Industrial Relations Commission of New South Wales CITATION : Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151 PARTIES : APPLICANT: Seamens' Union of Australia, New South Wales Branch FILE NUMBER: IRC2633 of 2001 CORAM: Walton J Vice-President CATCHWORDS : Registered organisation - Application for determination of invalidity - Alleged invalidity related to a failure to hold elections in State registered organisation - No elections held in accordance with transitional rules - Elections had been held in the federal counterpart organisation - Finding of invalidity is jurisdictional prerequisite - Principles governing determination of question of invalidity - Invalidity found in the management or administration of and an appointment in the organisation - Possible invalidity in an election in the organisation - Orders proposed to cure invalidity - Factors warranting exercise of discretion to make orders - Court satisfied that orders proposed would not do substantial injustice to the members of the union or any creditor of the union or any person having dealings with the union - Form of proposed orders varied - Declarartion made - Orders made Industrial Relations Act 1996 ss249 288 Industrial Relations (General) Regulations 1996 cl29 LEGISLATION CITED : Industrial Relations Act 1991 s445 Workplace Relations Act 1996 (Cth) Conciliation and Arbitration (Organisations) Act 1974 (Cth) s171C Australian Building Construction Employees' and Builders' Labourers' Federation, Re (1978) 46 FLR 308 Food Preservers' Union of Australia and Anor (1998) 79 ALR 138 CASES CITED : Gordon v Carroll and Ors, Re (1975) 27 FLR 129 Hardacre v Health and Research Employees' Association of New South Wales (1999) 90 IR 97 Jess v Scott (1986) 14 IR 341 HEARING DATES: 05/16/2001 DATE OF JUDGMENT: 07/18/2001 APPLICANT: LEGAL REPRESENTATIVES: Mr W G McNally W G McNally & Co Solicitors JUDGMENT: - 26 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Walton J, Vice-President DATE: 18 July 2001 Matter No IRC 2633 of 2001 THE SEAMENS' UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH. Application by the Seamens' Union of Australia, New South Wales Branch for a determination of the question of an invalidity under section 288 of the Industrial Relations Act 1996. JUDGMENT [2001] NSWIRComm 151 1 This matter concerns an application by The Seamens' Union of Australia, New South Wales Branch ("the union"), a State organisation registered under ch5 of the Industrial Relations Act 1996 ("the Act"), for the determination of a question as to whether an invalidity occurred in the management of and an election in the union pursuant to s288(1) of the Act. 2 That question arises from a failure by the union to conduct an election in relation to the various offices established by the rules of the union ("the rules") in 1995 as required by r21 of those rules. 3 Rule 21 of the rules provides that: RULE 21 – TRANSITIONAL RULE 21.1 The first election pursuant to these rules shall be held in 1995. 21.2 Until the declaration of the election held in 1995 and notwithstanding the provisions of Rule 7, the persons who will hold office shall be: (a) State Secretary: Robert Darcey Coombs (b) Branch Secretaries: Robert Darcy Coombs, Sydney Secretary Terrence Edward Tindale, Port Kembla Secretary Laurence Steen, Newcastle Secretary. (c) Presiding Officer : John Frederick Garrett. (d) Committee of Management : John Frederick Garrett Robert Darcy Coombs Terence Edward Tindale Laurence Steen 21.3 Until 28th December 1993 there shall be a committee known as the Firemen & Deckhands' Consultative Committee who shall consult with members who were members of the Firemen and Deckhand's Union of New South Wales prior to its amalgamation and advise the Committee of Management in relation to those members. 21.4 The Consultative Committee shall be constituted by the following persons: Secretary John Frederick Garrett President Gregory John Hall Vice-President Kenneth Joseph Harvey Vice-President Brian Clark Committeeman Peter Mathew Origlass Committeeman Robert Arthur Garrett Committeeman Brian Joseph Duckworth Committeeman Rodney James Paterson Committeeman Douglas John Kingston 21.5 This rule shall cease to operate upon the declaration of the elections in 1995. The Legislation 4 Section 288 of the Act is in the following terms: 288 COMMISSION MAY MAKE ORDERS IN RELATION TO CONSEQUENCES OF INVALIDITY (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 Commission for the determination of the question whether an invalidity has occurred in: (a) the management or administration of the organisation, or (b) an election or appointment in the organisation, or (c) the making or alteration of the rules of the organisation. (2) On an application under subsection (1), the Commission may make such determination as it considers appropriate. (3) If, in a proceeding under subsection (1), the Commission determines that an invalidity of a kind referred to in that subsection has occurred, the Commission may make such order as it considers appropriate: (a) to rectify the invalidity or cause it to be rectified, or (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 Commission may give such ancillary or consequential directions as it considers appropriate. (5) The Commission must not make an order under subsection (3) without satisfying itself that such an order would not do substantial injustice to: (a) the organisation, or (b) any member or creditor of the organisation, or (c) any person having dealings with the organisation. (6) The Commission may determine: (a) what notice, summons or rule to show cause is to be given to other persons of the intention to make an application or an order under this section, and (b) whether and how the notice, summons or rule should be given or served and whether it should be advertised in any newspaper. (7) This section applies: (a) to an invalidity whenever occurring (including an invalidity occurring before the commencement of this section), and to an invalidity occurring in relation to an association before it became an organisation. The Application 5 The union sought, in its amended application, that the Court make a determination pursuant to s288(1) of the Act in the following terms: The Commission determines that an invalidity has occurred in the management and election of the applicant in 1995 in that pursuant to rule 21.1 an election of officers was required to be held and the organisation failed to apply in writing to the Industrial Registrar requesting that the Industrial Registrar arrange for the conduct of the election in accordance with regulation 29 of the Industrial Relations (General) Regulations 1996 (NSW) and as a result an election was not held as required by the rules. 6 Further, the union sought that, in the event that the Court determined that an invalidity so existed, orders be made pursuant to s288(3) and (4) of the Act as follows: 1. All acts by John Frederick Garrett, Robert Darcy Coombs, Laurence Steen, Terrence Edward Tindale, Mark Armstrong and Jim B Boyle in performance of their purported duties and functions as officials of the applicant be validated. 2. All actions taken or applications made to this Commission by the applicant be deemed to have been taken with the authority of the committee of management of the applicant. 3. An election to fill all officers of the applicant be conducted in 2001 pursuant to regulation 29 of the Industrial Relations (General) Regulations 1996. 4. Pending the completion of the election referred to in order [3] John Frederick Garrett, Robert Darcy Coombs, Jim B Boyle and Mark Armstrong constitute the Committee of Management of the applicant. Reference to the Court 7 The genesis of this application was a reference made by a Mr A G Musgrave, Deputy Industrial Registrar to the Court, pursuant to cl29 of the Industrial Relations (General) Regulations 1996 on 26 February 2001 in the following terms: I hereby refer to the Industrial Relations Commission in Court Session, pursuant to section 249(1) of the Industrial Relations Act 1996, clause 29 of the Industrial Relations Regulation 1996 and section 445 of the Industrial Relations Act 1991, for decision by the Industrial Relations Commission in Court Session, the following: 1. The failure by the Seamen's Union of Australia, New South Wales Branch (a State industrial organisation of employees registered or taken to be registered under Chapter 5 of the Industrial Relations Act 1996) to comply with the rules concerning elections and terms of office. Upon the following grounds and reasons: 1. The Seamen's Union of Australia, New South Wales Branch is an industrial organisation of employees registered under Chapter 5 of the Industrial Relations Act 1996 and is taken to be an industrial organisation of employees registered under Chapter 5 of the Industrial Relations Act 1996 by virtue of section 223(1) of that Act. 2. The rules of the Seamen's Union of Australia, New South Wales Branch were last certified by the Industrial Registrar on 7 August 1996 pursuant to s439 of the Industrial Relations Act 1991. 3. Rule 21 of the rules of the Union provide for transitional arrangements upon commencement of the rules under the Industrial Relations Act 1991. Rule 21.1 provides that "(t)he first election pursuant to these rules shall be held in 1995". 4. The Union did not, in 1995 or subsequently, apply in writing to the Industrial Registrar requesting that the Industrial Registrar arrange for the conduct of an election for an office in the organisation in accordance with the rules of the Union under s444 of the Industrial Relations Act 1991. 5. Although Rule 12 of the rules of the Union provides for election for officers in the State branch of the Federal organisation to be elected for the purposes of the State organisation, the Union has not availed itself of that provision 8 Upon the matter, so referred, being listed before the Court, the union brought the application which is the subject of this judgment. 9 Clause 29 of the Industrial Relations (General) Regulation 1996 is in the following terms: 29 Transitional provisions relating to elections (1) This clause applies until the regulations under the Act otherwise provide. (2) The provisions of sections 442 - 451 of the 1991 Act (and the regulations under those provisions) apply to a State organisation as regulations made under section 249 of the Act. Note. Section 282 (3) of the Act makes transitional provision for the application of the provisions of the 1991 Act and regulations relating to accounts and audit of organisations until new regulations are made. Section 283 (3) of the Act makes transitional provision for the application of the provisions of the 1991 Act and regulations relating to amalgamation of organisations until new regulations are made. 10 Section 445 of the Industrial Relations Act 1991 was in the following terms: 445. Failure to hold elections every 4 years (1) The Industrial Registrar must inform the Industrial Court if an organisation fails to comply with the rules concerning elections and terms of office. (2) The Industrial Court may suspend the registration of an organisation if the organisation fails to comply with the requirements of this Act in relation to the holding of elections at least once every 4 years after the organisation is registered under this Act. 11 In my view, once the failure to hold an election in the union was brought to the attention of the Deputy Industrial Registrar it was appropriate for him to refer that matter to the Court pursuant to the requirements of s445 of the Industrial Relations Act 1991. Clause 29 of the Industrial Relations (General) Regulations 1996, when read in conjunction with s249 of the Act, continues the operation of s445 of the Industrial Relations Act 1991 with respect to a State organisation until further regulations are made under the Act. Issue 12 The issue which now arises for determination is whether the Court should answer affirmatively the question raised by the union pursuant to s288(1) of the Act and, if so, whether the Court should exercise its discretion in favour of the applicant by the making of orders pursuant to subss288(3) and (4) of the Act. Background 13 The union is an organisation formed as a result of an amalgamation in 1991 between the Seamen's Union of Australia, New South Wales Branch and the Firemen and Deckhands Union of New South Wales; those organisations being industrial unions of employees then registered under the Industrial Relations Act 1991. 14 The rules of the amalgamated organisation (being the rules of the union), contained the transitional rule which is the focus of these proceedings. 15 The Maritime Union of Australia is a counterpart organisation to the union and is registered under the Workplace Relations Act 1996 (Cth). It was formed as a result of an amalgamation in 1993 of the Seaman's Union of Australia and the Waterside Workers Federation of Australia, both then registered under federal law. At the time of the amalgamation of those unions there existed a common membership for both the Seaman's Union of Australia and the applicant. It should be noted that the eligibility for membership rule of the union is a consolidation of the eligibility rules of the Seamen's Union of Australia, New South Wales Branch and the Firemen and Deckhands Union of New South Wales (being State registered organisations). Those eligibility rules do not include persons who are eligible to join the Waterside Workers Federation of Australia. 16 Mr Robert Darcey Coombs, the Secretary of the Central New South Wales Branch of the Maritime Union of Australia, gave evidence as to the amalgamation of these various State and federal unions, the transitional arrangements made in the rules of those amalgamated organisations, the position of office holders under transitional arrangements and elections held in the respective unions. That evidence was in the following terms: 8. Prior to the state amalgamation the following persons held the positions in the [Seaman's Union of Australia] as indicated: John Frederick Garrett Secretary FDU Robert Darcy Coombs Secretary Central New South Wales Branch Laurence Steen Secretary Northern New South Wales Branch Terrence Edward Tindale Secretary Southern New South Wales Branch 9. … 10. Upon state amalgamation, the persons referred to in paragraph 8 constituted the Committee of Management of the applicant 11. Annexed hereto and marked with the letter D is a copy of the Transitional Section of the rules of the MUA which came into operation upon federal amalgamation and ceased to operate when the persons elected in the Quadrennial Elections in 1999 took office. 12. The Transitional Section rules of the MUA contemplated that upon federal amalgamation until elections to be held in 1995, officers in the NSW branches would be filled by persons named in the rules having regard to the position that they occupied in the amalgamating organisations prior to federal amalgamation. 13. Upon federal amalgamation, the following persons held the positions in the MUA as indicated: John Frederick Garrett Joint Assistant Branch Secretary - Central New South Wales Branch (S) Robert Darcy Coombs Joint Branch Secretary - Central New South Wales Branch (S) Laurence Steen Joint Branch Secretary - Northern New South Wales Branch (S) Terrence Edward Tindale Joint Branch Secretary - Southern New South Wales Branch (S) The letter S indicates that the position was to be filled by former SUA members (including persons who had since joined, but by reason of occupation could have been such a member) in elections to be held in 1995. 14. Until the MUA elections conducted in 1995 the persons referred to in paragraph 13 constituted the committee of management of the applicant. 15. As a result of MUA elections conducted in 1995 the persons held the positions in the MUA as indicated: John Frederick Garrett Assistant Branch Secretary - Central New South Wales Branch Robert Darcy Coombs Joint Branch Secretary - Central New South Wales Branch Laurence Steen Joint Branch Secretary - Northern New South Wales Branch Mark Armstrong Branch Secretary - Southern New South Wales Branch 16. Until the MUA elections conducted in 1999 the persons referred to in paragraph 15 constituted the committee of management of the applicant. 17. As a result of MUA elections conducted in 1999 the persons held the positions in the MUA as indicated: John Frederick Garrett Deputy Branch Secretary - Central New South Wales Robert Darcy Coombs Branch Secretary - Central New South Wales Branch Jim B Boyle Branch Secretary - Northern New South Wales Branch Mark Armstrong Branch Secretary - Southern New South Wales Branch 18. The persons referred to in paragraph 17 have constituted the committee of management of the applicant since the election there referred to. 19. All officers of the applicant are honorary and the persons occupying those positions since amalgamation have been paid officials of the MUA. 17 It is clear from this evidence that, whilst elections were conducted in the Maritime Union of Australia in 1995 and 1999, elections were not conducted in the union (notwithstanding that the union was the State counterpart of the federal organisation). Furthermore, the union did not avail itself of the provisions of r12 of the rules which provided for the election of officers in a branch of the federal organisation to be elected for the purposes of the State organisation. 18 Prior to 1995, the office holders in the union (holding office by dint of the transitional rule) were the same office holders within counterpart positions in the Maritime Union of Australia. After the 1995 and 1999 elections were held in the federal organisation, two of the officers of the State union, Laurence Steen and Terrence Tindale (who held offices as branch secretaries and members of the committee of management of the Union under the transitional rules), no longer held offices under the counterpart branch of the federal organisation (although Mr Steen continued to hold a relevant office in the federal organisation after the 1995 election). In consequence, those persons ceased to occupy positions in the union, notwithstanding the requirements of r21.2 of the rules. Messrs Garrett, Coombs, Boyle and Armstrong have purported to act as the committee of management of the union since the 1999 election of the Maritime Union of Australia (although in an honorary capacity). They are remunerated by the federal organisation. 19 It is also relevant to note the circumstances under which the Deputy Industrial Registrar came to refer the circumstances to the Court. 20 On 15 December 2000, Mr W Giddins, a National Industrial Officer of the Maritime Union of Australia, acting on behalf of the union, wrote to the Industrial Registrar. That letter stated that the union believed itself to be in breach of its rules concerning the requirement for an election to be held in 1995 and, as more than four years had passed, the union believed that some rectification would be required to amend the situation. Mr Ian Jordan of the Industrial Registry, on behalf of the Industrial Registrar, then responded to that letter on 29 December 2000. He indicated that he believed that it appeared, on the face of what had been represented to him, that a breach of the rules had taken place and that, as such, he was bound to refer that matter to the Industrial Relations Commission in Court Session under s445 of the Industrial Relations Act 1991, having regard to cl29 of the Industrial Relations (General) Regulation 1996. The union contended in these proceedings that the steps taken by the Industrial Registrar were, in this respect, appropriate. 21 This initiative by Mr Giddins was taken in the following circumstances: 1. Mr W G McNally, the solicitor acting for the union in this matter, advised Mr Coombs sometime prior to October 2000 that an apparent invalidity had arisen in the affairs of the union by virtue of an election having not been conducted in that organisation, notwithstanding elections within the Maritime Union of Australia. 2. The relevant officers had not appreciated the need for the holding of separate elections in the union, but upon the taking of legal advice proceeded to take steps to rectify the difficulty. 3. Prior to the aforementioned communication with the Industrial Registrar, the Maritime Union of Australia communicated the deficiency in the conduct of the affairs of the union to its members at its regular monthly meeting held in October 2000. 4. After the identification of the difficulty by Mr Giddins to the Industrial Registrar, the Maritime Union of Australia communicated to its members (at a further monthly meeting convened in February 2001) that the deficiencies in the union's conduct in relation to the holding of elections had been referred to the Industrial Registrar. 5. Communications with the members of the union are ordinarily undertaken by this system of monthly meetings. Grounds of the Application 22 In the submissions made by the union in relation to the reference proceedings, it was submitted that the union's registration should not be suspended pursuant to s445 of the Industrial Relations Act 1991 for the following reasons: 1. The organisation and its members had acted in good faith; 2. The SUANSW has 1170 members; 3. Currently before the Commission are s19 award reviews of the following awards in respect to which the SUANSW is the only organisation of employees appearing and substantial negotiations with employer representatives have taken place: · Wire Drawn Ferries (State) Award · Firemen and Deckhands, etc, Small Tug Boats (State) Consolidated Award · Firemen and Deckhands, etc Small Tug Boats (Remuneration)(State) Award · Marine Motor Drivers, Coxswains etc, Small Tug Boats (State) Consolidated Award · Motor Ferries (State) Consolidated Award · Firemen and Deckhands' etc State Transit Authority of New South Wales Ferries (State) Award · Marine Charter Vessels (State) Award 4. The SUANSW undertakes to file an application under s288 of the Act in accordance with the draft application attached. (Attachment 2). This is the preferred option. 5. In the alternative, the SUANSW is prepared to undertake that not less than 10% of its members will apply in writing to the Industrial Registrar requesting the Industrial Registrar to arrange for the conduct of an election. 23 In its application in this matter, the union identified the following grounds in support of the relief sought by it: 1) The organisation and its members have acted in good faith. 2) The orders sought will not do any substantial injustice to the organisation, or any member or creditor of the organisation or any person having dealings with the organisation. 3) The orders sought will rectify the invalidity which has occurred. 4) The orders sought will modify the consequences in law of the invalidity. 5) The orders sought will validate any act, matter or thing rendered invalid by or because of the invalidity. 6) The orders sought will ensure that the applicant continues to represent its members in the manner regulated by the Act. 7) The orders sought are consistent with the objects of the Act. 24 In the particulars accompanying these grounds and reasons it was stated that the eligibility membership rule of the applicant coincided with the eligibility rule of the Maritime Union of Australia, with the exception that it did not include persons who were eligible to join the Waterside Workers Federation or persons who were eligible to join the Western Australian Maritime Workers Union; the eligibility rule for membership of the Maritime Union of Australia was a consolidation of the eligibility for membership rule of the Seaman's Union of Australia, the Waterside Workers Federation and the union and that upon amalgamation, the transitional rule of the applicant provided that the former Secretary of the Firemen and Deckhands Union of New South Wales (John Garrett) and the persons who held the positions of secretary of each of the three branches of the Maritime Union of Australia (R D Coombs, T E Tindale and L Steen) would constitute the committee of management of the applicant. It was also submitted that all officers of the applicant are honorary positions since amalgamation, as those persons were paid officials of the Maritime Union of Australia. Consideration 25 The provisions of s288 of the Act require the Court to firstly consider whether an invalidity has occurred, in a relevant respect, in an organisation before considering whether any orders should be made pursuant to s288(3). In particular, the Court is required to determine whether an invalidity has occurred in relation to the matters described in s288(1)(a), (b) or (c). These requirements represent, in my view, the jurisdictional prerequisites to the making of any orders pursuant to subss288(3) and (4). 26 However, the discretion residing in the Court to declare an invalidity under s288(1) is wide. This much is clear from the face of the provisions of s288(2). That conclusion also arises from an examination of decisions of the Federal Court of Australia concerning s171C(1) of the Conciliation and Arbitration (Organisations) Act 1974 (Cth), a statutory provision in relevantly similar terms to subss288(1) and (2) of the Act. The Court should, in my view, have regard to the decisions of the Federal Court in relation to s171C of the Conciliation and Arbitration (Organisations) Act 1974 in considering the operation of s288 of the Act for similar reasons to those adopted by this Court in Hardacre v Health and Research Employees' Association of New South Wales (1999) 90 IR 97 at 107 - 108. 27 I consider that the decision of Sweeney and Evatt JJ in Re Australian Building Construction Employees' and Builders' Labourers' Federation (1978) 46 FLR 308 is apposite in this regard. Their Honours made the following observations (at 312 - 313) with respect to s171C(1) of the Conciliation and Arbitration (Organisations) Act 1974: It is clear that the group of sections constitute an attempt by the legislature to provide methods whereby the legal and effective functioning of organisations can be secured and to end the difficulties which have arisen in arbitral jurisdictions where there has been a failure on the part of organisations properly to comply with the rules…In considering whether it is appropriate to exercise the wide jurisdiction given to us, we must clearly have regard to the objects of the Act. We are satisfied that orders made with a view to enabling an organisation to function and operate effectively and legally will assist in achieving these objects and it will be appropriate to make such an order … 28 I note that under the Act, s3(d) relevantly specifies the following object: (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, 29 The decision of Northrop and Ryan JJ in Re Food Preservers' Union of Australia and Anor (1998) 79 ALR 138 at 144, with respect to s171C of the Conciliation and Arbitration (Organisations) Act 1974, is also instructive. Their Honours stated: Section 171C of the Act is remedial in nature. The court should form a broad view of the power conferred by that section. It should not take a narrow or technical approach to the exercise of the power. 30 I also note the observations of Gray J (in the minority decision) in Re Food Preservers' Union (at 147) as follows: Section 171C is an enabling provision, and should be interpreted generously. It is part of a series of provisions, found in Part IXA of the Act, and inserted as a result of the recommendations of the Committee of Inquiry on Co-ordinated Industrial Organizations. Reference to that report shows that the provisions are intended to benefit organizations generally, by ensuring, or enabling them to ensure, that past invalidities do not affect the present and future conduct of their affairs: see Re Australian Building Construction Employees' and Builders' Labourers' Federation (1978) 46 FLR 308, at pp 312-313, per J.B. Sweeney and Evatt JJ. The expression "invalidity", which is defined, but not exhaustively, in s.171A of the Act, is apt to include an act purportedly done under statutory authority, but lacking any actual statutory power. 31 Having regard to those authorities, the Court considers that there has occurred an invalidity in the management and administration of the union for the purposes of s288(1). The invalidity arises from the failure of the relevant officers of the union to take such steps as were necessary to convene an election in 1995 with respect to the various offices in accordance with r21.1 of the rules. Nor did the officers conduct an election after 1995. Furthermore, an invalidity occurred in an appointment in the union for the purposes of s288(1)(b) in so far as persons (other than those specified in r21.2) were purportedly appointed as members of the committee of management of the union. 32 An invalidity may have also occurred in "an election in" the union for the purposes of s288(1) of the Act. It would appear that the expression "an election in" s288(1)(b) is wide enough to incorporate the failure to hold an election in accordance with the rules in 1995. The holding of an election, as now contemplated by the application, after the year 1995, would seem to be contrary to the provisions of r21.1 and would thereby constitute an invalidity, in so far as the officers of the union now hold or attempt to hold such an election. An action taken by an officer which is beyond power constitutes an invalidity: Gordon v Carroll and Ors (1975) 27 FLR 129 at 161. 33 The making of this declaration as to the existence of an invalidity pursuant to s288(1) of the Act establishes the jurisdictional basis upon which the Court may then proceed in the exercise of its discretion to make orders pursuant to subss288(3) and (4) of the Act. The orders sought by the union have been earlier set out in this decision. 34 It should be noted before proceeding to consider the orders sought by the applicant, that the Court considers that sufficient notice had been given of these proceedings (and of the subject matter of these proceedings) by the steps taken by the union and the Maritime Union of Australia preceding the bringing of the application. 35 The discretion conferred upon the Court pursuant to s288(3) provides the Court with a wide discretion to determine the circumstances under which relief may be granted under the section. In consideration of the counterpart section to s288(3) under the Conciliation and Arbitration (Organisations) Act 1974 (namely s171C(2)(a)), Wilcox J in Jess v Scott (1986) 14 IR 341 at 347 stated: The words of section 171C(2)(a) are sufficiently wide to encompass any order designed to rectify an invalidity, of whatever nature and however caused. But, having regard to the history of the section, there is force in the submission of the respondents that Parliament did not envisage that the section would be used as a mechanism, additional to section 141, for enforcing rules and that section 171C(2)(a) was intended merely to allow latitude in designing the orders necessary to cure any invalidity or to negative its consequences. 36 The Australian Industrial Court in Gordon v Carrol (at 161 - 162) described the discretion which may be exercised under s171C(2)(a) as follows: The next question is what are the powers conferred on the court in para.(a). The word "may" imports a clear discretion allowing the court to do nothing. In sequence, its next power is to "rectify" or "cause to be rectified" an invalidity. To "rectify" is to put right or to restore to a sound or healthy condition, and when one applies this meaning to "administration" or "management", then taking into account the wide meaning of "invalidity" defined inclusively in s171A , it is clear that to put right a payment without lawful authority to an officer of the organisation includes an order that repayment be made. Paragraph (a) goes on to give the court power "to negative, modify, or cause to be modified, the consequences in law of the invalidity". This power is directed to giving the court power to upset or change the legal effect of the transaction tainted with the invalidity. Thus, in certain circumstances a payment without power, for example, a payment pursuant to a mistake of law, would be irrecoverable, but these words would seem to allow the court to override the general law and make such payment recoverable. Paragraph (a) goes on to give the court power to "validate any act, matter or thing rendered invalid by or as a result of the invalidity". When one considers the possible chain of invalid acts such acts as that set out above, the scope of this power becomes clear. The court can select any events in the chain to validate or not as it thinks fit. For example, the election could be validated. The appointment of the officer could be left invalid. The act performed by the officer in the purported exercise of his powers could be validated. Paragraph (b) provides the conditions on which the court's power are to be used and par.(c) gives the court wide powers with the intention of allowing it to deal totally with the invalidity and any consequences which that invalidity may have. 37 I again refer to the judgment of Sweeney and Evatt JJ in Re Australian Building Construction Employees' and Builders' Labourers' Federation (at 313) on this occasion as to the discretion available to the Court under the counterpart of s288(3) as follows: In considering whether it is appropriate to exercise the wide jurisdiction given to us, we must clearly have regard to the objects of the Act. We are satisfied that orders made with a view to enabling an organisation to function and operate effectively and legally will assist in achieving these objects and it will be appropriate to make such an order if the court can satisfy itself that such an order would not do substantial injustice to the organisation or to any member or creditor of the organisation or to any person having dealings with the organisation. 38 In Re Food Preservers Union, Gray J approached the court's discretion under 171C(2)(a) as follows (at 159): In determining whether to exercise its discretion in favour of making an order, the court should bear in mind the beneficial and enabling nature of the section. Unless there is sound reason to refuse an order, it should be made. 39 The broad discretion conferred under s288(3) of the Act is extended by the provisions of s288(4) which permits the Court, in circumstances where an order is made under s288(3), to give such ancillary or consequential directions as it considers appropriate. 40 The discretion of the Court is, however, constrained by the provisions of s288(5) of the Act which prevent the Court from making an order pursuant to s288(3) unless the Court first satisfies itself that such an order would not do a substantial injustice to the organisation, any member or creditor of the organisation, or any person having dealings with the organisation. 41 It is appropriate for the Court to make orders in this matter 'rectifying' the invalidity declared by the Court (to the extent that officers have failed to take necessary steps in relation to the holding of an election), 'negating' and 'modifying' the consequences in law of the invalidity (to the extent that any officers have acted outside the rules of the organisation having regard to the provisions of r21.2) and 'validating' acts (including specifically the taking of any acts to hold an election after 1995, notwithstanding the requirements of r21). 42 The Court is satisfied that the making of such orders would have the effect of enabling the organisation to function and operate effectively and legally. In so doing, the orders of the Court will achieve the objects of the Act and, in particular, the object contained in s3(d). The making of orders will permit the organisation to function effectively as a representative body of its members in industrial relations (noting that the union is presently participating in a number of industrial proceedings under this Act) and will restore proper and responsible management and control of that body. 43 Further to these considerations, the Court considers that this is a matter where it is appropriate to make orders rectifying the invalidities earlier identified having regard to the following factors: 1. Those responsible for the invalidity have acted bona fide: see Re Australian Building Construction Employees' and Builders' Labourers' Federation (at 311 - 312). 2. The invalidities did not arise as the result of a knowing and deliberate act on the part of the officers of the union. They arose due to a mistaken belief that the elections otherwise held in the federal organisation had met the requirements of the rules of the union for the holding of elections. The error was, in essence, a mistake in understanding the relevant law. 3. The officers of the union, upon receipt of the appropriate legal advice, took all steps reasonably available to them to rectify the deficiencies in the affairs of the union and did so in an expeditious manner. They exposed those deficiencies to the relevant authorities in a manner which was both frank and transparent. 44 Before the Court may exercise, however, a discretion to make orders pursuant to s288(3) it must satisfy itself as to the requirements of s288(5). 45 Having regard to the requirements of s288(5) of the Act, I consider that no issue of injustice relevant to the organisation or its members arises from the orders sought in the present matter. The proposed orders are beneficial to the organisation and its members as they restore conformity, so far as practicable, with the requirements of the rules of the union. 46 In substance, the orders provide that the election which was contemplated to be held in 1995 would now occur. True it is, the proposed orders would result in certain persons, whose names do not appear in r21.2 of the rules, constituting the committee of management of the union. However, the orders are merely interim in nature in this respect and permit the effective conduct of the affairs of the union until the holding of elections. The persons who have been nominated to temporarily act as the committee of management are either those persons referred to in r21.2 or persons who, as a consequence of elections held in the counterpart branches of the Maritime Union of Australia, have purported to act as part of the committee of management since 1995. Further, no complaint has arisen from those latter persons purporting to act as the committee of management of the union since that time. It should also be noted that the positions are presently honorary in nature. 47 A further question arising under s288(5), however, is whether any creditor of the organisation or any other person having dealings with the organisation may suffer a substantial injustice. That question should be answered, in my view, in the negative. No adverse consequence was identified for any creditor or any other person having dealings with the union during the course of the proceedings. This is, no doubt, a result of the federal organisation having played a role with respect to the financial arrangements of the union since 1995. 48 I have considered the form of the orders proposed by the applicant. It would appear that order 2.2 is unnecessary, particularly given amendments which the Court proposed to make to proposed order 2.1. In this respect, if any particular difficulty arises, liberty to apply may be exercised by the applicant. 49 In all these circumstances, the Court makes the following orders: A. On the facts before it, the Court determines, declares and orders that an invalidity has occurred in the management or administration of and an appointment in the Seamens' Union of Australia, New South Wales Branch ("the union"); B. That upon the basis of such invalidity, the Court, being satisfied that the orders made herein do not do substantial injustice to the union or to any member or creditor of the union or to any person having dealings with the union, orders: 1. The union shall conduct an election of officers which election shall be held and declared in the year 2001. That election, so held, shall be conducted by the Electoral Commissioner in accordance with the rules of the union. Such election shall comprise all offices specified in r21 of the rules of the union and shall constitute, for all relevant purposes, the holding of any election required by r21 of the rules of the union; 2. Any applications made by officers of the union for and on behalf of the union to the date of this judgment shall be valid for the purposes of the rules of the union; 3. Any decision made by the committee of management of the union when constituted by any of John Frederick Garrett, Robert Darcy Coombs, Laurence Steen, Terrence Edward Tindale, Mark Armstrong and Jim B Boyle during the period 1995 to the date of this judgment and any taken acts taken by John Frederick Garrett, Robert Darcy Coombs, Laurence Steen, Terrence Edward Tindale, Mark Armstrong and Jim B Boyle in the performance of their duties and functions as the Secretary or Branch Secretaries of the union or in conformity with decisions of the committee of management of the union are validated; 4. Pending the declaration of the election referred to in order 1, John Frederick Garrett, Robert Darcy Coombs, Jim B Boyle and Mark Armstrong shall constitute the committee of management of the union. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.