Armstrong v Elliott
[1997] IRCA 241
•7 Aug 1997
DECISION NO:241/97
INDUSTRIAL RELATIONS COURT OF AUSTRALIA
INDUSTRIAL LAW - Performance of rules - power to amend organisation’s rules vested in National Council and also in the Branches - Branches’ power to amend rules related to rules “for its own internal management” - Whether rules concerning timing of Branch elections of a particular branch are rules concerning internal management - Relationship between exercise of power by both National Council and a branch to amend same rules - Whether National Council could modify power of branches to amend rules for internal management.
Workplace Relations Act 1996
Imalach v Daley (1985) 7 FCR 457
JAN ARMSTRONG v ROBERT ELLIOT & ORS
No. VI 1311 of 1997
WILCOX CJ, MOORE, MADGWICK JJ
SYDNEY (heard in Melbourne)
7 AUGUST 1997
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. VI 1311 of 1997
)
VICTORIA DISTRICT REGISTRY )
BETWEEN: Jan Armstrong
Appellant
AND: Robert ELLIOTT, R van AREND, M BARRETT, J BREMNER, L BUTLER, D BYRON, P CLAPHAM, B COFFEY, T CONOULTY,
F CORNFORD, S CRONIN, D DAVIES, D DEWES, KD GEDDES,
H DALTON, K DARVENIZA, T DOLAN, J DRUMMOND, F DYSON,
S EICHENBAUM, P ELLISON, J EVANS, V FAHEY, B GANNINO,
T GARCIA, L GILLETT, G GILLS, B GOULDING, B GUNNING,
M HALL, J HANKINSON, H HARRISON, M HART, R HARVEY,
P HEREWINI, D HILL, H HOPGOOD, P INGWERSEN, J JACKSON,
J JENSZ, J KANARA-HOBSON, E KELLY, J KENNEISON, I KNIGHT,
M MALONEY, W MASSEY, S McCORMACK, W MILES, Z MITCHELL,
J MITCHELL, K MOORE, L MURDOCH, D MURPHY, N MYERS,
J NAVAS, S NOLAN, R O’BRIEN, S POLLARD, J RICHMOND,
G ROGERS, K RYAN, A SHAW, G SHELVERTON, C THOMSON,
M TIMBS, B TOLLEY, T TRACEY, L WALSH, D WHITWORTH,
L WILLIAMS, M WILLIAMSON, A WILSON, B WOODWARD,
C BURNS, C BURNS, R FELTHAM, T HAWKINS, A LILLICRAP,
J MARGAETTS, P MOYLAN, S O’CONNOR, K RUBY, G WEBSTER,
J WILSON, J YAMMOUNI, J MITCHELL and K McINTOSH
Respondents
COURT: Wilcox CJ, Moore, Madgwick JJ
PLACE: Sydney (Heard in Melbourne)
DATE: 7 August 1997
ORDER OF THE COURT
THE COURT ORDERS THAT:
The appeal be allowed.
The preliminary questions be answered are as follows:
1.Do the union’s rules confer on the National Council the power to make the changes which it made by postal ballot notice of which was given on 15 November, 1996 to:
(i)rule 52(e)(i)-(iii); Yes
(ii)rule 52(e)(iv); and/or No
(iii)rule 53(e)(v). No
5.Does rule 47(d) confer on the Victoria No. 1 Branch the power to make the rule changes to rule 52(e) which it made on:
(i)18 November 1996, Yes
(ii)16 January, 1997. Yes
6.If the answers to any part of question 1 and to any part of question 5 are yes, does rule 47(d) confer on the Victoria No. 1 Branch the power validly to make the rule changes to rule 52(e) which it made after certification of the changes referred to in question 1 on:
(i)18 November, 1996;
(ii)16 January, 1997.
It is unnecessary to answer this question
The proceedings be remitted to Gray J for such further hearing and orders as may be appropriate.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. VI 1311 of 1997
)
NEW SOUTH WALES DISTRICT REGISTRY )
ON APPEAL FROM A JUDGE OF THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
BETWEEN: JAN ARMSTRONG
Appellant
AND: ROBERT ELLIOTT, R VAN AREND, M BARRETT, J BREMNER, L BUTLER, D BYRON, P CLAPHAM, B COFFEY, T CONOULTY, F CORNFORD, S CRONIN, D DAVIES, D DEWES, K D GEDDES, H DALTON, K DARVENIZA, T DOLAN, J DRUMMOND, F DYSON, S EICHENBAUM, P ELLISON, J EVANS, V FAHEY, B GANNINO, T GARCIA, L GILLETT, G GILLS, B GOULDING, B GUNNING, M HALL, J HANKINSON, H HARRISON, M HART, R HARVEY, P HEREWINI, D HILL, M HOPGOOD, P INGWERSEN, J JACKSON, J JENSZ, J KANARA-HOBSON, E KELLY, J KENNEISON, I KNIGHT, M MALONEY, W MASSEY, S McCORMACK, W MILES, Z MITCHELL, J MITCHELL, K MOORE, L MURDOCH, D MURPHY, N MYERS, J NAVAS, S NOLAN, R O’BRIEN, S POLLARD, J RICHMOND, G ROGERS, K RYAN, A SHAW, G SHELVERTON, C THOMSON, M TIMBS, B TOLLEY, T TRACEY, L WALSH, D WHITWORTH, L WILLIAMS, M WILLIAMSON, A WILSON, B WOODWARD, C BURNS, C BURNS, R FELTHAM, T HAWKINS, A LILLICRAP, J MARGAETTS, P MOYLAN, S O’CONNOR, K RUBY, G WEBSTER, J WILSON, J YAMMOUNI, J MITCHELL and K McINTOSH
Respondents
CORAM: WILCOX CJ, MOORE and MADGWICK JJ
PLACE: SYDNEY (HEARD IN MELBOURNE)
DATE: 7 AUGUST 1997
REASONS FOR JUDGMENT
WILCOX CJ: I have had the benefit of reading in draft form the reasons for judgment of Moore and Madgwick JJ. Those reasons contain the relevant questions for determination, rules and resolutions. I need not repeat that material.
The present proceedings arose out of an attempt by officers of the Victoria No 1 branch of the union to substitute, for the 1997 elections of officers of that branch, a different timetable to that already provided by the rules. That attempt was frustrated by the union’s national council. By the time the preliminary questions were argued, it was already too late exactly to implement the desired timetable. By the time the appeal was heard, the matter was completely academic so far as 1997 was concerned. Notwithstanding this, the appellant prosecuted her appeal. Presumably she had in mind future elections. As there is a possibility that the same questions will arise in the future, it is appropriate for the Court to consider them and, for that purpose, give leave to appeal.
As my colleagues point out, the critical question is the validity of the resolution of the national council to amend rule 52(e) of the union’s rules by rescinding the old paras (i) and (ii) and inserting new paras (i) to (v) inclusive.
New paras (i) to (iii) specify times and procedures. They apply to all branch elections. Gray J held that, in enacting those paragraphs, the national council did not exceed its powers; the provisions apply to all branches of the union and do not derogate from the power of each individual branch to make a special provision in respect of its own internal management. Although the submission of counsel for the appellant was wide enough to suggest the contrary, that conclusion seems plainly correct. The establishment of a scheme for branch elections is a matter that concerns the whole organisation. All the rules in Part C apply to branches. The Part is entitled “Branch Organisation”; it includes many rules relating to branch management. As Gray J said, in relation to the resolution of the national council, the “only question” is whether, “by adopting paras (iv) and (v), the national council could effectively entrench those provisions against the exercise of the power of branches to make rules for their own internal management”. The answer to that question depends on whether the timing of elections within a particular branch is properly to be categorised as merely a matter of the branch’s internal management.
Gray J held that the timing of the election of a branch’s delegates to national council would not merely be a matter of the branch’s internal management; the national council itself had an interest in the timing of that election. I am inclined to agree with his Honour in relation to that point, but it does not fall for determination in this case. As Moore and Madgwick JJ point out, the resolution purportedly passed by the Special General Meeting of the Victoria No 1 branch on 18 November 1996, and re-affirmed on 16 January 1997, did not relate to national council delegates; it related only to persons involved in branch administration.
Gray J held that, even so, the branch resolution went beyond the conduct by the branch of “its own affairs” (to use the words of rule 44(a)) or the making by a branch of “Rules for its own internal management” (see rule 70(c)). He said members of national council might feel that all elections for branch officers and committee members should be conducted at the same time as elections for national officers “in order to relieve members from being subjected to elections too frequently”. Indeed they might. But I agree with Moore and Madgwick JJ that such a view cannot affect the character of the relevant provisions. Outsiders often have a view about the way others should manage their internal affairs; nonetheless the affairs remain internal.
The problem with the approach of Gray J is pointed up by his following observation:
“It may be that the concept of the internal management of branches has no boundaries which are clearly defined and unchanging. The mere fact that the national council decides to act in respect of some subject may be sufficient to remove that subject from the area of internal management of branches to the field over which the national council is able to exercise power.”
On that view, the restraints imposed on the national council by rule 47(d) and rule 70(c) would become nugatory.
Gray J was conscious of this point. He mentioned these paragraphs, but only as requiring bona fides.
“As is the case with any power of the national council, the power to amend rules must be exercised bona fide and for the purposes for which it is given. Its purported exercise as a cloak for an attack on a particular branch, stemming from an ulterior motive, would not be a proper exercise. An amendment to the rules which applied only to one branch, or to some specified branches, would need careful scrutiny. On the other hand, an amendment to the rules which applies to all branches would itself be a good indication that its subject matter is not limited to the internal management of branches, at least at the point in history at which the amendment is adopted.”
With respect, this is not a sufficient answer to the problem of accommodating rule 47(d) and rule 70(c). A purported exercise of power otherwise than bona fide for the purposes for which it was given would be invalid in any event; provisions like rules 47(d) and 70(c) would not be needed to bring it down. Those rules were intended to apply to an otherwise valid exercise of power.
I think the purpose of rule 47(d) was that stated by Moore and Madgwick JJ: to confer on each branch a power to modify, in relation to that branch, the operation of any particular rule that had general application to all branches. National council could make rules of general application, under rule 21(b), but a particular branch could make a different rule for itself, provided the matter was merely one of its own internal management. To that extent, and for that purpose, it was to be free to add to, amend, rescind or alter the general rule. And rule 70(c) was intended to protect such an internal management rule from derogation by national council. As Gray J put the matter, the national council’s power to alter rules “was restricted to the extent that it could not take away the power of branches to make rules for their own internal management”.
I think it is correct to categorise the new para (xiv) of rule 52(e), adopted by the Victoria No 1 branch on 18 November 1996, and again on 16 January 1997, as relating only to a matter of internal branch management. The frequency and timing of elections of branch officials and branch committees were entirely matters for the branch. They had no effect on the union as a whole or members of other branches. If that is correct, it follows that rule 70(c) rendered the resolution invulnerable to the attack made upon it by the new paras (iv) and (v) of rule 52(e) adopted by national council. Those paragraphs are invalid. The branch’s para (xiv) is valid.
Counsel for the respondent placed emphasis on the decision in Imlach v Daley (1985) 7 FCR 457. He suggested the boundary changes at issue in that case were much more significant to the Tasmania No 1 branch of the union than the timing of branch elections could be to the Victoria No 1 branch; yet, by majority, the Full Federal Court held those changes to be valid. He may be right about comparative significance, but that is not to the point. The fixing of boundaries was not a matter of internal management of a branch; consequently it was within the competence of the national council. That is not so where a subject is a matter of internal management, whether its moment be great or small.
In my opinion, the appeal should be allowed. The preliminary questions, as revised, should be answered in the manner suggested by Moore and Madgwick JJ and the proceedings should be remitted to Gray J for such further hearing and orders as may be appropriate.
I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Wilcox.
Associate:
Dated: 7 AUGUST 1997
APPEARANCES
Counsel for the Applicant: H Borenstein
Solicitor for the Applicant: Holding Redlich
Counsel for the Respondent: R Hinkley
Solicitor for the Respondent: Slater & Gordon
Date of Hearing: 6 May 1997
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. VI 1311 of 1997
)
VICTORIA DISTRICT REGISTRY )
BETWEEN: Jan Armstrong
Appellant
AND: Robert ELLIOTT, R van AREND, M BARRETT, J BREMNER, L BUTLER, D BYRON, P CLAPHAM, B COFFEY, T CONOULTY,
F CORNFORD, S CRONIN, D DAVIES, D DEWES, KD GEDDES,
H DALTON, K DARVENIZA, T DOLAN, J DRUMMOND, F DYSON,
S EICHENBAUM, P ELLISON, J EVANS, V FAHEY, B GANNINO,
T GARCIA, L GILLETT, G GILLS, B GOULDING, B GUNNING,
M HALL, J HANKINSON, H HARRISON, M HART, R HARVEY,
P HEREWINI, D HILL, H HOPGOOD, P INGWERSEN, J JACKSON,
J JENSZ,J KANARA-HOBSON, E KELLY, J KENNEISON, I KNIGHT,
M MALONEY, W MASSEY, S McCORMACK, W MILES, Z MITCHELL,
J MITCHELL, K MOORE, L MURDOCH, D MURPHY, N MYERS,
J NAVAS, S NOLAN, R O’BRIEN, S POLLARD, J RICHMOND,
G ROGERS, K RYAN, A SHAW, G SHELVERTON, C THOMSON,
M TIMBS, B TOLLEY, T TRACEY, L WALSH, D WHITWORTH,
L WILLIAMS, M WILLIAMSON, A WILSON, B WOODWARD,
C BURNS, C BURNS, R FELTHAM, T HAWKINS, A LILLICRAP,
J MARGAETTS, P MOYLAN, S O’CONNOR, K RUBY, G WEBSTER,
J WILSON, J YAMMOUNI, J MITCHELL and K McINTOSH
Respondents
COURT: Wilcox CJ, Moore, Madgwick JJ
PLACE: Sydney (Heard in Melbourne)
DATE: 7 August 1997
Moore and Madgwick JJ
REASONS FOR JUDGMENT
Introduction
This is an appeal against orders of Gray J answering three preliminary questions in proceedings brought under s 209 of what is now entitled the Workplace Relations Act 1996 (Cth) (“the Act”). The questions concern the operation of the rules of the Health Services Union of Australia (“the Union”). The issue raised in the appeal is whether the answers were correct. The questions were answered by reference to assumed facts at first instance and on appeal it was not suggested that this approach was inappropriate.
The orders of Gray J were interlocutory orders and any appeal is by leave. Both the appellant and the respondents were content to have the question of whether leave should be granted determined on the basis that a genuine controversy existed about the operation of the rules and that it might be appropriate for the Full Court to give leave if, in doing so, the controversy could be resolved finally. Counsel for the respondents did not suggest that leave should be refused. In those circumstances leave should be granted.
For the purpose of more clearly identifying the controversy and to make allowances for changed circumstances since the questions were first formulated, it was jointly proposed by counsel for the applicant and the respondents that the questions should be reformulated in the following way:
1.Do the union’s rules confer on the National Council the power to make the changes which it made by postal ballot notice of which was given on 15 November, 1996 to:
(i)rule 52(e)(i)-(iii);
(ii)rule 52(e)(iv); and/or
(iii)rule 53(e)(v).
5.Does rule 47(d) confer on the Victoria No. 1 Branch the power to make the rule changes to rule 52(e) which it made on:
(i)18 November 1996,
(ii)16 January, 1997.
6.If the answers to any part of question 1 and to any part of question 5 are yes, does rule 47(d) confer on the Victoria No. 1 Branch the power after certification of the changes referred to in question 1 to make the rule changes to rule 52(e) which it made on:
(i)18 November, 1996;
(ii)16 January, 1997.
The reformulation of the questions did not alter the legal issues considered by the learned trial judge and raised in the appeal.
Background to appeal
The operation of the rules arose in the context of a desire on the part of Branch Officials of the Victorian No 1 Branch of the Union (“the Branch”) and a General Meeting of the Branch to conduct elections for office holders within the Branch in the months of January, February and March 1997. Certain national officers, and ultimately a majority of the National Council, opposed this course.
The central issue in the appeal is whether the National Council had power to amend the rules of the Union concerning the conduct of Branch elections in three relevant respects. The amendments were to rule 52(e). The first was to perpetuate a provision that branch elections would commence with the calling of nominations on 1 June in an election year. The second was to provide that rules resulting from the amendments would prevail over any other inconsistent rule. The third was to provide that the rules resulting from the amendments could only be amended, rescinded or otherwise altered by the National Council.
At this time, rule 52 relevantly provided:
“BRANCH ELECTIONS
(a) ...(e) Conduct of Elections
(i)Not later than the 1st day of June in the year of an election, the Returning Officer shall call for nominations by advertisement in a daily newspaper circulating throughout the State of Territory in which the branch has members and shall issue nomination forms to all shop stewards and to any financial member requesting the same.
(ii)Nominations shall be in writing, signed by the nominee and the nominator (who shall be a financial member of the branch) and shall be delivered to the Returning Officer at the office of the branch not later than 5 pm on the 1st day of July in the year of the election. A nomination may be withdrawn by a nominee at any time prior to the closing of nominations.
(iii)...
(xiii)...”
This action of the National Council occurred in circumstances where a Special General Meeting of the Branch passed, on 18 November 1996, a resolution that rule 52(e) be amended by adding the following paragraph:
(xiv) Notwithstanding the provisions of rule 52(e), the 1997 elections in the Victoria No. 1 Branch for the offices of Branch President (1), Branch Senior Vice-President (1), Branch Junior Vice-president (1), Branch Trustees (2), Branch Assistant Secretary (1), and Branch Committee of Management (8), to be held in accordance with the following timetable:
nominations to open on 2 January, 1997
nominations to close at 5.00 p.m. on 23 January, 1997
ballot to open on 20 February, 1997
ballot to close at 9.00 a.m. on 13 March, 1997”
The decision of the National Council was made by postal ballot conducted in December 1996. The National Council resolved to amend the rules in the following way:
MOTION
That sub-rules 52(e)(i) and (ii) be rescinded and that the following new sub-rules 52(e)(i),(ii), (iii), (iv) and (v) be made.
(i)The opening date of nominations shall be the 1st day of June in the year of an election and the closing date of nominations shall be the last Friday in June at 5.00 PM.
(ii)Prior to the opening date of nominations the Returning Officer shall call for nominations by advertisement in a daily newspaper circulating throughout the State or Territory in which the branch has members and shall issue nomination forms to all union representatives and sub-branch officials and to any financial member requesting the same.
(iii)Nominations shall be in writing, signed by the nominee and nominator (who shall be a financial member of the branch) and shall be delivered to the Returning Officer at the office of the branch prior to the time of the close of nominations. A nomination may be withdrawn by a nominee at any time prior to the close of nominations.
(iv)Notwithstanding any other provisions of these Rules, sub-rules 52(e)(i), (ii) and (iii) shall apply to all Branch Elections to be held on or after the 1st January 1997 and/or to any step taken on or after that date in relation to a Branch Election and those sub-rules shall prevail over any other Rule (whether made or certified before or after this sub-rule is certified) which is inconsistent with them or any of them.
(v)Notwithstanding the provisions of any of these Rules, sub-rules 52(e)(i),(ii), (iii), (iv) and this sub-rule may be added to, amended, rescinded or otherwise altered only by the National Council in accordance with sub-rule 21(b) and/or sub-rules 70(a) and (b) and only the National Council may make any rule in respect to the subject matter of those sub-rules and this sub-rule.
and that sub-rules 52(e)(iii) to (xiii) be renumbered sub-rules 52(e)(vi) to (xvi) respectively.”
On 16 January 1997 a General Meeting of the Branch passed a resolution that the rules be amended in the terms they had been amended on 18 November 1996 and, in addition, by adding rule 52A in the following terms:
“RULE 52 A. VICTORIA NO 1 BRANCH - TENURE OF OFFICE
(A)THIS RULE APPLIED ONLY TO THE VICTORIA NO 1 BRANCH AND TAKES PRECEDENCE OVER RULE 52(B) AND ANY OTHER RULE INCONSISTENT WITH THIS RULE.
(B)IN THE VICTORIA NO 1 BRANCH ALL OFFICERS AND ALL ORDINARY MEMBERS OF THE BRANCH COMMITTEE OF MANAGEMENT SHALL TAKE OFFICE AT THE TIME OF DECLARATION OF THE BALLOT IN WHICH THEY ARE ELECTED AND SHALL HOLD OFFICE FOR A PERIOD OF 4 YEARS OR UNTIL SUCCESSORS THERETO HAVE BEEN ELECTED AND TAKEN OFFICE.
(C)THIS RULE APPLIES TO ALL ELECTIONS HELD IN THE VICTORIA NO 1 BRANCH COMMENCING ON OR AFTER 1 JANUARY 1997.
(D)THE TERM OF OFFICE OF ALL OFFICERS AND ALL ORDINARY MEMBERS OF THE BRANCH COMMITTEE OF MANAGEMENT WHO HOLD SUCH OFFICES IMMEDIATELY BEFORE 1 JANUARY 1997 SHALL BE SHORTENED TO THE EXTENT NECESSARY TO GIVE EFFECT TO PARTS (B) AND (C) ABOVE.”
None of the purported alterations to the rules made by the Branch have been certified by the Industrial Registrar as provided by s 205 of the Act. The alterations made by the National Council in December 1996 were certified on 31 December 1996, though that certificate was revoked on 21 February 1997. Those alterations were again certified by the Industrial Registrar on 7 May 1997.
The learned trial judge concluded the National Council had the power to amend the rules in the way it had in December 1996 by deleting 52(e)(i) and (ii) and substituting the new 52(e)(i) to (v).
The Power of the National Council
The power of the National Council to amend the rules is dealt with in rule 21 which relevantly provides:
21 - POWERS AND DUTIES OF NATIONAL COUNCIL
The National Council shall, subject to these Rules and the control by the members as hereinafter mentioned, be the supreme governing body of the Union and have the management and control of the affairs of the Union and, without limiting the generality of the foregoing, shall in particular have power:-
(a) ...
(b) to make, add to, amend, rescind and/or otherwise alter these Rules;
(c) ...
(n) ...
All decisions of the National Council shall be final and shall remain in force unless and until varied, amended or rescinded by it or by a plebiscite of members of the Union.
Provided that none of the powers conferred on the National Council by these Rules shall enable the National Council to alter an Entrenched Rule as defined herein.
It can be seen that the power to amend rules in paragraph (b) is, with two qualifications, in terms that indicates it is an unfettered power. The first qualification is that the prefatory words of the rule provide that the power is “subject to these Rules”. The second is the proviso concerning an “Entrenched rule”. The proviso has no application in the present circumstances. Rule 21 is in part B of the rules, “National Organisation”.
Rule 70 also deals with the power of the National Council to amend the rules and relevantly provides:
70 - ALTERATIONS OF RULES
(a)The National Council shall have power to make new rules or to add to, amend, rescind or otherwise alter these rules at a meeting of the National Council or by postal ballot of the members of the National Council conducted pursuant to rule 25 of these rules.
(b)Notice of any proposal for the making of a new Rule or for the adding to, amendment, rescission or other alteration of any of these Rules shall be given in writing to each member of the National Council and to the Secretary of each branch at least one month prior to the relevant meeting of the National Council or to the commencement of the postal ballot (as the case may be) provided that any such proposal may itself be amended when being considered by the relevant meeting.
(c)Nothing contained in this Rule shall derogate from the power conferred by Rule 47 on a branch to make Rules for its own internal management but details of any proposal to make such a Rule shall be contained in the notice calling the special general meeting of members at which the proposal is to be considered.
Rule 70 is in part D of the rules, “General”. Rule 70(c) refers to rule 47. To consider the rule making powers of the National Council it is necessary to consider some of the rules that relate to the branches including rule 47. That rule relevantly provides:
47 - BRANCH MANAGEMENT
(a)The Government, management and the control of the affairs of each branch shall, subject to these rules and any proper direction of the National Council or the National Executive be vested in a Branch Committee.
(b)...
(c)Subject to clause (d) hereof each branch shall be bound by these rules.
(d)Each branch may by special general meeting of its members make rules from time to time for its own internal management and may therefore add to, amend, rescind or alter any of these rules insofar as they relate to the internal management of a branch. The New South Wales Branch Committee of Management shall have the powers vested in it as are outlined in the first sentence of this paragraph.
(e)Any rule or rules made by a branch pursuant to clause (d) of this rule shall be forwarded to the National Secretary who, upon receipt of any information and documentation necessary for the purpose shall forthwith apply to the Industrial registrar for certification of the same and upon certification such rule or rules shall form part of the rules of the Union for all purposes other than Rule 70 but shall apply only to the Branch initiating the same.
(f)...
Rule 47 is in Part C of the rules, “Branch Organisation”. The autonomy of branches is dealt with expressly in rule 44, in Part B, which provides:
44 - RIGHTS OF BRANCHES
(a)All Branches shall be completely and absolutely autonomous within the ambit of these Rules, and shall be responsible for their own Government and administration. The Branch shall be the basic unit of the Union, and shall possess full and adequate powers to conduct its own affairs and to seek its objectives under the Rules. The control of the Branch resides exclusively in the members of the Branch, who shall be bound by these Rules. This Rule can never be altered except by a ballot of all financial members of the Union. Such alteration to be carried must receive a majority vote of two-thirds of the financial members of the Union.
(b)Subject to the Rules, or Federal Policy, nothing shall alienate the right of members assembled in the General Meeting to determine the policy of the Branch. The decision of properly constituted General Meetings shall be binding on all members of the Branch.
(c)Where the National Council is satisfied that a Branch has failed to carry out these Rules of the Rules of the Branch or to comply with the requirements of any Industrial Arbitration Law or of any Industrial Registrar, it shall have power to call a general meeting of financial members of that Branch and to take such steps as may be necessary to enforce due compliance with the Rules and/or the law.
It can be seen that rule 44 can only be amended by a ballot of financial members of the Union.
The first reformulated question concerns the power of the National Council to amend the rules as they relate to elections in branches. As earlier mentioned, the amendments made by the National Council had three features. First, they prescribed the time at which branch elections generally were to be conducted and related procedural matters, (new rule 52(e)(i) to (iii)); second, they gave paramouncy to the rules arising from the amendments (new rule 52(e)(iv)); and third, prevented those rules being amended by a branch (new rule 52 (e)(v)).
Central to the scheme of the rules concerning their amendment, is the question of whether a matter concerns the internal management of a branch. Rule 47(d) confers a power on a branch to make rules relating to “its own internal management” and to add to, amend, rescind or alter the rules “insofar as they relate to internal management.” To understand the operation of the rules in the present circumstances, it is necessary to ascertain whether a rule dealing with the conduct of branch elections relates to the internal management of a branch. A rule of general application concerning the conduct of the elections in all branches, without distinguishing between them, is not, in our opinion, a rule concerning the internal management of a particular branch. Support for this view is found in the history of the rules which we discuss shortly. Rather it is a rule dealing with elections within the Union and, in particular, dealing with one class of elections, namely branch elections.
Different considerations may arise, however, in relation to a rule that deals only with elections within a particular branch. Gray J concluded that the timing of elections in a branch was not a matter relating to the internal management of the branch at least for the purposes of the operation of rule 47(d). It was for this reason that his Honour concluded that the Branch did not have power to amend rule 52 in the way it purported to do and there was no relevant fetter on the power of the National Council to make the amendments it did.
His Honour accepted that the timing of elections in a branch was a matter relevant to the management of that branch but concluded it did not “relate to internal management” for the purposes of r 47(d) for two principal reasons. His Honour approached the matter by considering whether the timing of branch elections is inherently and exclusively a matter for the internal management of the branch. His Honour pointed out that the election of delegates to National Council can be viewed as a matter transcending the interests of the branch. His Honour also pointed out that the timing of elections for branch officers and branch committee members could be seen as a matter of legitimate interest on a basis wider than an individual branch. He referred to the interest the National Council may have in ensuring elections for branch officers and national officials are conducted at the same time.
In our opinion, the timing of the elections for the branch officers and the branch committee of management of a particular branch is a matter concerning the internal management of that branch. Those office holders are elected by the members of the branch to govern the branch in the manner provided for by the rules. The powers they derive from the rules are exerciseable in relation to the management of the branch. The frequency with which they are elected and the time they are elected are, subject to constraints imposed by the Act, matters internal to the management of the branch.
We accept, as Gray J points out, that the National Council may have a legitimate interest in relieving the members of the burdens arising from elections for branch offices and elections for national officers that are not coordinated or indeed simultaneous. However the existence of that interest does not alter the character of the branch elections or their timing.
The National Council may have a legitimate interest in a range of matters such as the frequency with which branch general meetings are held or the number of members of the branch that can requisition a special general meeting. Both matters are dealt with in rule 61 which is a rule of general application to all branches found in Part C. The National Council may view a particular frequency or number of members as oppressively short or high or inappropriately long or low. However both matters are singularly matters concerning the internal management of any particular branch and the existence of a legitimate interest on the part of the National Council does not deny them this characteristic.
Indeed, rule 47(d) confers not only a power to make rules, but a power to add, alter or rescind existing rules. That is, the rules which, apart from special transitional rules in Part C, are, in that Part, rules of general application which deal with a range of matters concerning branches generally. They include the composition of branch committees, their powers, when and how they meet, the number and powers of branch office holders, how branch funds are held, expended and accounted for, how and when branch meetings are held and conducted and how plebiscites are conducted.
The power conferred by rule 47(d) was intended to be a power to modify, in relation to a particular branch, the operation of rules of general application to all branches. That could be done by amending the text of the rules in Part C of the type I have just discussed. It could also be done by making a rule of specific application which would operate to the exclusion of the rule of general application. The conferral of a power to alter, add to, or rescind the existing rules indicates, in the context of the existing rules as whole, an intention to confer a power to modify rules in Part C even though they deal with a matter with which the National Council may be legitimately interested. Indeed that interest may, as I shortly discuss, be manifest by an amendment to a rule of general application to all branches. However the existence of this interest does not result in the matter dealt with by the rule of general application, being a matter which does not concern the internal management of a branch in so far as it concerns one branch only.
In our opinion, the timing of the elections for branch officers and the branch committee of management of a particular branch is a matter concerning the internal management of that branch. Different considerations may well arise in relation to Branch delegates to National Council but, for reasons which emerge shortly, that is not a critical issue.
We now turn to consider directly the powers of the National Council to amend the rules. In terms, and subject to what may be the effect of rule 44, the proviso in rule 21 and rule 70, the National Council has a general power, derived from rule 21, to amend any rule and that would include rule 52. The proviso, which I earlier referred to, does not apply to rule 52.
The submission of the appellant that rule 21 did not confer power to amend rule 52 in the way decided upon by National Council, was based on the contention that rule 44 was intended to preserve branch autonomy. Support for this view is found in the dissenting judgment of Beaumont J in Imlach v Daley (1985) 7 FCR 457. That rule 44 preserves branch autonomy is clear from its terms and we accept that the conduct of Branch elections concerns “the Government and administration of a Branch”.
However, as just discussed, rules of general application to all branches, in our opinion, concern only indirectly the government and administration of a particular branch. There is no warrant for reading down rule 21(b) so as to limit the power of the National Council to amend rules of general application to branches if they concern the government and administration of all branches. In our opinion, the National Council had the power to amend rule 52(e) by rescinding the preexisting paragraphs (i) and (ii) and substituting the new paragraphs (i), (ii) and (iii).
Different considerations arise in relation to the new paragraphs (iv) and (v). The issue then is whether the National Council can fetter the power of a branch to make a rule concerning its internal management or render paramount a rule of general application to branches even if a branch has validly exercised the power to make a rule relating to that branch. This question involves a consideration of the relationship between the power conferred on the National Council by rule 21(b) and on a branch by rule 47(b). Gray J took the view that a limit was placed by rule 70(c) on the power of the National Council to alter rules.
In relation to the opening words of rule 70(c), the learned trial judge said:
“I do not think this argument is altogether correct. Rule 70(c) being ambiguous, it is appropriate to have regard to its history. As I have said, the previous form of the rule regulating the rule-making power of the national council was different. It was expressly made subject to the branch autonomy rule and to the rule which gave branches power to make rules for their own internal management. In the 1991 alterations, these express qualifications were removed. In my view, the opening words of the new subr. (c) were designed to show that the national council’s power to alter rules was restricted to the extent that it could not take away the power of branches to make rules for their own internal management. Otherwise, those words would have performed no function. It was obvious from the fact that r. 47(d) remained in the rules that the amendments to r. 70 were not removing it. Indeed, the balance of the new subr. (c) made it abundantly clear that that power continued to exist. The opening words must therefore have been intended to curtail the national council’s rule-making power in the manner which I have suggested.
I am therefore of the view that the national council did not have the power to remove from branches any part of their power to make rules for their own internal management.”
We agree with that conclusion though it is fortified by a review of the earlier history of the Union. We believe that his Honour’s reference to 1991 should be to 1985.
We start in 1941 as the status of documents in evidence for earlier years is, in some respects, obscure. In 1941 what was then the Federal Council had a power to amend the rules of the Union. The rules then were in two parts, the federal rules and the branch rules. Rule 32(j) of the federal rules conferred a power on a branch to make rules provided they were in conformity with the federal rules. Rule 57 of the standard branch rules conferred a power on the members of a branch to alter “its rules” provided they were “in accord” with the federal rules and were approved by Federal Council. Rule 32(j), in the terms just mentioned, did not appear in the rules in 1943 though rule 57 did. In 1951 there was no equivalent of either rule 32(j) or rule 57 in the rules.
In 1959 the rules underwent significant change though the rules remained divided into two parts, federal rules and branch rules. Rules 34 and 36 appeared in the former part. Rule 34 authorised a branch to “adopt rules suitable to the particular Branch” though this was subject to the approval of the Federal Council. Rule 36 provided for the autonomy of a branch using language similar to that found in the present rule 44. The branch rules, as had been the case since at least 1941, dealt with matters relating to the government of a branch including elections.
In 1963, rule 34 of the federal rules was amended to confer upon branches a power “to make Rules from time to time for its own internal management, and may therefore add to, rescind or alter any of the Branch Rules (or part thereof) forming part of these Rules”. The rule obliged the Federal Secretary to submit any change made by a branch for registration under the Commonwealth Act. The exercise of this power was not subject to approval by the Federal Council. At this point the Union adopted a rule which was intended to confer an unfettered power on a branch to make rules applying to it and any changes had to be registered. It is of some significance that the power to make rules for its internal management “therefore” enabled a branch to amend the branch rules which included rules concerning branch elections. This supports the view we earlier expressed about the meaning of the expression “internal management” in the context of the rules in their present form. These changes were consistent with the adoption in 1959 of the provisions relating to branch autonomy. By conferring an unfettered power but limiting its exercise to matters of internal management, the Union was intending to secure that autonomy. The direction of these changes was confirmed in January 1977 when the power of the National Council to alter the rules conferred by rule 31, was made subject to rule 36 and also, in November 1997, subject to rule 35(a) as well. It appears from the rules in the form they were in in 1979, that rule 35(a) was in similar terms to the present 44(a) and rule 36 was in broadly similar terms to the present rule 47(d).
Counsel for the respondents submitted that the subjection of rule 31 to rule 35(a) was to further ensure that the power conferred by rule 31 could not be exercised to amend rule 35(a) and the subjection of rule 31 to rule 36 served to ensure that Branches were not deprived of power to alter rules under rule 36 merely because rule 31 vested such a power in the National Council. We accept that this construction of the rules is an arguable one. However having regard to the earlier history which we have just discussed, the words of qualification in rule 31 served, in our opinion, a more fundamental purpose. They were intended to ensure that the autonomy of a branch was effective and that rules adopted by a branch for its internal management were not able to be altered by the National Council in exercise of the power conferred by rule 31.
In 1985 the structure of the rules changed. No longer were there federal rules and branch rules. The rules were, in 1985, divided into four parts (as they now are), with Part B dealing with the National organisation, Part C with Branch organisation and Part D with General organisation. It is in this structure that rules 21(b), 44, 47 and 70 as earlier discussed first emerge though, in relation to rule 70, not in precisely the same terms. Rule 70 in its present terms came about by an amendment made in 1991. In our opinion the restructuring of the rules was not intended to alter the nature of the power that had earlier been conferred on branches by rule 34. That is, a branch continued to have an unfettered power to amend rules relating to its internal management. Rules of that character are probably all the rules in Part C which, in substance, reflected what was earlier found in the section of the rules described as branch rules.
Gray J’s conclusion that the National Council did not have power to remove from branches any part of their power to make rules for their internal management is also supported by the terms of rule 47(e), though this provision was not relied on by his Honour. It provides that the rules made by a branch in exercise of the power conferred by rule 47(d) form part of the rules of the Union “for all purposes other than rule 70”. While rule 70 has features that suggest it is concerned only with the machinery of amending the rules, it does, in terms, purport to confer a power on the National Council to add to, amend or rescind the rules: see rule 70(a). That rule 70(a) confers a power is consistent with the opening words of rule 70(c) which states that nothing in the rule, viz rule 70, derogates from the power of a branch to alter rules. If rule 70 did not confer a power then no question could arise about the impact of the rule on a similar power reposed in another body. The better view is that rule 21(b) and rule 70(a) confer a power to amend the rules. In our opinion, the purpose of the qualification in rule 47(e) that a rule made by a branch is a rule for “all purposes other than rule 70” is to ensure that the power conferred on the National Council by rule 70(a) cannot be exercised to alter, amend or rescind a rule made by a branch pursuant to rule 47(d). While rule 47(e) does not refer to rule 21(b) the qualification it places on the power conferred by rule 70(a) is effective only if rule 21(b) is construed as being qualified in the same way.
For the reasons given by Gray J and the preceding additional reasons, National Council did not, in our opinion, have the power to make the amendments to rule 52(e) introducing the new paragraphs (iv) and (v).
It also follows that the Branch had power to make the new rule 52(e)(xiv). It is to be remembered that rule 52(e)(xiv) concerned office holders in the Branch but did not include delegates to National Council. Accordingly it is unnecessary to resolve the question of whether the conduct of an election for the position of delegate is one relating to the internal management of the Branch. The reformulated questions should be answered:
Question 1: (i) yes
(ii) no
(iii) no
Question 5: (i) yes
(ii) yes
Question 6: It is unnecessary to answer this question.
I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore and Justice Madgwick.
Associate:
Dated: 7 August 1997
Counsel for the Applicant: Mr H Borenstein
Solicitor for the Applicant: Holding Redlich
Counsel for the Respondent: Mr R Hinkley
Solicitor for the Respondent: Slater & Gordon
Date of Hearing: 6 May 1997
0