DECISION NO: 148/96 INDUSTRIAL LAW - Registered organisation - Application for enforcement of rules - Appointment by Federal Council to fill a casual vacancy in the office of Federal President - Whether appointment was valid - Rule requiring casual vacancy to be filled by an election "where the unexpired part of the term exceeds 12 months or three quarters of the term of the office, whichever is the greater" - Rule permitting appointment in other cases - Term of office at least 2 years 11 months - Unexpired part of the term between 13 and 16 months - Whether this exceeds three quarters of the term - Construction of the words "three quarters of the term". Mellor v Horn (1988) 25 IR 157 Johnson v Beitseen (1990) 41 IR 396 Industrial Relations Act 1988, ss.200(2) and 209. GARRY JOHN McGRAW v NARELLE GILL - First Respondent, PAM ALLOM and ORS - Second Respondents, INDUSTRIAL REGISTRAR - Third Respondent, NEW SOUTH WALES DEPUTY INDUSTRIAL REGISTRAR -Fourth Respondent No. NI.96/1318 CORAM: WILCOX CJ PLACE: SYDNEY DATE: 24 APRIL 1996 IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI.96/1318 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: GARRY JOHN McGRAW Applicant AND: NARELLE GILL First Respondent PAM ALLOM, CAROLINE ANDRIVON, TERRY BAKER, JOHANNA BREM, GREG BROOME, COLIN COAKLEY, BEV CROSS, GARY DAVERN, DI DAVIS, PETER DENK, FILIPPA ESKE, JOY FULTON, HELEN GLEN, LANCE HARRIS, CHRISTINE HAY, MICHELLE HIGGS, DON HUTCHINSON, JOHN JAWORSKY, LYN KEALY, YVONNE LI, DAMIAN McMANUS, SHIRLEY MILLER, STEVEN REED, EDDIE RONSISVALLE, MICHAEL VON RETH, MARK SLATER, MARNIE SLUICE, ANNETTE STAFFORD, DIEDRE TURTLE, SALLY VALLIS, JOHN WALKER, LANCE WEBB and JENNY WHITEHEAD Second Respondents INDUSTRIAL REGISTRAR Third Respondent and NEW SOUTH WALES DEPUTY INDUSTRIAL REGISTRAR Fourth Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 24 APRIL 1996 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The order nisi granted on 2 April 1996 be discharged. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI.96/1318 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: GARRY JOHN McGRAW Applicant AND: NARELLE GILL First Respondent PAM ALLOM, CAROLINE ANDRIVON, TERRY BAKER, JOHANNA BREM, GREG BROOME, COLIN COAKLEY, BEV CROSS, GARY DAVERN, DI DAVIS, PETER DENK, FILIPPA ESKE, JOY FULTON, HELEN GLEN, LANCE HARRIS, CHRISTINE HAY, MICHELLE HIGGS, DON HUTCHINSON, JOHN JAWORSKY, LYN KEALY, YVONNE LI, DAMIAN McMANUS, SHIRLEY MILLER, STEVEN REED, EDDIE RONSISVALLE, MICHAEL VON RETH, MARK SLATER, MARNIE SLUICE, ANNETTE STAFFORD, DIEDRE TURTLE, SALLY VALLIS, JOHN WALKER, LANCE WEBB and JENNY WHITEHEAD Second Respondents INDUSTRIAL REGISTRAR Third Respondent and NEW SOUTH WALES DEPUTY INDUSTRIAL REGISTRAR Fourth Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 24 APRIL 1996 REASONS FOR JUDGMENT WILCOX CJ: This is an application to make absolute an order nisi granted by me on 2 April, 1996. The case concerns the Flight Attendants Association of Australia ("FAAA"), an employee organisation registered under the Industrial Relations Act 1988. Section 209 of that Act entitles a member of a registered organisation to apply to the Court for an order giving directions for the performance or observance of any of the rules of the organisation by any person who is under an obligation to perform or observe them. The applicant, Garry John McGraw, is a member of FAAA and of its Federal Council. The first respondent, Narelle Gill, is also a member of the organisation and its Federal Council. Following a postal ballot of members of Federal Council, on 22 March 1996 she was declared appointed to fill a casual vacancy in the office of Federal President of the organisation. The second respondents are the remaining members of Federal Council. Some of them join with Ms Gill in resisting the applicant's claim for relief. Some adopt a neutral stance. The third respondent is the Industrial Registrar and the fourth respondent the Deputy Industrial Registrar in the New South Wales registry. They were apparently made parties because the latter officer accepted the validity of the appointment of Ms Gill. But they did not take any part in the argument before me. The issue before the Court is whether or not this is a case in which Federal Council had power to make an appointment of Federal President. The rules of the organisation require triennial elections of federal officers. Rule 39(2) provides: "The election of Federal Officers shall be conducted in 1994 and in each 3rd year thereafter being completed by 30th June. Nominations shall open on the 15th of February in the year of elections and remain open for 28 days." In 1994, elections were held pursuant to this rule. Ian David Renn was elected as Federal President. On 26 February 1996, Mr Renn resigned from that position. On 12 March 1996, the Victorian Branch Secretary of FAAA submitted to its joint Federal Secretaries a resolution "that Narelle Gill be appointed to a casual vacancy in the office of Federal President". The resolution was said to be supported by rule 46(2)(a) of the Association's rules. Rule 46 relevantly provides: "(1) A casual vacancy occurring in a position of Officer of the Association shall be filled by an election where the unexpired part of the term exceeds 12 months or three quarters of the term of the Office, whichever is the greater. The election shall be conducted in accordance with Rules relevant to the election to fill the Office so far as is practicable and only a member eligible to nominate for and hold the Office may be elected. (2) Where the unexpired part of the term does not exceed the greater of the periods in Sub-Rule (1) then a financial member of the Association otherwise eligible to nominate for and hold the Office in question may be appointed to fill it provided that: (a) in the case of a casual vacancy in the Office of Federal President or Federal Vice President then the member shall be appointed by Federal Council; (b) ... (c) ... (d) ..." This resolution was submitted to a postal ballot of Federal Councillors and carried. The New South Wales Deputy Industrial Registrar originally intended to conduct a ballot of members to fill the vacancy but she accepted a submission that the Federal Council had power to make an appointment to fill the vacancy and a ballot was unnecessary. Mr McGraw is dissatisfied with that ruling and brings this proceeding to test its correctness. He was represented before me by Mr Lance Wright QC. Mr Stephen Rothman SC appeared for Ms Gill and some of the other Federal Councillors to support the validity of the Federal Council's action. Mr Wright contends that rule 46(2)(a) had no application to the vacancy caused by Mr Renn's resignation. He says that the unexpired part of Mr Renn's term exceeded the greater of the periods referred to in sub-rule (1); that is, 12 months or three quarters of the term of office. Counsel draws attention to rule 43(b) of the rules which states that, subject to the rules, "a member elected as a Federal Officer shall hold office from the declaration of the poll at which that member is elected until the declaration of the poll at which that member's successor is elected". Mr Renn was declared elected on 20 April 1994. But for his resignation, he would have held office until the election of his successor in 1997. If there was then only one nomination for the position of Federal President, the date of election might have been as early as 16 March 1997 (28 days after the opening of a 28 day nomination period). If an election had been necessary, it would have been later, possibly as late as June 1997. When Mr Renn resigned, therefore, his unexpired term was about 13 to 16 months. That is enough, says counsel, to bring the case within rule 46(1). The critical question under that sub-rule, according to counsel, is whether or not the unexpired portion of the term exceeds twelve months. If it does, the sub-rule applies and rule 46(2) is inapplicable. The obvious difficulty with this argument is that rule 46(1) refers to an unexpired part of the term that "exceeds 12 months or three quarters of the term of the office, whichever is the greater". The term of the office was at least two years and eleven months. Three quarters of that term is at least 26 months. Accordingly, so it would seem, rule 46(1) would require an election to fill the casual vacancy created by Mr Renn's resignation only if his term still had 26 months to run, at the time of his resignation. And, if rule 46(1) does not require a ballot, rule 46(2) permits the casual vacancy to be filled by Federal Council. Mr Wright attempts to overcome this difficulty by reference to two decisions of Gray J. One decision concerned s.200 of the Act, the other its legislative predecessor, s.133AB of the Conciliation and Arbitration Act 1904 which was in similar terms. Section 200 relevantly provides: "200(1) The rules of an organisation may provide for the filling of a casual vacancy in an office by an ordinary election or, subject to this section, in any other manner provided in the rules. (2) Rules made under subsection (1) shall not permit a casual vacancy, or a further casual vacancy, occurring within the term of an office to be filled, otherwise than by an ordinary election, for so much of the unexpired part of the term as exceeds: (a) 12 months; or (b) three-quarters of the term of the office; whichever is the greater. (3) ... (4) ... (5) In this section: 'ordinary election' means an election held under rules that comply with section 197; 'relevant provisions', in relation to an organisation, means: (a) the provisions of this Act (other than this section); and (b) the rules of the organisation (other than rules made under subsection (1)) providing for the filling of a casual vacancy in an office otherwise than by an ordinary election; "term", in relation to an 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 ..." It will be noted that subs. (2) refers to "so much of the unexpired part of the term as exceeds 12 months; or three-quarters of the term of the office; whichever is the greater". It is evident that rule 46 of the FAAA rules is modelled on s.200(2), or perhaps s.133AB(3) of the earlier Act. Any judicial interpretation of those provisions is relevant to the proper construction of rule 46. Mr Wright claims that, in each case, Gray J decided that the effect of the subsection was to require a normal election where the unexpired period of office was more than 12 months. The first case is Mellor v Horn (1988) 25 IR 157. It turned on the interpretation of a rule that permitted a Branch Committee of Management to appoint a member to fill a vacancy on the Committee where "less than twelve months of the ordinary term of such office remains unexpired" and to fill casual vacancies by elections in other cases. There was also a discretionary argument, it being said the likely cost was sufficient reason for the Court to refrain from making an order for elections. In rejecting that argument, Gray J commented at 165: "The clear policy of Parliament, as expressed in s.133AB of the Act is that casual vacancies be filled by election, when they occur more than twelve months before the end of the ordinary term of office of the position vacated. Parliament must have intended that organisations should be required to cope with the expense of such elections." The second case was Johnson v Beitseen (1990) 41 IR 396. One of the issues was whether a casual vacancy could be filled in anticipation of its occurrence. Gray J at 411 referred to s.200 of the Industrial Relations Act and said: "That section prohibits the rules of a registered organisation from permitting the filling of a casual vacancy by appointment where the balance of the term of office is more than 12 months." In neither of these cases was s.133AB or s.200 critical to the decision. The references to the section were made in passing and in relation to submissions that did not depend upon its terms. In neither case did Gray J explain why he referred only to an unexpired term of 12 months, rather than to the fuller description contained in the relevant subsection. In those circumstances, contrary to the submission of counsel for the applicant, I cannot read Gray J's words in either case as a decision that the maximum period referred to by s.200(2) (or s.133AB(3) of the 1904 Act) is 12 months. If his Honour did intend to express that view, I must respectfully disagree. Such a view would be inconsistent with the clear words of the subsection. Twelve months and three quarters of the term are clearly alternative yardsticks. Mr Wright puts another argument, based on the Macquarie Dictionary definition of the word "exceed": "1. to go beyond the bounds or limits of; 2. to go beyond in quantity, degree, rate etc;" He says the unexpired part of the term of office that "exceeds ... three quarters" of it is the part that is beyond the limits of the first three quarters, that is the last quarter. On this basis, rule 46(1) applies whenever the unexpired part is greater than 12 months or one quarter of the term, whichever is the greater. He suggests this is a sensible result since terms of office are commonly for three to four years. Section 199(1)(a) enacts a general maximum of four years. I agree with counsel about the result of that interpretation. It is difficult to see why Parliament fixed a proportion of the term as high as three quarters. This could lead to extended occupancies of office by non-elected officials. However, as a matter of English, it is impossible to construe the rule in the suggested manner. Both under s.200(2) and rule 46(1), the reference to three-quarters is a reference to a calculation ("three-quarters of the term of the office") to be used as a yardstick. The words do not refer to the first three-quarters of the term. If the word "exceeds" was read as referring to what comes after the expiration of the first 12 months of the term or three quarters of it, the sub-rule would require an election where a casual vacancy occurred towards the end of the term but not where it occurred in its early stages. This would be a nonsensical position. In my opinion the words of the sub-rule are clear. When a vacancy occurs, the question is whether the unexpired portion of the term exceeds twelve months, or three quarters of the original term. If it exceeds both of those limits, rule 46(1) applies. There must be an election. If it does not, rule 46(2) applies. Federal Council has the right to appoint a financial member of the Association to fill the vacancy. In the present case, when Mr Renn resigned, the unexpired portion of his term did not exceed three quarters of the term. Consequently, rule 46(1) did not apply. Rule 46(2) applied and empowered Federal Council to appoint Ms Gill to fill the vacancy. There was no failure to perform or observe the Association's rules. The order nisi must be discharged. I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment of the Honourable Chief Justice Wilcox. Associate: Dated: 24 April 1996 APPEARANCES Counsel for the Applicant: L Wright QC Solicitors for the Applicant: Paul Murphy Counsel for the First Respondent and some Second Respondents: S Rothman SC Solicitors for the First Respondent and some Second Respondents: Ryan Carlisle Thomas Solicitors for other Second Respondents: P Hayward Date of hearing: 11 April 1996