Industrial Court of New South Wales CITATION: Local Government Association of New South Wales v The Electoral Commissioner for New South Wales and Returning Officer for the 2006 Local Government Association Election [2006] NSWIRComm 237 APPLICANT: Local Government Association of New South Wales PARTIES: RESPONDENT: Electoral Commissioner of New South Wales and Returning Officer for the 2006 Local Government Association Election FILE NUMBER(S): IRC 2709 of 2006 CORAM: Haylen J CATCHWORDS: Industrial Relations Act 1996 - s 154 - application for declaration - meaning of Rules of registered Association of employers - whether President precluded from re-nominating for office of President - rule providing for rotation of Presidency between metropolitan and country members - whether rule ambiguous - rule considered in its context and language did not preclude incumbent President from re-nominating for that position - rule separately considered having regard to extrinsic material and history of its operation - clear intention of rule making body that incumbent President may re-nominate for that office - declaration made accordingly LEGISLATION CITED: Interpretation Act 1987 Amalgamated Society of Engineers v Smith (1912-13) 16 CLR 537 at 559 Austereo Pty Ltd v Trade Practices Commission (1993) 115 ALR 14 at 48 Australian Electoral Commission v Hickson [1997] 1182 FCA 10 Dallikavik v Minister for Immigration and Ethnic Affairs (1985) 61 ALR 471 at 475-476 K & S Lakes City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423 Lake Macquarie Shire Council v Aberdare County Council (1970) 120 CLR 327 Mark Musgrave Hardacre v Health and Research Employees Association of NSW [1999] NSWIRComm 287 PKIU v Davies Bros Ltd (1986) 18 IR 449 CASES CITED: Pearce and ors v Vickers and ors (1994) 1 IRCR 39 at 43-44 Pickard v John Heine & Sons Ltd (1924) 35 CLR 1 at 9 Public Transport Commission of NSW v Murray More (NSW) Pty Ltd (1975) 6 ALR 271 at 282 R v Aird; ex parte AWU (1973) 129 CLR 654 at 659 per Barwick CJ Re Carter; re Federated Clerks Union of Australia, Victorian Branch (No 1) (1989) 32 IR 1 at 27 R v Cohen & Paine; ex parte Motor Accidents Insurance Board (1979) 27 ALR 263 at 270 per Mason J R v Young (1999) 46 NSWLR 681at 687 Roughan v Day and others (1991) 32 FCR 581 Short v W F Hercus Pty Ltd (1993) 40 FCR 511 Thompson v Goold [1910] AC 409 at 420 HEARING DATES: 14/07/2006 DATE OF JUDGMENT: 07/19/2006 APPLICANT: Mr M Moir of counsel SOLICITORS: Maddocks Lawyers LEGAL REPRESENTATIVES: RESPONDENT: Dr A Renwick of counsel SOLICITORS: Crown Solicitor JUDGMENT: - 12 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Haylen J 19 July 2006 Matter No IRC 2709 of 2006 LOCAL GOVERNMENT ASSOCIATION OF NEW SOUTH WALES v THE ELECTORAL COMMISSIONER FOR NEW SOUTH WALES AND RETURNING OFFICER FOR THE 2006 LOCAL GOVERNMENT ASSOCIATION ELECTION Application by Local Government Association of New South Wales for declarations and orders pursuant to s 154 of the Industrial Relations Act 1996 JUDGMENT [2006] NSWIRComm 237 BACKGROUND 1 Peter James Coulton is the Director of Corporate Services employed jointly by the Local Government and the Shires Association of New South Wales. The Local Government Association of New South Wales ("The Association") is a State Organisation registered under the Industrial Relations Act 1996. On 12 July 2006, Mr Coulton applied to the Court for Interim Orders and a Declaration pursuant to provisions of s 154 of the Industrial Relations Act 1996 seeking to have determined the operation of Rule 23(a) of the registered Rules of the Association. 2 The application for Interim Orders and a Declaration was sought as a matter of urgency as, in accordance with the Rules of the Association, the first steps were soon to be taken in the election process for members of the Executive Committee consisting of 25 members, 24 of whom are elected directly by conference delegates. The composition of the Executive Committee is a President, a metropolitan Vice-President, a country Vice-President, a Treasurer, an Immediate Past President, 10 country members and 10 metropolitan members. The Rules operate so that the Immediate Past President automatically assumes that position on the Executive Committee when a new President is elected. 3 The election of the Executive Committee is to take place at the Annual Conference which is to be held on 30 October 2006. The election is being conducted by the State Electoral Office ("the SEO"). The SEO intends to publish election notices on or by 24 July 2006 being the latest date under the Rules by which nominations may be called for the 2006 election. 4 An issue has arisen of concern to the Association following an indication given by the SEO that, in calling for nominations for the position of President, it would be indicated that the incumbent President would be ineligible to nominate again for that position because of the interpretation placed on the operation of Rule 23(a) by the SEO. Rule 23(a) provides as follows: The office of President shall alternate between members of country councils and members of metropolitan councils. 5 It appears that the SEO has adopted an interpretation of Rule 23(a) which results in a successful candidate for President being unable to re-nominate at the next election for that position after completing the two year term of that office. It follows from that approach that the SEO is of the view that the Rule intended that each two years there should be a rotation of the occupancy of the position of President with a Sydney member being replaced by a country member (or vice versa) every two years. 6 In affidavit evidence, Mr Coulton said that there was some history to the Rule and that history was not contested. The Rule was adopted by way of amendment at the 1994 Annual Conference having been proposed as a new Rule 25. That motion was proposed by Willoughby Council. In 1996, Willoughby Council sought clarification of the Rule so that the period of office of the President would be for two years and at the end of each two year period the office of President would pass from "a city incumbent" (sic). Apparently for a number of years, the office of President had alternated between city and country councils and Willoughby Council had assumed that would continue after the introduction of the two year term of office. 7 An Executive Note circulated at the 1996 Conference with the Business Papers in relation to the clarification sought by Willoughby Council said as follows: There has never been a restriction of election on merit of the President, other office-bearers or Executive members. The Constitution of the Association allows for an incumbent President to be re-elected if he/she maintains the confidence of conference delegates. When vacating office, the next President comes from the Metropolitan area if the incumbent came from the country and vice versa. 8 Willoughby Council's motion of clarification was withdrawn at the Conference. Mr Coulton noted that the statement accompanying the Willoughby Council clarification resolution of 1996 regarding the previous practice of alternation of the office of President was not correct and was incorrect specifically in relation to elections from 1991. The incumbent President of the Association in 1991 was Councillor Woods who was elected in late 1990 and had been re-elected in 1992 and 1994. After the 1994 Rule change, Councillor Woods was subsequently re-elected in 1996, 1998 and 2000 and retired from office not having re-contested the position in late 2002. 9 At the 2001 Annual Conference, Grafton Council again raised the provisions of Rule 23(a) and sought an amendment in the following terms: The office of President shall alternate on a two year basis between members of country Councils and members of metropolitan Councils. The accompanying supportive note from Grafton Council stated: To maintain a fair and equitable balance of the leadership of the Local Government Association of New South Wales there is no denying that Councillor Peter Woods OAM has had a significant input into the current and future direction of the Association and the Local Government industry within New South Wales. However, Council is of the view that there should be some balance with the leadership of the Local Government Association between country and metropolitan Councils which has obviously not occurred over the past 10 years. Councillor Woods has always promoted the need for country and metropolitan Councils to work together particularly in respect to balance State developments. By amending the Constitution to allow for alternative leadership will assist in improving the profile of Local Government in regional New South Wales. Mr Coulton referred to records of the Annual Conference recording that the motion proposed by Grafton was lost, meaning that the motion was put to the Conference and voted upon but was unsuccessful. 10 Other records placed before the Court indicated that, up to 1994, there was no special provision in the Rules relating to the office of President of the Association but, of the 20 Committee members, 10 were to come from country Councils and 10 were to come from metropolitan Councils. Those records showed not only the motion put forward by Willoughby Council earlier referred to but contained a supporting note from Willoughby Council and a proposed amendment on the same subject matter proposed by Albury Council. The note from Willoughby Council in support of its proposal stated: This long held practice has ensured that the interest of metropolitan and rural Councils are fairly represented. To formalise the practice by altering the Constitution would ensure such equity of interest would continue. 11 The amendment proposed by Albury Council in 1994 was to insert a new Rule in the following terms: (a) the President of the Association shall hold office for not more than one term; (b) the office of President shall alternate between members of country Councils and members of metropolitan Councils. The proposed amendment to the Constitution was supported by a note from Council in the following terms: The purpose of this motion is to limit the term of an individual in the presidency to two years and to alternate the position of President each two years between metropolitan and country members. 12 The Association's record of decisions showed that the Albury Council motion was lost and the Willoughby Council resolution was passed. It also recorded that on legal advice the proposed Rule, on being adopted, was to be inserted as Rule 23(a). 13 Mr Coulton's affidavit also provided a history of the recent approach to the Rule dating from 1996. Since that time, the approach taken to Rule 23(a) permitted the incumbent President to be eligible to re-contest the position at successive elections with the alternate provision having effect when the incumbent failed to be re-elected or stood down from the office of President. In 1996, the Electoral Commissioner asked the Association for clarification of the operation of Rule 23(a) in relation to the eligibility of a candidate for the office of President. The Association replied that, after discussions with the Association's Chief Executive Officer and Legal Officer, it had been determined that as the Rules stand it should be interpreted that eligible candidates for the office of President include the incumbent together with any councillors from members' councils from the "alternating group", that is, if the incumbent was from a country council then that person together with all councillors from metropolitan councils were eligible to nominate for President. The Electoral Commissioner accepted the interpretation determined by the Association and proceeded with the 1996 elections on the basis that the incumbent President was eligible for election to the position of President in that election. In 2000, 2002 and 2004 the Electoral Commissioner asked for this interpretation to be reconfirmed and upon being so advised operated in each of those elections on the basis that the incumbent President was eligible for re-election under Rule 23(a). 14 Despite the Electoral Commissioner having raised the eligibility of an incumbent President to re-nominate for the position on a number of previous occasions and having acted on the interpretation adopted by the Association, an indication was given to the Association that for the 2006 election this approach may not be correct and that, on the proper construction of the Rule, the position of President was to rotate between a country and a city member every two years resulting in an incumbent President being ineligible to nominate for the office in consecutive elections. In those circumstances, the Association, through Mr Coulton, filed the present application seeking Interim Orders and a Declaration as to the operation of Rule 23(a). In doing so, it was noted that the meaning of the Rule had to be clarified prior to 24 July 2006 when nominations for the Executive Committee would be called and that the Rules of the Association did not allow sufficient time to alter those Rules if, against the interpretation that had been acted on for many years, the Rule was found to exclude the incumbent from re-nominating for that office in the 2006 election. That position was confirmed by a reading of the Rules which showed that it was only an Annual Conference that could alter the Rules of the Association and it was at the October Annual Conference 2006 that this election would take place. As the Court was able to expedite the hearing on the application for a declaration, interim orders were unnecessary. THE RELEVANT RULES 15 The debate in the present matter occurs in the context of the following Rules of the Association: (a) under Rule 11, the Annual Conference is to be held no later than 30 November each year on a date determined by the Executive; (b) under Rule 12, "control and government" of the Association is vested in the members at Conference and between Conferences the power is vested in the Executive Committee; (c) under Rule 19, the Executive Committee is to consist of the President, two Vice-Presidents (one from a country council and the other from a metropolitan council), a Treasurer and 20 Committee members, 10 from country Councils and 10 from metropolitan Councils together with the immediate past president; (d) under Rule 20, except as otherwise provided, members of the Executive Committee are to assume office immediately at the conclusion of the Conference at which they were elected; (e) by Rule 22, members of the Executive Committee are to be elected biennially at the Annual Conference; (f) by Rule 23, the term of office of all members of the Executive Committee shall commence at the conclusion of the Annual Conference at which they were elected and shall continue until the conclusion of the second Annual Conference thereafter; (g) Rule 23(a) provides that the office of President shall alternate between members of the country Councils and members of metropolitan Councils; (h) Rule 25 provides as follows: (a) upon the election of a President of the Association or upon a person succeeding to the office of the President in accordance with this Constitution, the next preceding President shall immediately become Immediate Past President and shall continue in that office until some other person becomes the next preceding holder of the office of President; (b) in this Clause the next preceding holder of the office of President shall be the former President who last held that office and who is not disqualified from office under Clause 26; (c) it shall not be a bar to a person assuming the title of Immediate Past President that he or she has held that office on one or more previous occasions; (i) Rule 26 provides for a casual vacancy to occur in an office when the holder of the office dies, resigns, is absent from three consecutive meetings without a satisfactory apology, is found mentally ill or becomes unsound of mind or is incapable of performing the duties of the office, ceases to hold office as a member of the Council or is removed from office for misconduct under Rule 27; (j) under Rule 28, in the event the office of President becoming vacant during the term of that office, if the former President had come from a country Council the Vice-President coming from a country Council is to succeed to the office of President and similarly where the former President was a metropolitan Councillor the Vice-President from a metropolitan Council is to succeed to the office of President. If there was no such Vice-President in office the position is to be filled by the Executive Committee from within the Committee. THE SUBMISSIONS 16 The Association submitted that the interpretation of Rule 23(a) favoured by the Electoral Commissioner treated the word "alternate" as meaning "alternates on a two year basis": the question of whether an implication should be found in the express words of an enactment depended on whether it was proper or legitimate to find the implication in arriving at the legal meaning of the enactment having regard to the accepted guides to legislative intention (Austereo Pty Ltd v Trade Practices Commission (1993) 115 ALR 14 at 48). The normal rules of statutory interpretation required the words to be given their ordinary meaning and these rules applied to the interpretation of Rules of an industrial organisation (Australian Electoral Commission v Hickson [1997] 1182 FCA at 10). 17 The Rules of a registered organisation should be given a sensible meaning where possible and the wording should not be scrutinised with an overly critical or technical eye. Courts and tribunals should generally interpret words and phrases in the rules of an organisation in a generous manner having regard to the fact that the Rules will often have been written by laymen with a common understanding of expressions used in their industry but unfamiliar with legal rules of construction (see R v Aird; Ex parte AWU (1973) 129 CLR 654 at 659 per Barwick CJ; R v Cohen & Paine; Ex parte Motor Accidents Insurance Board (1979) 27 ALR 263 at 270 per Mason J). A generous and non-restrictive approach should be adopted to the interpretation of the rules of an industrial organisation (Mark Musgrave Hardacre v Health and Research Employees Association of NSW [1999] NSWIRComm 287). Where the wording of the Rules of an organisation allow it, they are to be construed in favour of eligibility for office rather than against eligibility (Re Carter (1989) 32 IR 1 at 27, approved in Hickson at 18). 18 The words of the Rule should be construed having regard to their apparent purpose as disclosed by the terms of the Rules read in the context of the Rules as a whole. The word "alternate" connotes one after the other, it means to follow each one after the other, to perform by turns, to interchange (Macquarie). Of necessity, to alternate is to swap between two alternatives but that did not necessarily imply any temporal limitation or restriction. 19 There was no temporal limitation in Rule 23(a). The Rule did not contain the words "a two year period" and that weighed heavily against the construction adopted by the Electoral Commissioner. If that was the intention of the Rule then it would have stated so using those words. The Rule could be contrasted with the equivalent Rule appearing in the Constitution of the Shires Association of New South Wales which expressly provided that the President shall only serve a two year term. The existence of that Rule in the Constitution of another Local Government organisation reinforced the proposition that, if the Association had intended to limit the office of President in the manner suggested by the Electoral Commissioner, then Rule 23(a) would have been differently worded. The usual rules of construction tended against reading words into legislation and, in the absence of clear necessity, it was wrong to do so (Thompson v Goold [1910] AC 409 at 420; Dallikavik v Minister for Immigration and Ethnic Affairs (1985) 61 ALR 471 at 475-476). 20 Certain stringent conditions had to be met before a Court would construe an enactment such that missing words would be read into the provision. In Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423, McHugh JA laid down three conditions before such a course could be taken: First, the Court must know the mischief with which the Act was dealing. Secondly, the Court must be satisfied that by inadvertence Parliament has overlooked an eventuality which must be dealt with if the purpose of the Act is to be achieved. Thirdly, the Court must be able to state with certainty what words the Parliament would have used to overcome the omission if its attention had been drawn to the defect. In R v Young (1999) 46 NSWLR 681 at 687 , Spigelman CJ had stated that in the absence of any one of these three conditions specified by McHugh JA, the Court could not imply the missing text into the words of the enactment. 21 In relation to Rule 23(a) it was not possible for the Court to be satisfied that by inadvertence the Association had overlooked the possibility that the office of President should alternate between members of Sydney and country councils every two years. The evidence showed that as recently as 2001 the members of the Association had turned their "mind and will" to the question of whether the office of President should alternate "on a two year basis", and that proposition was rejected. Further, it could not be stated with any certainty that the intention of the members was that the office of President alternate "on a two year basis" - the evidence, in fact, pointed in the opposite direction. 22 The evidence showed that over a number of years the Association had confirmed the practice of re-electing incumbent Presidents. Attempts to narrow the wording of Rule 23(a) had been consistently rejected by the members. This liberal approach was to be preferred and adopted. 23 To imply the words "on a two year basis" in Rule 23(a) would cause significant inconvenience to the Association and would effectively frustrate the ability of the membership to re-elect an incumbent President who had capably fulfilled the office and maintained the confidence of the members. The inconvenience caused by a suggested construction and whether it led to irrational or unjust consequences was a relevant consideration (Lake Macquarie Shire Council v Aberdare County Council (1970) 120 CLR 327; Public Transport Commission of NSW v Murray More (NSW) Pty Ltd (1975) 6 ALR 271 at 282). 24 It was submitted that the surrounding provisions supported the Association's construction of Rule 23(a). In particular, Rule 25 provided for succession of Presidents by: (a) assuming the next preceding President became the Immediate Past President; (b) recognising the next preceding holder of the office of President could be a former President who last held that office, not being disqualified from office under Rule 26; (c) providing that it was no bar to a person assuming the title of immediate Past President that he or she had held that office on more than one previous occasion. To logically construe Rule 25, and in particular sub-Rules (b) and (c), it was necessary to imply that a person could only hold the office of Immediate Past President on more than one occasion consecutively if an incumbent President was re-elected. 25 It was submitted that the Electoral Commissioner's construction would not only involve a significant re-drafting of Rule 23(a) but would introduce a non-liberal and restrictive approach to the Rule. The objects of the Act are able to be used as a guide to assist in the interpretation of the Rules of an Association (s 235 of the Act, and Hardacre at page 14). One of the objects of the Act was to encourage participation in industrial relations by representative bodies of employees and employers and to encourage responsible management and democratic control of those bodies. Restricting Rule 23(a) as proposed would be contrary to the democratic control of the Association and contrary to the clearly expressed wishes of the members of the Association. However, allowing an incumbent President to stand for re-election was nevertheless subject to the control of a free vote every two years and continuity in the presidential office depended on support from the members. Against this, the interpretation urged by the Electoral Commissioner would overturn the decisions of the 1996 and 2001 Annual Conferences where the current interpretation and approach to Rule 23(a) and the practice in relation to it was endorsed. 26 The submission for the Electoral Commissioner was simple and straightforward: there was no ambiguity about the meaning of Rule 23(a) and it meant what it said: the word "alternate" meant "to interchange (one thing) by turns with, or to cause (a thing) to succeed and be succeeded by another continuously" (OED); or "to follow one another in time or place reciprocally: day and night alternate; darkness alternates with light" (Macquarie). This construction was confirmed by reading together Rules 19, 22, 23, 23(a) and 25. 27 Looking at the Rules in their context, the Executive Committee included a President, and all members of the Executive Committee were elected biennially at the Annual Conference in the election year and their term of office was no more than two years. Rule 23(a), in stating that the office of President shall alternate between members of country Councils and members of metropolitan Councils, was to be construed in that context. It followed as a matter of clear language that the office of President must be filled every two years by a person from the alternate source, either the metropolitan or country councillors. 28 In relation to the submissions made on behalf of the Association it had to be noted that in Carter the Court had carefully expressed itself in that, where the Rule would allow a construction in favour of eligibility for office, then that construction should be given to the Rule. That was not the position in relation to the present Rule. It was also argued that the history of the Rule was irrelevant to the task and that the Rules had to be construed in their context. In any event, the history pointed in the other direction: the amendment proposed by Albury Council sought to restrict the occupancy of the position of President to one term and not permit a second term at any time. That approach was rejected and the present Rule as approached by the Electoral Commissioner allows a member to hold the office of President more than once. DELIBERATION 29 On the material before the Court it appears that the Association has adopted a policy of sharing positions on the Executive Committee between metropolitan members and country members. That is an important context in which to approach the task of construing Rule 23(a). 30 There is no clear test for determining whether an ambiguity exists in a provision (PKIU v Davies Bros Ltd (1986) 18 IR 449) although Isaacs ACJ was prepared to find ambiguity where there was a difference at the Bar (Pickard v John Heine & Sons Ltd (1924) 35 CLR 1 at 9). On its face, I believe that there is ambiguity in the meaning and operation of the word "alternate" in Rule 23(a). The holding of the office of President can "alternate" between metropolitan and country members not only by rotation at the end of each two year term but there is also an alternation when an incumbent President, having served more than one term, ceases to hold office because of standing down or failing to be re-elected. In my view, the policy of sharing positions is preserved on either approach to the rule. Where a President is elected for more than one term, the Immediate Past President (being either a metropolitan or country member) remains on the Executive Committee in the position of Immediate Past President, thus preserving the balance of country and city interests in the operation of the Association. 31 I find force in the Association's submission that having this Rule operate as proposed by the Electoral Commissioner requires the addition of words perhaps similar to those adopted by the Shires' Association. Whether that approach or some other is adopted it seems to me that Rule 23(a) would require additional words to bring about a situation where the incumbent must stand down every two years and would be ineligible to re-nominate for the position at the end of each term as President. In addition, Rule 23(a) does not appear to be a Rule concerning eligibility for nomination or disqualification from office. It is an enabling Rule giving effect to the Association's apparent policy to share positions, including the position of President between country and metropolitan members but not imposing a restriction on the number of times that a person may occupy the position of President in successive terms. 32 Rule 25 identifies the person who is to be the Immediate Past President and in sub-rule (b) does so by reference to the person who last held the office of President and "who is not disqualified from office under Clause 26". Rule 25(b) does not treat Rule 23(a) as a disqualification from the office of President at the conclusion of holding that office for a term. It appears from the previous Rules tendered in evidence that Rule 25 was in the same form when Rule 23 (a) was introduced by way of amendment. While that may provide some explanation as to why Rule 25 remains unaltered, it does leave the residual concern that if Rule 23(a) was to operate as a disqualification from a consecutive term as President, then it might have said so either in Rule 23(a) or be listed as a disqualifying provision in Rule 25(b). Neither course was chosen. 33 Further, in 1994, it was proposed that what is now Rule 23(a) be new Rule 25, the existing Rule 25 being then a rule dealing with the office of the Immediate Past President. It was noted in the records of the Association that, on legal advice, the Rule became Rule 23(a). Rule 23 is not a rule laying down the term of office of the President but lays down when the term of office of all members of the Executive Committee commences, namely, at the conclusion of the Annual Conference at which they were elected. It is Rule 22 that provides that members of the Executive Committee are to be elected biennially at an Annual Conference. Had the words of Rule 23(a) been inserted as a sub-rule of Rule 22, there may have been stronger ground for concluding that the intention was to limit the term of a President to two years before it should alternate to a member from the other constituency. 34 Quite apart from inserting Rule 23(a) in a rule dealing with the commencement of a term, rather than eligibility or lack of eligibility for office (eligibility generally being dealt with by Rule 44 together with Rule 21), it was also decided that the 1994 amendment should not form part of Rule 25, a rule dealing generally with the identification of the person to become the Immediate Past President. It is of some significance that Rule 25(a) operates on the basis that, upon the election of a President of the Association or a person succeeding to the office of President in accordance with the Constitution, the next preceding President shall immediately become Immediate Past President "... and shall continue in that office until some other person becomes the next preceding holder of the office of the President". This Rule does not contemplate a two-year term for the incumbent and then a rotation to a country or metropolitan member, but seems to wait for the incumbent to fail to renominate or fail to be re-elected to that office. Again, this is consistent with the construction urged by the Association. The same may be said about Rule 25(b), a rule that might have been amended at the same time that Rule 23(a) was inserted if the new rule was to have the effect of limiting the term of any President to two years before the office was to rotate to the other constituency. 35 In the context of legislative provisions to encourage participation by members in registered organisations and their democratic control, a member reading the Rules should be able to easily identify circumstances in which he or she might become ineligible to contest an office, here the office of President. I do not believe that it requires too much of the framers of a rule, given the generosity of approach usually accorded such documents, to state with some clarity when a member may become ineligible to nominate and occupy an office. Rule 23(a) does not provide in clear terms that an incumbent President shall not be eligible to renominate for the position. Additional words are required to have that effect and, applying the usuals canons of construction, there is no warrant to imply or write in additional words that would disqualify an incumbent from nominating and recontesting the position of President after holding it for a term. 36 The Association, in addition to construing the ordinary words used in Clause 23(a), also relied upon the history of the Rule to support the interpretation for which it contended. Initially, some objection was taken to that evidence but, bearing in mind the authorities concerning the proper approach to the interpretation of the rules of registered organisations, the Court allowed that evidence. In the context of interpreting an award, support for that approach is found in the decision of the Full Federal Court in Short v W F Hercus Pty Ltd (1993) 40 FCR 511. The court had before it for interpretation an award clause dealing with an entitlement to severance pay. In the course of dealing with that issue, Burchett J, at 517, stated: The question was raised whether it is legitimate, for the purpose of construing a clause of an award, to look at what was called the history of the provision. In Merchant Service Guild of Australia v Sydney Steam Collier Owners and Coal Stevedores Association (1958 1 FLR 248 at 251, 254 and 256-257), the Commonwealth Industrial Court construed an industrial agreement containing a clause which had appeared in a succession of similar agreements over a period of about 25 years. The clause being perhaps ambiguous, the court relied on its adoption by the parties from the series of prior agreements, under which a particular interpretation had been accepted, as showing its true construction. There was authority to support this approach . . . but as the construction of the clause which appealed to the court had also been acted upon after the parties had entered into the industrial agreement, the court referred to Watcham v Attorney-General of East Africa Protectorate [1919] AC 533, a decision of the Privy Council which is no longer regarded as good law: F L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235. So far as Merchant Service Guild is concerned the conduct after the making of the industrial agreement, was accordingly not followed in Seamens Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444 at 445; but I do not think that decision affects its authority in relation to the use which may be made, in an appropriate circumstance, of the history of a clause found in an industrial agreement. . . . No-one doubts you must read any expression in its context. And if, for example, an expression was first created by a particularly respected draughtsman for the purpose of stating the substance of a suggested term of an award, was then adopted in a number of subsequent clauses of awards dealing with the same general subject, and finally was adopted as a clause dealing with that same general subject in the award to be construed, the circumstances of the origin and use of the clause are plainly relevant to an understanding of what is likely to have been intended by its use. It is in those circumstances that the author of the award has inserted this particular clause into it, and they may fairly be regarded as having shaped his decision to do so. The rules of construction, Mason and Wilson JJ said in Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 320 are really rules of common sense. Common sense would be much offended by a refusal to look at the facts I have summarised. As Isaacs J said in Australian Agricultural Co Ltd v Federated Engine-drivers' and Firemen's Association of Australasia (1913) 17 CLR 261 at 272, citing Lord Halsbury LC: "The time when, and the circumstances under which, an instrument is made, supply the best and surest mode of expounding it". The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the Court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read. . . . Where the circumstances allow the Court to conclude that a clause in an award is the product of the history, out of which it grew to be adopted in its present form, only a kind of wilful judicial blindness could lead the Court to deny itself the light of that history, and to prefer to peer unaided at some obscurity in the language. "Sometimes", McHugh J said in Saraswati v The Queen (1991) 172 CLR 1 at 21, the purpose of legislation "can be discerned only by reference to the history of the legislation and the state of the law when it was enacted". Awards must be in the same position. But even if the language, read alone, appeared pellucidly clear, the tendency of recent decisions - and this is the other answer to the argument put, would seem to require the Court to look at the full context. Only then will all the nuances of the language be perceived. The judgment of Mason J (with which Stephen and Wilson JJ expressed agreement) in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 347-353 contains an extended discussion of the principles upon which a court may take account when construing a contract, of the circumstances surrounding the agreement of the parties upon those particular terms. In the course of that discussion, Mason J suggested (at 350) that "perhaps ... the difference ... is more apparent than real" between the view that evidence is admissible only to resolve an ambiguity, not to raise it, and the view that extrinsic evidence is receivable both to raise and resolve an ambiguity. He concluded (at 352): The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties although ... if the facts are notorious knowledge of them will be presumed. The fact is that words are frequently susceptible of more than one meaning. Paradoxically, ambiguity may be born of the reader's clarity of thought which perceives a potentiality for an alternative meaning. But in many cases only evidence of extrinsic fact can show that the potentiality has substance . ... The principles of statutory interpretation referred to are not inapplicable to an award which seeks, in a way, to legislate for the terms and conditions of employment of a number of persons engaged in a particular industry: cf George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503. Their application to the present problem would require the Court to consider the wider context of the award provision as the product of a series of decisions which might reveal plainly its general purpose and policy. When the decision is read against that background, as I shall show, there can be no doubt that it was not intended to have a restricted meaning, but rather to have a wide operation in cases of redundancy, for whatever reason (at 517-520). That approach was broadly accepted by Drummond J at 523 (see also the statutory developments in s 33 and s 34 of the Interpretation Act 1987) 37 I have already held that Rule 23(a) is capable of more than one meaning and I have construed the Rule in its context applying conventional principles of construction without the aid of extrinsic material. Once regard is had to the history of the Rule, it becomes abundantly clear that the Association has rejected a restriction on the holding of the office of President for one term only and has also rejected a restriction on the holding of the office of President for only one term at a time to allow a country or metropolitan member to hold the office at the conclusion of a two-year term. That is the effect of the amendment proposed by Grafton Council, which was debated and defeated by vote of Conference members. Whether this Rule is looked at simply within the context of its own terms and within the context of the other Rules or whether it is looked at in the context of the history of the Rule, the meaning of the Rule remains the same and is to be construed as contended for by the Association. 38 There are other considerations that support the construction urged by the Association. The 1996 records show that Willoughby Council sought a clarification of the Rule that had been introduced in 1994 with a note from the Council in the following terms: For years the office of President has alternated between city and country councils which was presumed to continue after the introduction of the two-year term of office. This should therefore be detailed within the Constitution to ensure adherence. However, the Executive note submitted to the Conference stated: There has never been a restriction on election of merit of the President, other office bearers or executive members. The Constitution of the Association allows for an incumbent President to be re-elected if he/she maintains the confidence of Conference delegates. When vacating office, the next President comes from the metropolitan area if the incumbent came from the country and vice versa. 39 During the hearing, counsel for the Association was able to confirm on instructions that, prior to the 1994 amendment, there had been informal rotation of the position of President. That informal arrangement did not require a metropolitan president to stand down after a term and be replaced by a country president but allowed an incumbent metropolitan president to nominate again and, if elected, remain in office. Once leaving the office, it was to be occupied by a country member and vice-versa. This is the precisely the way in which the Rule now operates on the Association's contention, with which I concur. 40 There was some questioning of the admissibility and utility of having regard to the notes accompanying the resolutions placed before Annual Conference whereby the Constitution was sought to be amended or clarified. In Roughan v Day and ors (1991) 32 FCR 581, the Full Court held that in interpreting the resolution to alter rules it was permissible to take into account the terms of other resolutions of the Federal Council passed at the same time, citing K & S Lakes City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309. Black CJ stated that the relevant intention to be ascertained was that of the body with the power to alter rules and, in determining the intention of that rule-making body, reference could be made not only to the actual resolution by which the relevant amendments to the rules were sought to be brought about, but also to a closely linked resolution passed at the same time and revealing clearly the problem to which the amendments were directed and, thereby, the intention of the rule-making body. In coming to that conclusion, Black CJ stated: For the purposes of the present case it is not necessary to go further than to accept the submission of the respondents that Resolution 1 may be looked at as showing the "mischief" to which the alteration of the Rules, sought to be affected by Resolution 2, were addressed. In TCN Channel 9 Pty Ltd v Australian Mutual Provident Society (1982) 62 FLR 366 a Full Court of this Court examined Second Reading Speeches of Ministers in the Parliament and the Explanatory Memorandum to a Bill as evidence of the mischief to which the Act in question was directed. There are, of course, very obvious differences between a statute and the rules of a registered organisation, but the underlying basis for the examination of the extrinsic material in TCN Channel 9 (supra) seems to me to justify reference not only to the actual Resolution by which the relevant amendments to the Rules were sought to be brought about but also to a closely linked resolution passed at the same time and reviewing clearly the problem to which the amendments were directed and, thereby, the intention of the rule-making body. 41 To similar effect were the observations of Spender J in Pearce and ors v Vickers and ors (1994) 1 IRC 39 at 43-44: . . . The present application is not to be decided in a factual vacuum. The Rules are meant to have an application in the real world and sufficient evidence as to the context in which the application falls for decision should be before the Court to enable it to give meaningful consideration to the submissions. 42 While it should be noted that his Honour was dealing with an application challenging certain rules of an organisation as being oppressive, unreasonable or unjust, and thus their validity, the statement is consistent with the approach adopted by the Full Court in Roughan. 43 As earlier noted, in 1996, Willoughby Council sought to amend the Rule to confine the office of President to a term of two years at the conclusion of which a person from the other constituency (metropolitan or country as the case may be) would assume office. In the context of what was said in support of that motion and the Executive's note, it is relevant that the motion was withdrawn. Further, evidence before the Court in the current proceedings showed that the statement by Willoughby Council was factually incorrect in that there had not been a rotation every two years or every term between Presidents from the country or from the metropolitan members but that the incumbent President elected in 1990 had been re-elected in 1992 and 1994. That President was re-elected in 1996 after the 1994 rule change and was elected again in 1998 and 2000 when he retired from office in 2002. All of that history is consistent with the construction of the Rule maintained by the applicant and is indicative of the intention of the rule-making body when the original amendment was made to the Rules in 1994. In that context it is also of some significance that no member challenged the operation of Rule 23(a) in the three elections after the Rule was adopted (although amendments and clarification were proposed) and that no member of the Association brings the challenge in the present proceedings. 44 In relation to general principles, I accept the Association's submission that the Rules should be construed with a generous, liberal and non-restrictive approach giving them a sensible meaning without subjecting the wording to over-critical or technical scrutiny. This approach is consistent with the statement of Isaacs J in Amalgamated Society of Engineers v Smith (1912-13) 16 CLR 537 at 559: . . . I am disposed to give a very broad interpretation to the terms of an association in a Society of this nature. I am prepared to read them, not as the strictly prepared and technically framed stipulations inserted in some legal instrument of lawyers, but as the plain and business-like statement of members of the trades concerned, combining for mutual support and settling down the terms of their combination in language which is applicable to their situation and intended (subject to the presumptive intendment of legality) to be understood apart from technical rules of interpretation. 45 That approach had also been adopted in relation to the construction of the eligibility rules of federally registered organisations by the High Court in R v Aird: those cases were adopted by the Commission in Hardacre where the court stated: I would add that the language of the rules of an organisation may also reflect the political and industrial deliberations within the organisation's decision-making bodies so that the rules may derive a variety of processes, sources and contexts within an organisation. In this context, a generous, liberal and non-restrictive approach should be adopted in interpretation of the rules of an industrial organisation . . . While adopting the same approach, a majority of the Federal Court in Australian Electoral Commission v Hickson [1977] 1182 FCA (5 November 1997) held that where the wording of the rules of an organisation allows, such rules are to be construed in favour of eligibility for election to office rather than against it citing re Carter; re Federated Clerks Union of Australia, Victorian Branch (No 1) (1989) 32 IR 1 at 27 per Gray J. I have been guided by these principles in determining the present application. 46 Having reached these conclusions, there are a few additional matters deserving of brief comment. At the outset of proceedings, the Court raised an issue with counsel for the Electoral Commissioner as to whether he was a proper party to the proceedings, having regard to the fact that generally the Returning Officer is bound by the Rules of a registered organisation and that it is usually members of that organisation who have a primary interest in ascertaining the true meaning of the Rules, perhaps with the exception of eligibility rules. A further issue raised was whether, by its conduct over a number of elections, in accepting the Association's construction of Rule 23(a), the Electoral Commissioner was now estopped by that conduct from asserting a different construction of the Rule and conducting the 2006 elections in accordance with that different construction. Having regard to the urgency of these proceedings and the general importance of those issues, it is not necessary to reach a conclusion upon those important matters for the purposes of deciding the present proceedings. The Court accepted the participation of the Electoral Commissioner on the basis, at least, that he participate in the role of amicus curiae providing assistance to the Court in determining the issues before it. It was accepted that the correct title for the Commissioner was 'The Electoral Commissioner for NSW acting as Returning Officer for the 2006 elections in the Local Government Association of NSW". Lastly, notwithstanding the construction that the Court has given to this Rule, it would seem advisable that the Association take steps to put the issue beyond doubt for those who simply read the Rules and to do so at the earliest possible time by proposing an amendment to Rule 23(a) that reflects the wishes of its members. ORDER 47 In accordance with the views expressed above, the Court makes the following order: The Court declares that, in accordance with the proper construction of the Rules of the Association, the incumbent President of the Local Government Association of New South Wales is eligible for nomination and re-election to the office of President at the elections due to be held on 30 October 2006. 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.