of the electrical division 19 There are 38 Divisions to the rules of the Electrical Division. While it is on Div 5 and Div 6 that the arguments made to the inquiry focussed, it is necessary to review generally the context of the rules and the approach which they take to the issues of membership, financial membership, unfinancial membership and related issues. 20 Division 1 describes the name and address of the Division. Division 2 contains definitions. Division 3 provides for alteration of the rules. 21 Division 4 addresses the issue of membership. Rule 4.1 provides that the Division shall consist of such of the employees or persons referred to earlier in the rules (being various office holders) who duly become members of the Union in accordance with its rules. Membership is continuous (r 4.5.1) and a member may resign from membership if employed in an industry other than that represented by the Union or by giving three months notice (r 4.6.1). 22 Division 5 deals with entrance fees and contributions. Rule 5.2.1 provides that the contribution rate shall be determined from time to time by the Division or Council. Rule 5.2.4 provides: '5.2.4 All contributions shall be paid in advance.' The subscription rate is usually set on an annual basis in respect of the current calendar year so that all subscriptions paid shall be at the quarterly or six monthly rate: r 5.3.2. The six monthly rate is provided for as follows: '5.2.8 A Divisional Branch may determine, by the decision of its State Council, to charge subscriptions on a six monthly basis. The rate for subscription paid on a six monthly basis shall be determined by multiplying the quarterly rate by two. Six monthly subscription periods shall be from the 1st January to the 30th June and the 1st July to the 31st December in each year.' 23 There are two exceptions to the express requirement that all contributions shall be paid in advance. The first is in respect of certain annual subscriptions, namely: '5.3.1 A member who if financial for the preceding year, may during the months of January and February, pay the subscription for the current year at an annual rate determined by multiplying the quarterly rate herein prescribed by four and deducting 10% calculated to the nearest $1.00.' The second exception is where contributions are deducted from wages or from financial institution accounts. In that respect it is provided in the rules: '5.4.4 A member who is financial at commencement of having contributions deducted from wages in the manner prescribed in this sub-rule or who subsequently becomes financial and continues to make regular payment by deduction of the amounts determined as herein prescribed in this sub-rule, shall be regarded as having paid subscriptions in advance and shall not be regarded as unfinancial in accordance with rule 6 "Unfinancial Members" provided such members, at the date of verifying their financial status are no more than three months in arrears of contributions.' 24 Division 6 addresses the issue of Unfinancial Members. The time from which a member becomes unfinancial is provided for as follows: '6.1 A member shall be unfinancial if in arrears of fines, levies and contributions on the first day of March in the quarterly period ending 31st March and on the first day of the quarterly period ending June 30th, September 30th, December 31st and shall not be entitled to take any part in the Union's business or attend any meeting unless specially invited to do so by the Divisional Branch Executive. When invited by a Divisional Branch Executive such members will only be permitted to speak in relation to the business for which they have been summoned to attend and will retire from the meeting immediately such business has been concluded, or when requested to do so by the Chairperson.' The effect of becoming an unfinancial member is dealt with in the following rule: '6.2 Unfinancial members, whilst not relieved of the obligations of membership, shall not be entitled to any of the benefits and privileges of membership' From this it is apparent that even though unfinancial, a member continues as such although not entitled to benefits and privilege of membership. 25 Elections are dealt with in Div 15. They are required to be held quadrennially commencing in 1995: r 15.1. The term of office of various positions is four years. Election of Divisional Branch Assistant Secretaries is to take place in accordance with r 15.19: r 15.6. Delegates to Divisional State Council are to be elected by members of the particular section entitled to vote in accordance with r 15.14.3. In relation to the conduct of the elections it is provided: '15.14.3 The method of electing persons to an office, except where otherwise provided in these rules, be by secret postal ballot of all financial members entitled to vote in such elections. Whether or not a member is financial shall be determined by reference to rule 6.1 "Time from which a member becomes financial".' 26 The provisions with respect to eligibility in direct elections, so far as they are relevant here, are as follows: '15.19.18 For the direct elections by the members of the Division or Divisional Branch the following persons shall be eligible to stand for the positions indicated in the manner indicated in table 2 below: Electrical Division Elections Direct Voting by Secret Postal Ballot Positions Person eligible Electors … Divisional Councillors Financial members for one year All financial members of the Branch concerned … Divisional Branch President, Branch Secretary, Assistant Secretary and Organisers Financial members for two years All financial members of the Branch concerned' 27 The requirements of r 15.19.18 are refined further by provisions of r 15.20 which read: '15.20 Candidates 15.20.1 No Candidate shall hold office unless he or she is over 18 years of age. 15.20.2 Candidates for the positions of Divisional Secretary, Divisional Assistant Secretary, Divisional Branch President, Divisional Branch Secretary, Divisional Assistant Branch Secretary or Divisional Branch Organiser, must have been financial members of this Division in accordance with rule 5 "Entrance Fees & Contributions", for each quarterly period as it fell due within two years immediately preceding the date of nomination. 15.20.3 A candidate for election to the Divisional President, either Divisional Vice President & Other Branch Representatives on the Divisional Executive shall have been a financial member of the Union, in conformity with the rules, for two years immediately preceding the date of nomination and be, at the time of nomination, a delegate of Divisional Council. 15.20.4 Candidates for all other positions mush have been financial members of this Division in accordance with rule 5 "Entrance Fees and Contributions", for each quarterly period as it fell due within one year immediately preceding the date of nominations except where there are no more than the required number of nominees when each candidate shall be a financial member of the Division in accordance with rule 5 "Entrance and Contribution Fees". 15.20.5 (Not relevant here) …' 28 In respect to the voters, it is provided that to be eligible to vote 'members shall be financial at the closing time for nominations': r 15.22. reasoning 29 It is appropriate to combine the statement of the contentions made for the applicant with the reasoning on each of the contentions raised. interrelationship of rules 5 and 6 30 The core of the submissions for the applicant lies in the submission that it is not possible to apply r 5 (as r 15.20.2 and r 15.20.4 each require) without taking into account the effect of r 6. There are several reasons why it is said this is appropriate. The first is that when regard is had to the objects of Sch 1B of the Act, it is clear the rules of an organisation are to be interpreted beneficially. Secondly, r 5.4.4 specifically refers to r 6, so also does r 15.14.3. 31 Division 6 of the rules determines when a member becomes unfinancial and the consequences of that change in status. Certainly, r 5 is to be read in the context of r 6. However, I cannot see what significance that has for the application of r 15.20.2 or r 15.20.4. That is because in each of those sub-rules the requirement is not only that the candidate must be a financial member of the Division in accordance with r 5 but also that should be so 'for each quarterly period as it fell due within two years immediately preceding the date of nomination'. The words 'as it fell due' add something more than is provided for by reference to r 5. Those words are a requirement for qualification of a candidate. Even if r 6 applies to r 5 or r 5 should be understood in the context of r 6, that cannot overcome the effect of the words 'as it fell due' in each of the sub-rules determining the eligibility for candidacy in respect of each of the offices in issue here. description of persons eligible 32 Then the case for the applicant relies on the reference in r 15.19.18 to the use of the words 'financial members'. It is understood that this should take its meaning from a consideration of both Div 5 and Div 6 of the rules. That may be so, however, it is not determinative of the qualification of eligibility for candidacy. In addition to the requirements of r 15.19.18, there are the further specific requirements of r 15.20.2 and r 15.20.4. These require, not only financial membership, but financial membership in a particular way, namely, payment of contributions as they fall due for the requisite periods within the requisite timeframes. Rule 15.19.18 is part only of the description of eligibility and cannot be read independently of reference to r 15.20. objects of the act 33 The applicant's case next relies particularly on object (b) in s 5 of Sch 1B which states that the objects of the Schedule are to encourage members to participate in the affairs of organisations to which they belong. It is said that for the Returning Officer to find the applicant disentitled to contest nominations for the offices in issue is to fail to encourage members to participate in the affairs of the organisation to which they belong. However, the affairs of those organisations are governed by the rules of those organisations. The objects of the Schedule do not prevent the rules of the organisation or the branch from having effect in their terms. It is not contended that anything in the Schedule makes the rules invalid or ineffective. whether rule 6.1 otiose 34 The applicant's case then contends that unless r 6.1 has application to the case of the applicant it will be otiose in its operation. That is clearly not the case. Rule 6.1 will apply to determine when a member is unfinancial and, consequently whether they have been disentitled by r 6.2 to benefits and privileges of membership. That is a different issue to determining whether a candidate qualifies for nomination to contest a particular office. creation of classes of members 35 The applicant's case says that if the interpretation of the Returning Officer is allowed to stand, there would be different standards applied under the rules and, in particular, two classes of financial membership would be created. Those classes would be members who are financial members eligible to contest elections and those who are financial members but ineligible to contest elections. 36 Support for this contention is sought by reference to the terms of r 15.20.3 where the qualification to be a financial member of the Union is described as one which is 'in conformity with the rules'. 37 Reference is also made to r 15.22 by which members have to be financial in order to be eligible to vote. It is said that rule, like r 15.20.3, draws no distinction between categories between financial membership. 38 There are two answers to this submission. The first is that each of the sub-rules in r 15.20 falls to be applied in its terms. It is clear that in the drafting of r 15.20.2 and r 15.20.4 different wording and different tests have been adopted than in the drafting of r 15.20.3. This is only explicable as the consequence of a desire by those adopting the rules to distinguish between the qualification of candidates for the offices identified in each of those particular sub-rules. To read them literally in their terms and giving a different effect to the former two over the latter is to do nothing more than to give effect to the intention of those adopting the rules. 39 The second answer is that the application of r 15.20.2 and r 15.20.4 in the manner dealt with by the first respondent in his ruling does nothing more than to determine the eligibility of candidates in relation to offices in those particular sub-rules. It does not create a new category or a second category of financial membership. The fact that the position may be otherwise for voting says nothing more than that the rules differentiate between voting and candidacy for certain offices. ANOMALOUS inconsistency 40 The next submission for the applicant is that if the ruling of the first respondent is upheld there would be an anomalous result. It would mean that a person paying contributions by way of deductions from wages or financial institution accounts would, as a consequence of the application of r 5.4.4, not be precluded by r 5.2.4 from achieving eligibility under r 15.20.2 or r 15.20.4. However, that would not be the case where a candidate, such as the applicant, did not fall within the excepting provision of r 5.4.4. 41 It is important to appreciate that r 5.4.4 does two things. In the first part it creates an exception to the application of r 5.2.4. The second part adjusts the application of r 6. The second part is, in my view, of no materiality to the present argument because it is not relevant to a determination of the applications of r 15.20.2 and r 15.20.4. 42 The result is there is no anomalous inconsistency. The difference in treatment between the two categories of possible candidate derives entirely from an application of the rule in Div 5. Those who have written the rule have modified r 5.2.4 by the application of the first part of r 5.4.4. 43 A similar argument based on the exception to r 5.4.4 in r 5.3.1 is answered on the same basis. interpolation of word in sub-rules 44 It is submitted for the applicant that the ruling of the first respondent in relation to r 15.20.2 and r 15.20.4 involves the insertion of the word 'only' before the reference to 'rule 5' in each sub-rule. There is no foundation for that submission. It is the application of each of the sub-rules in its own terms and with particular reference to the words 'as it fell due' which has formed the foundation of the first respondent's ruling. scope of operation of division 6 45 Then it is submitted for the applicant that r 6.1 is the sole determinant of the financial status of a member. I take that to be a submission as to whether a member has become unfinancial. I have no difficulty accepting that submission. However, it does nothing to assist the applicant on the issue raised in this inquiry. The question here is not whether the applicant was a financial member or an unfinancial member at the time of his nomination. The question here is whether he qualified to be a candidate in accordance with the qualifications required in r 15.20.2 and r 15.20.4. Each of those required that not only should he be a financial member but that he should be so 'for each quarterly period as it fell due within two years immediately preceding the date of nomination'. As has already been said, that is something over and above the issue of whether he was a financial member. The fact that he would not be an unfinancial member within the terms of r 6.1 does not have the consequence of his satisfying all of the elements in the qualifications set out in r 15.20.2 and r 15.20.4. This is because the requirement of being financial 'as it fell due' adds a requirement with which the circumstances of the applicant cannot comply. That is why, even if r 5 is read with r 6 in mind, the applicant cannot succeed. This position is reached on the plain wording of the sub-rule and without the necessity to resort to the gloss on those words of the concept of 'continuity'. effect of six monthly payment option 46 The case of the applicant falls within the circumstances recognised in r 5.2.8 providing for six monthly subscription periods. In its terms, however, that sub-rule is not an exception to the provisions of r 5.2.4. Rule 5.2.8 provides for the possibility of six monthly subscriptions periods but does not address or vary the rule imposed by r 5.2.4 as to when the contributions for those subscription periods will be paid. It does not therefore assist the applicant in any way that he had availed himself of the six monthly subscription basis. conclusion 47 It follows that the applicant's case has not established the existence of any breach of the rules of the third respondent. The Court will therefore determine that no irregularity has occurred in relation to the election for the two offices concerned. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson. Associate: Dated: 19 November 2003 The Applicant represented himself at the 2 October 2003 hearing Counsel for the Applicant: Mr BL Nugawela (from 3 November 2003) Solicitor for the Applicant: Maughan & Leach Counsel for the First Respondent: MR MT Ritter Solicitor for the First Respondent: Australian Government Solicitor Second Respondent represented himself Counsel for the Third Respondent: Ms C Crawford Solicitor for the Third Respondent: Derek Schapper Date of Hearing: 2 October 2003, 3 November 2003 Date of Judgment: 19 November 2003