Bailey v Krantz

[1985] FCA 370

Re: JAMES LESLIE BAILEY
And: HARRY DAVID KRANTZ AND ORS
S.A. No. 1 of 1983
Industrial Law
13 IR 339

COURT

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Gray J.

CATCHWORDS

Industrial law - registered organizations - performance and observance of rules - registration under South Australian law - whether registration of branch or separate association - whether state law can incorporate branch - inconsistency with law of Commonwealth - whether incorporation provisions severable - whether branch defunct - entitlement to funds and property - whether property "vested" in organisation - whether equitable defences available - validation by lapse of time - whether validation leads to "substantial injustice".

Commonwealth of Australia Constitution, s. 109,

Conciliation and Arbitration Act 1904, s. 141, s. 140, s. 133A, s. 171F, s. 171G, s. 132, s. 41, s. 65, s. 66, s. 67, s. 136, s. 158D, s. 139, s. 171C,

Conciliation and Arbitration Act Regulations s. 115, s. 127

Industrial Conciliation and Arbitration Act 1972 (S.A.) s. 5, s. 137, s. 117,

Real Property Act 1886

Industrial Arbitration Act 1912 (S.A.), s. 3

Industrial Arbitration Act Amendment Act 1915 (S.A.) s. 2, s. 8, s. 9, s. 10,

Trade Union Act 1876 (S.A.)

Industrial Code 1920 (S.A.) s. 3,

Industrial Code 1967 (S.A.) s. 5, s. 139, s. 150,

Trade Union Act 1881 (N.S.W.)

Industrial Arbitration Act 1940 (N.S.W.) s. 8,

Trade Union Act 1915 (Qld.)

Industrial Arbitration Act 1916 (Qld)

Associations Incorporation Act 1956-1965 (S.A.),

Judiciary Act 1903, s. 78B,

Real Property Act 1886 (S.A.),

Trustee Act 1936 (S.A.) s. 5,

Federal Court of Australia Act 1976 s. 23

Moore v. Doyle (1969) 15 F.L.R. 59,

Williams v. Hursey (1959) 103 C.L.R. 30,

Allen v. Sideris (1984) 9 I.R. 68,

Steuart v. Oliver (1971) 17 F.L.R. 99,

Allingham v. The Australian Workers' Union (1972) Qd R 218,

Egan v. Harradine (1975) 25 F.L.R. 336,

In Re Wages and Working Conditions of Persons Employed as Clerks

and Clerical Workers and Office Workers (1941) S.A.S.R. 65,

Ryan v. Federated Clerks Union of Australia (South Australian Branch) (1951) S.A.S.R. 249,

Egan v. Shop Distributive and Allied Employees' Federation of Australia, New South Wales (1979) 143 C.L.R. 325.

HEARING

MELBOURNE
#DATE 16:7:1985

ORDER

1. The motions the subject of the Notice of Motion dated 31st January 1985 are dismissed.

2. The motions the subject of the Notice of Motion dated 21st February 1985 are dismissed.

3. Paragraphs (a), (b), (c), (d), (e), (f), (g), and (h) (where second appearing) of the Rule to Show Cause are discharged.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This proceeding was commenced by Rule to Show Cause granted on 23rd March 1983. In substance, the relief sought is pursuant to s. 141 of the Conciliation and Arbitration Act 1904 ("the federal Act"), being orders for the performance and observance of the rules of the Federated Clerks Union of Australia ("the Union"), an organization of employees registered pursuant to the federal Act.

Originally there were two applicants, one of whom was subsequently removed from the proceeding. Mr. H.C. Williams Q.C. appeared at the trial for the remaining applicant, together with Mr. Turner, later Mr. Lindsay, and later still Mr. Jarvis.

The respondents fall into two groups. The first group, for which Mr. Heywood-Smith appeared, consists of members of the Branch Council of the South Australian branch of the Union ("the Branch"), some of whom are also national councillors representing the Branch, as well as national councillors representing the Central and Southern Queensland Branch and the Taxation Officers Branch of the Union. The second group, for whom Dr. Jessup appeared, consisted of the remaining members of the National Council of the Union.

By order made on 23rd July 1984, there were added as parties to the proceeding the Union and an association registered under the Industrial Conciliation and Arbitration Act 1972 (S.A.) ("the state Act"), and known as Federated Clerks' Union of Australia, South Australian Branch ("the South Australian Association"). Dr. Jessup appeared for the Union, and Mr. Heywood-Smith for the South Australian Association.

The trial began on 5th February 1985. Because of the time which had elapsed between the grant of the Rule to Show Cause and the trial, consent orders were made on 21st February 1985, adding as respondents the persons who now hold the offices held by some of the original respondents.

The application concerns land on which is erected a building occupied as to part by the administration of the Branch and the South Australian Association. Pursuant to the Real Property Act 1886 (S.A.), this land is registered in the name "Federated Clerks' Union of Australia South Australian Branch". Also the subject of the proceeding are funds deposited to the credit of the same or a similar name in a credit union in South Australia known as the Satisfac Credit Union. The applicant contends that the land and building and the deposits are the property of the Union, and that the rules of the Union oblige those respondents who are officers of the Branch and members of the Branch Council of the Branch to cause the land and the deposits to be held in the name of the Union.

At the outset of the trial, senior counsel for the applicant told the Court that discussions had occurred between him and Dr. Jessup; the interests of the applicant and the respondents for whom Dr. Jessup appeared were substantially the same, and Mr. Williams was aware of the evidence that Dr. Jessup intended to lead. On Mr. Williams's application, and that of Dr. Jessup, Dr. Jessup was permitted to put his case first. In the result, the applicant did not put forward any evidence, but relied upon that led by Dr. Jessup.

At a late stage of the trial, the possibility emerged that s. 171F of the federal Act might operate to validate relevant decisions of the Branch Council that were more than four years old. In consequence of this possibility, Dr. Jessup's clients filed a notice of motion dated 21st February 1985, seeking an order pursuant to s. 171G of the federal Act. It was necessary for the Court to make an order for the advertisement of this application, and the service of the notice of motion and other documents in the proceeding on the Australia and New Zealand Savings Bank Limited, the mortgagee of the land and building. Argument on this issue took place some weeks after the trial was completed.

There was also a notice of motion, dated 31st January 1985, which was filed on behalf of the applicant. This notice of motion concerned inspection of documents in the possession of the respondents. On the first day of the trial, the applicant's counsel applied to have this notice of motion stood over generally. This application was granted, and the motion for inspection of documents was not pursued further.

A number of issues arose in the course of the proceeding. It is appropriate that the Reasons for Judgment be divided into various sections.
THE FACTS

EARLY HISTORY

On 13th April 1911, the Union became registered as an organization of employees, pursuant to the federal Act. It was so registered under the name "The Federated Clerks' Union of Australia". The original rules which were filed with the application for registration are in evidence before me. They contained provisions governing the banking and expenditure of funds. Rule 34 provided as follows:

"BRANCHES

1. For convenience of members the Union may consist of as many Branches throughout Australia as may be deemed desirable. All branches shall conform to the rules of the Union. Such Branches shall be allowed one representative on the Committee of Management for every fifty members in addition to the number set out in rule 4 but no branch shall be entitled to more than three representatives."

Save for rule 34, the rules made no provision at all with respect to branches. Rule 4 made provision for a committee of management to consist of "a President, two Vice-Presidents, Secretary, Treasurer and six committee men". Various provisions were made for the exercise of powers by general meetings. Apart from rule 34, the original rules of the Union did not bear the character of rules of a federation, especially one having branches in various States of Australia.

Of some interest is a letter from the General Secretary of the Union to "the Commonwealth Industrial Registrar", dated 22nd September 1915, which is in evidence. The letterhead bears the name of the Union, together with a signification of its registration under the federal Act. Printed at the left hand side is the word "Branches", under which are listed the names of five States, including South Australia. The letter informs the Industrial Registrar of a resolution of a "Special Meeting of the Federal Council held in Adelaide, South Australia, on September 7th 1915", concerning proposed alterations to the rules of the Union.

On 8th March 1916, the General Secretary of the Union submitted to the Industrial Registrar a set of rules of the Branch, said to have been adopted on 15th February 1916. Provision was made by these rules for a committee of management and officers. By Rule 3, subject to decisions of general meetings, the committee of management was given "full power to govern the Branch according to the Federal registered Rules and Branch By-Laws." Rule 6 related to the office and duties of the Treasurer of the Branch. It provided among other things "the money shall be deposited in the Commonwealth Bank of Australia in the name of the Branch, within forty-eight hours of receipt of same". Rule 14 provided as follows:

"Funds.

14. The funds of the Branch shall be used in such manner as may be provided by the Rules and By-Laws for the furtherance of any of the objects of the Union or as a General or Special Meeting may determine."

A note at the end of this set of rules describes them as having been adopted at a general meeting on 28th August 1912, and revised and amended by a committee specially appointed to do so at a general meeting on 1st December 1915.

Audited balance sheets and statements of income and expenditure were lodged by the Union with the Industrial Registrar. In respect of the year 1915, these documents showed entries for various branches, including the Branch, under the heading "Affiliation Fees". In respect of the year 1916, there were recorded receipts of "Sustentation Fees" from various branches, including the Branch. There were also recorded amongst expenses of an annual conference, held at Sydney in May 1916, fares for various delegates, including South Australian delegates. A return of officers dated 15 May 1916, and filed with the Industrial Registrar, recorded the election of a Vice-President from South Australia.

On 16th June 1917, the Union filed an application to change its name to "Australian Clerical Association". The application was said to be based on a resolution of the annual conference of the Union between 8th and 14th May 1917. The change sought was registered on 13th August 1917.

There has been tendered in evidence a copy of the rules of the Union as at 21st August 1917, together with certain amendments which operated from 1st April 1918. It is appropriate to set out some provisions of that set of rules:

"3. The objects for which the Association is established are:- (a) To regulate the conditions under which all members or persons entitled to become members of this Association may be employed. (b) To advance and protect the interests of all members and all trade unionists by industrial, political, or any other means. (c) To establish funds for the general conduct of the Association.

. . .

29. The Federal Executive may withhold support from any Branch entering upon any dispute involving the interests of other Branches, without first having obtained the sanction of the Federal Executive.

The Federal Executive may pay the whole or any part of the expenses incurred by or on behalf of any Branch in an appeal to any industrial tribunal.

In the event of any dispute taking place in any State, the Secretary of the Branch thereof shall try by conciliation to settle the dispute. In the event of the Secretary of the Branch not being able to come to a satisfactory arrangement immediately, the Secretary of the said Branch shall report the matter at once to the Branch Executive, whose duty it shall be to report the matter to the Federal Executive who shall take such action as the circumstances require. The action of the Federal Executive shall be binding on all members of the Association in such State.

. . .

32. Any Union situated in a State not already included in the Association, and which is eligible to join, may apply to the Federal Executive to be admitted as a Branch of the Association. Such application shall be in writing, and shall be accomplished by a copy of the resolution of the Union authorising the person making application to do so. Such application shall be dealt with by the Federal Executive.

33. The Association shall consist of members throughout Australia, and may have a Branch in each State. All Branches shall conform to the rules of the Association.

Each Branch shall be called the "Australian Clerical Association, - Branch" (the blank being filled in with the name of the particular place or State in which the Branch exists).

All Branches are pledged to support one another financially when required. Each Branch shall conduct its own election of delegates to Federal Conferences, the result to be in the hands of the General Secretary at least seven days prior to Conferences.

Branches shall have power to make rules from time to time for their own internal management, as they may deem advisable: such rules shall not be contrary to the spirit of these rules."

Various other provisions relating to branches were also present.

Returns of members filed with the Industrial Registrar for the years 1918, 1919, and several years thereafter, consistently showed a substantial number of members of the Union in South Australia.

On 12th May 1924, application was made to change the name of the Union to its present name, Federated Clerks Union of Australia. The application was said to be based upon a resolution of Federal Conference. The change of name was effected on 27th November 1924.

In the meantime, events were occurring in the State of South Australia. The Industrial Arbitration Act 1912 (S.A.) sought to regulate industrial relations at the State level. Provision was made for participation by associations in the system of regulation laid down in the Act. The word "association" was defined in s. 3 of the Act as follows:

""Association" means any trade or other union, or branch of any union, or any association, society, or body composed of or representative of employers or employees, or for furthering or protecting the interests of employers or employees:"

No provision was made by the 1912 Act for the registration of associations.

The Industrial Arbitration Act Amendment Act 1915 (S.A.) introduced a system of registration of associations. Section 2 of that Act provided that it was incorporated with the Industrial Arbitration Act 1912 (S.A.), and that both were to be read as one Act. Section 8 of the 1915 Act made provision for registration of an association, upon compliance with prescribed conditions, and for the issue of a certificate of registration "which shall be conclusive evidence of the fact of such registration and of the validity thereof". Sections 9 and 10 of the Act provided as follows:

"9. Every registered association shall, for the purposes of this Act, and as from the date of registration, be a body corporate by the registered name, having perpetual succession and a common seal, and by that name may sue and be sued for the purposes of this Act.

10. Any branch of an association may be treated as a distinct association for the purposes of this Act, and, with the approval of the Registrar, may be separately registered under this Act: Provided that no branch shall be registered as an association unless, in the opinion of the Registrar, it is a bona fide branch of sufficient importance to be registered separately."

It is common ground between the parties that the records of the Industrial Registrar appointed under the state Act are incomplete. So far as they are available, they have been tendered in evidence. They disclose that, prior to 27th November 1918, application had been made under the 1915 Act for the registration of an association called "Australian Clerical Association South Australian Branch". Registration in this name was effected on 10th January 1919. At the time, there were regulations known as "Rules of Industrial Court 1916", made pursuant to the 1915 Act. Rule 56 of these Rules prescribed the conditions for registration of an association, including the matters for which the rules of an association were required to make provision, the form of application for registration, and the documents which were required to accompany it. Neither the original rules filed, nor any of these other documents is available for inspection. Accordingly, it cannot be determined from such primary documents whether the application purported to be made on behalf of the Branch, or whether action was taken to form a completely separate association. Such copy correspondence from the state Industrial Registrar as is on the file is addressed to "R. Youlton, Esq., Secretary, Australian Clerical Association, S.A. Branch". There is evidence that a person by the name of Youlton was secretary of the Branch prior to this correspondence.

Some attempt was made to establish that a union of clerks existed in South Australia prior to the registration of the Union under the federal Act. Over objections from Dr. Jessup, there were put in evidence extracts from newspaper articles published in 1905, concerning the formation of a clerks' association. Even if admissible, these documents do nothing to establish any connection between any association formed at that time and that which was the subject of registration in South Australia in 1919. Similarly, reference was made to appearances in two cases in the South Australian Industrial Court in 1917 and 1918, reported respectively as The Clerks' Case (1917) 1 S.A.I.R. 284, and The Retail Drapers' Clerks Case (1919) 3 S.A.I.R. 53. In each of these cases, there was an appearance by an association. In the latter case, this was described as "the Australian Clerical Association, South Australian Branch". An examination of the report of each of these cases indicates that the original claims were made by a number of employees as individuals, a procedure still sanctioned by the state Act. The association concerned had intervened in the proceedings to support the claims. If there had been a registered association, it would have been entitled to institute the claim in its own right. The fact that steps were taken to institute, and then to support, a claim by a number of individuals suggests strongly the absence of a registered association. There was some speculation as to whether registration might not have been effected under the Trade Union Act 1876 (S.A.), but it appears that the original register under that Act cannot be found. There is, therefore, no evidence of the previous existence as a separate association, or of the registration, of the body which became registered in South Australia on 10th January 1919.

On 19th March 1925, a few months after the Union had registered its change of name, a change of name was registered in South Australia to "Federated Clerks' Union of Australia, South Australian Branch".

SUBSEQUENT HISTORY

The successive South Australian statutes relating to industrial conciliation and arbitration operated to preserve the registration of associations which had been effected under the 1912 and 1915 Acts. Reference should be made to s. 3 of the Industrial Code 1920 (S.A.), s. 5 of the Industrial Code 1967 (S.A.) and s. 5 of the state Act. The attention of the Court was also drawn to s. 137 of the state Act, which contains more detailed provisions making it clear that an association registered under the 1912 and 1915 Acts, the registration of which has not been cancelled subsequently, is "deemed to be and always to have been validly and effectually so registered" and is a registered association under the state Act. Section 117 of the state Act also deems a certificate of registration of a registered association to be and always to have been conclusive evidence of the fact of such registration and of the validity thereof.

In many cases in which the courts have been called upon to deal with cases of dual registration of industrial bodies, under federal and state law, it has been necessary for the court to piece together the history of operation of such bodies, often from inadequate records. In the present case the Court has been extremely fortunate in having available to it first hand evidence of the operation of the Branch and of the South Australian Association over many years. Mr Harry Krantz was first elected as Secretary of the Branch and the South Australian Association in 1941. Shortly thereafter, he left to serve in the armed forces, but he returned to the position in 1946, and held it until August of 1984. Mr. Leslie Haseldine first became an organizer in 1948, and has held the office of Assistant Secretary of the Branch and of the South Australian Association from 1950 or 1951 until the present time. Each of Mr. Krantz and Mr. Haseldine gave evidence at some length in the proceeding.

Notwithstanding the very great assistance given to the Court by these two witnesses, the very early history of the operation of the Branch and the South Australian Association must necessarily remain obscure. It does appear that, from the earliest times, there were filed with the Industrial Registrar under the federal Act, and with the Industrial Registrar under South Australian legislation, copies of rules which purported to be the rules of the Branch and the rules of the South Australian Association respectively. More will be said about the content of these rules.

For many years, the requirements of the federal rules, the Branch rules, and the rules of the South Australian Association, with respect to admission to membership, have coincided. No particular form of application for membership has been detailed in the rules, the requirement simply being that a prospective member supply such information as to his identity and occupation and such other particulars as to his eligibility for membership as the Branch Executive may require, and fill in and sign such application form "as may be provided". The earliest available form of application for membership in South Australia is one dated 7th February 1968. This form bears the title "Federated Clerks' Union of Australia", and contains the following words:

"I, the undersigned, hereby apply to be admitted as a member of the above Union, and, if accepted, pledge myself to loyally conform to the Rules and By-Laws of the said Union."

There follow spaces for the name and other particulars of the prospective member, as well as spaces for the signature of the prospective member, the signature of a witness and the date. The uncontradicted evidence is that this form of application for membership was used consistently for many years prior to 1968, at least as far back as the early years after World War II. Substantially the same form of application for membership has been in use consistently since 1968. Some minor changes have occurred in the layout of the form, and in more recent times a heading "Application Card" has been added, and the prospective member has been invited to indicate whether dues are to be deducted from his or her pay. In some cases, a reference to a specific section has been inserted beneath the heading in the printed form, eg. "S.A. T.A.B. Off Course Clerk's Association Section". Otherwise, the name of the Union as it appears on the form, and the words of application and pledge have remained the same.

All persons who have applied for membership have, until recently, had their names entered in a single register of members, and have been treated for all purposes as members of both the Union and the South Australian Association. The recent exceptions to this practice are of little relevance. In the first place, as a result of the decision of Evatt J. in Re an Application for an Inquiry into an Election in the Federated Clerks Union of Australia, South Australian Branch (matter S.A. No. 15 of 1981, judgment delivered on 28th June 1983, unreported) it became clear that persons admitted to life membership under rule 7 of the rules of the South Australian Association and the rules of the Branch could not properly be given the right to vote in an election within the Branch or the Union. Since that time, the practice has been adopted of not giving such members a vote. The other instance concerned one Prichard, a former member of the Union, whose name was removed from the register of members pursuant to a power contained in rule 11 of the rules of the Branch. Mr. Prichard subsequently applied to the Court pursuant to s. 144 of the federal Act, and was held to be entitled to membership of the Union under that section. The view has been taken that Mr. Prichard is not a member of the South Australian Association.

For a number of years, the practice has been for each new member, and in some cases prospective members, to be supplied with a pamphlet giving information. These pamphlets did not distinguish between the Branch and the South Australian Association; rather, they spoke consistently of a Union registered under both state and federal legislation. Information was given about the services offered to members by the Union, both directly and through the Branch, and by the South Australian Association.

It has never been the practice to distinguish between the Union and the South Australian Association in charging subscriptions. One subscription was charged to each member, and was treated as entitling that member to any relevant benefits offered by the South Australian Association and the Union. Monies raised from members were generally paid into a bank account. The major account was and is a current account with the Bank of Adelaide Savings Bank Limited and, after September 1980, with its successor, the Australia and New Zealand Savings Bank Limited, at 185 Hutt Street, Adelaide. This account has consistently been titled "Federated Clerks' Union of Australia South Australian Branch". There was, for a number of years, also a savings account with the Bank of Adelaide Savings Bank Limited at 185 Hutt Street, Adelaide, styled "Federated Clerks' Union of Australia - South Australia Branch Premium Interest Account Reserve and Trust Funds".

From these bank accounts liabilities of the Branch and of the South Australian Association were discharged as and when they arose, and other sums were spent, as the Branch Council, administering both the Branch and the South Australian Association, saw fit. A single set of books of account was kept, dealing with all income and expenditure, not distinguishing between that which occurred on behalf of the Branch and that which occurred on behalf of the South Australian Association. From the monies available, what were described as "sustentation fees" were paid regularly to the head office of the Union. These fees were required under the rules of the Union to be calculated on the income of a Branch; the calculation of them was made on the total income of the Branch and the South Australian Association from the one set of subscriptions and other amounts paid by members. From the single set of books of account, there were drawn up periodical statements of income and expenditure, and balance sheets as at various dates. These were the subject of audit. They were filed with the Industrial Registrar under the state Act and previous South Australian Acts, and with the Industrial Registrar under the federal Act, except for the years 1952 to 1961 inclusive, when they do not appear to have been filed with the federal Industrial Registrar at all. The audited balance sheets and statements of income and expenditure for the years 1964 to 1972 inclusive were filed together, accompanied by a statutory declaration of Mr. Krantz dated 13th July 1973. This indicates that there was some failure to file them with the Industrial Registrar under the federal Act during the period 1964 to 1971. Mr. Krantz's evidence was that any failure to file these documents, on time or at all, was the result of neglect, rather than of any conscious decision not to file the documents. In respect of 1962 and 1963, and the years after 1971, the documents appear to have been filed annually. There is no real consistency in the headings which appear on these documents. From 1973 onwards, the documents bore the name of the Union (with no apostrophe), and the words "South Australian Branch" on the next line. From 1968 to 1972, the name of the Union appeared with an apostrophe after the word "Clerks", and with the words "South Australian Branch" in brackets on the next line. Prior to 1968, the name of the Union appeared with an apostrophe, and the words "South Australian Branch" in lower case on the next line. Items of expenditure apparently relating to attendance at meetings of the Federal Council of the Union are found in many of the statements of income and expenditure which were filed. The auditor's report attached to the accounts for 1980 specifically referred to compliance with s. 158AD of the federal Act, a provision relating to the preparation of accounts by registered organizations, which came into operation on 30th December 1980.

The practice as to election of officers has been consistent. At no time have separate elections been held with respect to the Branch and the South Australian Association. Rather, one set of elections has been held on each occasion, for officers and members of a Branch Council. The officers have discharged the duties and obligations falling upon the relevant officers under both the rules of the Branch and the rules of the South Australian Association. They have not made any express distinction between acts done with respect to one or the other. Similarly, one Branch Council has administered the affairs of the Branch and the South Australian Association, without any formal division between those affairs. Elections have also been held, in conjunction with other elections, for persons to represent the Branch on the Federal Council (more recently called the National Council) of the Union. It has been unnecessary for members of the Branch to vote in elections for Federal (later National) officers, as these elections have been by a collegiate process, from the Federal (later National) Council.

In order to comply with the provisions of the federal Act and of the state Act and its predecessors, it was necessary for the rules of the Branch and the South Australian Association respectively to be filed with the respective Industrial Registrars under those Acts. The Branch Council, and the officers in South Australia did make genuine attempts to ensure that the rules of the Branch and the rules of the South Australian Association were in identical terms. In particular, in 1951 and 1952, Mr. Krantz, as Branch secretary, engaged in correspondence with the Industrial Registrar under the Federal Act, for the purpose of ensuring that the Branch Rules were in the same terms as the rules of the South Australian Association. The fact that different requirements were imposed by the federal Act and the state Act and its predecessors, and that different persons were performing the functions under those Acts, inevitably led to some differences between the two sets of rules. A further complication was that, from at least as early as 9th May 1967, under the rules of the Union, a branch was required to submit any alterations in its rules to the Federal (later National) Executive for approval, before those alterations were sent to the Industrial Registrar for certification under s. 139 of the federal Act. The need for such consent invariably resulted in a time lag between the registration of rule amendments under the state Act and their certification under the federal Act.

The position was made even more complex by the fact that some rule amendments which found their way into the rules of the South Australian Association were never certified by the Industrial Registrar under the federal Act. These amendments never became valid parts of the rules of the Branch. The most striking of these amendments were those which related to subscriptions. On 18th April 1961, the Branch rules were amended to fix subscriptions payable by members. The adult male rate was fixed at four pounds a year and rates for other categories were fixed at lesser sums. These amounts were not further amended in the Branch rules until 2nd November 1979, when the adult male rate was raised to $52.00 a year, and the rates for other categories were also raised. In the meantime, the subscription rates for all categories in the rules of the South Australian Association had been increased in a number of stages. The annual rate for an adult male became six pounds on 26th February 1964, $15.00 on 16th December 1968, $18.70 on 24th December 1971, $26.00 on 14th January 1974, $36.40 on 10th January 1975, and $52.00 on 3rd January 1979. The first of these changes was submitted to and approved by the Federal Executive, but not forwarded to the Industrial Registrar for certification pursuant to s. 139(4) of the federal Act; it could not, therefore, operate as part of the Branch rules. The later changes were not approved by the Federal Executive. This situation seems to have resulted from a considerable antagonism, which has existed for some time, between the officers of the Branch and some federal officers of the Union.

The other major area in which the rules of the South Australian Association differed from those of the Branch was with respect to eligibility for membership. The eligibility of persons for membership of the Branch is determined by the rules of the Union. Any alteration to the rules in that respect can only be effective if the Industrial Registrar gives his consent to such alterations, after an application is made in the prescribed form, and the alterations are advertised and objectors given an opportunity to be heard. See s. 139(1) and (2) of the federal Act, and reg. 127 of the Conciliation and Arbitration Regulations. Such an alteration could not be effected without action at the federal level of the Union. An alteration to the conditions of eligibility for membership of the South Australian Association did not depend upon any action at the federal level of the Union. The Branch Council could, and did, submit alterations to the state Industrial Registrar and, after the procedures laid down in the relevant South Australian legislation were carried out, these alterations became registered at the state level. Most of such alterations were prompted by decisions at the state level as to the eligibility of certain classes of persons to belong to the South Australian Association, and by the desire of the officials of the South Australian Association to obtain award coverage for persons who were members but were held to be, or might be held to be, in occupations which fell outside the constitution rule as it then stood. In some cases, classes of employees existed, the members of which had been eligible to belong to the Union and the South Australian Association, but had become, or were thought to have become ineligible by reason of promotion, or changes in the nature of their employment. Their membership continued, but obstacles existed, or were thought to exist, to the obtaining of awards governing their terms and conditions of employment. As a consequence, the South Australian Association changed its constitution rule, in the hope of obtaining award coverage with respect to those persons.

Since 27th November 1924, the constitution rule of the Union has been in the following terms:

"CONSTITUTION

The Union shall consist of all persons male and female engaged in any clerical capacity whatever and also those engaged in the occupation of shorthand writers and typists, or on calculating or other machines designed to perform or assist in performing any clerical work whatever."

As a result of a series of changes registered in South Australia on 1st October 1941, 1st October 1943, 15th December 1959 and 25th May 1965, the constitution rule of the South Australian Association now provides as follows:

"2. CONSTITUTION

The association shall consist of any person male or female

(a) engaged in or about an office. Without limiting the generality of the foregoing shall include:- any person so engaged

(i) in any clerical capacity.

(ii) either wholly or partially in the occupations of shorthand writer, typist, teleprinter operator, addressing machine operator, dictation machine operator, punch card machine operator, cashier, receptioniste, messenger and/or telephonist.

(iii) either wholly or partially in calculating whether by ordinary means, or by means of any machine designed to perform or assist in performing clerical work.

(iv) on invoicing, charging, billing, pricing, scheduling, planning, correspondence, books and accounts, checking or otherwise dealing with records, or in any other clerical capacity whatsoever.

(v) as salesman, tracer, draughtsman, or in any similar technical capacity.

(vi) as secretary, cost accountant, accountant, chief clerk, paymaster, sales manager, purchasing officer, production control officer, pay clerk, costs clerk, purchasing clerk, sales clerk, statistics clerk, foreman's clerk, timekeeper or any similar or other designated clerical position.

(b) engaged outside an office in any clerical capacity or as a meter reader.

(c) engaged as depot superintendent by any Oil Company.

(d) engaged as branch manager, sub-branch manager, auctioneer, wool valuer, wool technician, wool cadet or store manager by any Stock and Station Agent.

(e) engaged as two-way radio operator in connection with a fleet of motor vehicles.

(f) engaged as terminal officers, grain officers, senior inspectors or inspectors employed by South Australian Co-operative Bulk Handling Limited.

(g) engaged in any combination of the above."

During Mr. Krantz's years as Secretary of the Branch and the South Australian Association, rule books were printed for distribution of office representatives, and to members and prospective members who sought copies of the rules. From 1947 onwards, these books have been printed within the office in Adelaide, by means of a duplicating machine. The purpose of this was to enable the regular publication of the rules as amended from time to time. From 1953 until 1979 each of these rule books bore a note to the effect that the book contained the rules registered under the state Act, or the corresponding earlier South Australian legislation. Thereafter the books have been produced to show differences between the rules registered under the state Act and the Branch rules, where such differences exist, and appropriate notes explaining this have been included.

The evidence is that the rules used as "working rules" during the 1950's, 1960's and 1970's were those printed in the rule books, namely those which were registered under South Australian legislation. Those rules were relied on in day-to-day operations. The then current rule book was given to the Commonwealth Bank during the 1960's, when the relevant bank account was kept with that bank. A further copy of the rule book, said to contain all amendments registered with the state Industrial Registrar up to 26th February 1964, was produced from the records of the branch of the A.N.Z. Bank at 185 Hutt Street, Adelaide. It had apparently been deposited with the Bank of Adelaide at that address, at or about the time the bank account was transferred to that bank.

The terms and conditions of employment of some members of the Union in South Australia were governed by awards made under the federal Act, and the terms and conditions of other members were governed by awards and agreements made under the state Act and its preceding legislation. In the witness box, Mr. Krantz estimated that approximately 31 per cent of members in South Australia are subject to federal awards at the present time. This figure was as high as approximately 50 per cent in the mid 1960's, and was around 33 to 35 per cent during the 1970's.

Various matters of fact were put forward by the parties for whom Dr. Jessup and Mr. Heywood-Smith appeared, in order to indicate the dominance in operation of the Branch over the South Australian Association, or the latter over the former.

A letter dated 14th March 1928 to the state Industrial Registrar from the then Branch secretary was on paper bearing a letterhead listing branches of the Union in all other states. A hand-written letter to the state Industrial Registrar dated 7th April 1933, advising a change of registered office, described the change as having been effected by resolution of a general meeting change as having been effected by resolution of a general meeting of "members of the South Australian Branch of the Federated Clerks Union." By letter dated 12th August 1941, Mr. Krantz advised the state Industrial Registrar of his appointment as "Secretary of this Union." The letterhead also listed branches in all other states.

In a letter to the State Secretary of the Australian Railways Union, dated 22nd September 1953, Mr. Krantz relied on limitations in the federal rules as a reason for refusing a plea for a donation towards the expenses of a person who had attended overseas conferences. Mr. Krantz's evidence was to the effect that it was convenient for the South Australian Association to be able to use the federal rules in this way.

Mr. Haseldine gave evidence that the membership application card, which I have described, was treated by the Branch Council and the officers in South Australia as being the card appropriate for joining the South Australian Association.

Prior to 1970, office premises from which the affairs of the Branch and the South Australian Association were conducted were leased. Two leases of such premises are in evidence. The first, dated 22nd October 1941, shows the lessee as "Federated Clerks' Union of Australia S.A. Branch". The second, dated 9th March 1956, is in the name of "Federated Clerks Union of Australia South Australian Branch". Each bears the seal, a description of which appears below.

Although there is no requirement in the rules of the Union, the Branch or the South Australian Association to issue membership cards, it has been the practice in South Australia for a card to be issued to each member as evidence of membership. Two versions of such cards are in evidence. The headings are of some interest. The earlier form of card which was introduced in the 1960's, bore the words "FEDERATED CLERKS' UNION OF AUSTRALIA" in heavy type, with the words "South Australian Branch" in smaller type underneath. The later card, used from about 1980, bore a crest in the shape of a shield, with the initials "F.C.U." and a representation of an ink well and quill pen, superimposed on a map of the Australian continent, beneath the Southern Cross. In it, the heading was altered, so that the words "Federated Clerks' Union of Australia" were no longer wholly capitalized, and appeared in type of the same size as the words "South Australian Branch; a horizontal line was inserted between these two inscriptions. The words "Founded 1905" were added.

One document tendered was a document entitled "Payroll Deductions Remitting Advice", apparently emanating from Ansett Airlines of Australia. It records the payment of contributions by members employed by that airline in Adelaide, by means of deductions from their wages or salaries, in the month ending 30th December 1979. Beside the words "Union or Association" in the form, the words "Federated Clerks Union" have been handwritten. The Union is, and has been for some years, a party to an award made under the federal Act, governing the terms and conditions of employment of certain persons employed by Ansett Airlines of Australia. The official receipt given for the payroll deductions headed "Federated Clerks' Union of Australia" in heavy type, with the words "SOUTH AUSTRALIAN BRANCH" in small type underneath.

The picture which emerged from the evidence was of a group of responsible officers and members of a Branch Council, concerned to meet the needs and desires of their members with respect to their industrial and other relevant interests. They were conscious of the existence of the legal requirements under the federal Act and the State Act and its preceding legislation, and determined to comply with them so far as was reasonably practicable. This is not an unusual picture in cases of this kind. There was no desire to allow the legal strictures imposed by two systems of registration to dominate the affairs in which these persons participated. Rather, it was a case of attending to obligations when the occasion arose, whether those obligations arose by reason of the registration of the Union under the federal Act; or the registration of the South Australian Association. Again, this is not an uncommon feature of the conduct of trade unions in states which offer separate registration under state law. In one respect, however, the present case differs from many other cases. In some cases in the past, it has been found that officials of trade unions conducted their affairs without any inkling that any legal problems at all arose out of dual registration. By contrast, Mr. Krantz was unusually well informed of the potential problems of dual registration. The evidence discloses that Mr. Krantz attended a Federal Conference of the Union at Hobart in 1946. Present was Mr. J.B. Sweeney, who was later leading counsel for the successful respondents in Moore v. Doyle (1969) 15 F.L.R. 59, and later still Mr. Justice J.B. Sweeney of the Australian Industrial Court and of this Court. Mr. Sweeney, as he then was, delivered to the Federal Conference of the Union a report on a meeting of a delegation from the Union with Senator McKenna, concerning a number of aspects of the federal Act. One part of the report is recorded in the minutes of the Federal Conference in the following terms:

"(3) Question touched on to some degree was possible conflict between State and Federal Unions. This was occurring particularly in New South Wales. Instanced argument that N.S.W. Branch registered in State Court as a Union but was also Branch of Federal body. Legal effect of these two registrations appeared to be that they were two entirely separate and distinct bodies at law. In future it might be found that a group would declare they were no longer acting as a branch of the Federation but only as a State union."

The evidence of Mr. Krantz was that, as a result of this report, and discussion on it, he had some awareness of the potential legal difficulties of dual registration. Some of Mr. Krantz's subsequent actions, which are detailed below, show that he, at least, was aware of the possibility that registration under the federal Act and under state legislation might give rise to the existence of two separate legal entities. Notwithstanding this, as the foregoing account of the history of the Branch and the South Australian Association shows, no attempt was made to operate separate bodies. Rather, every attempt seems to have been made to operate as if there were one body only.

On 15th November 1977, at a State Conference, it was moved and seconded:

"that the South Australian Branch of the F.C.U. take legal advice to determine the requirements necessary for the South Australian Branch of the F.C.U. to be free of the encumbrances of the Federal Body and for the South Australian Branch of the F.C.U. to become an independent organization."

The issue was raised by members employed by one of the automobile manufacturers in South Australia. At the State Conference in the following year, on 12th October 1978, Mr. Krantz reported on this issue. He explained that automobile manufacturers' clerks were employed under a federal award, that without the co-operation of employers, it would be difficult to change to a state award, and that, even if this were done, another organization registered under the federal Act had the capacity to enrol clerks in the vehicle industry, and would probably occupy the field. The 1978 conference resolved, on the motion of Mr. Krantz:

"that the report be received and the advice noted and that this matter should not be further considered at this time and that this Conference declares that it hopes that the functioning of the national body of the Clerks' Union will become more representative and responsive to the views of the rank and file members in the various industry sections as expressed by those sections who should have the right of greater participation in the industrial affairs at negotiation and arbitration level, which affect them."

One other matter of general history requires to be mentioned. This was a matter described by Mr. Heywood-Smith as "industrial service fees". In 1968, Mr. Krantz became Federal Secretary of the Trustee Companies Officers Association, an organization of employees registered pursuant to the federal Act. The Branch Council did not desire to lose his services altogether, so entered into an agreement with the Trustee Companies Officers Association, whereby that association contributed half of Mr. Krantz's salary and that of his secretary, and a sum in respect of office rental. This agreement continued to operate until about 1974, when the association began to pay a separate salary to Mr. Krantz, and his salary from the Branch or the South Australian Association was fixed at a correspondingly lower figure. The association was then charged an industrial service fee to cover rent, office equipment and secretarial costs. Mr. Krantz still held office with the Trustee Companies Officers Association at the time of the trial. Beginning in 1970, until about 1975, Mr.Krantz advised the Royal Australian Nursing Federation, South Australian Branch, as to industrial matters. Almost all of this advice was given at meetings held outside Mr. Krantz's normal working hours. Payment was received for his services, which was passed on directly to the Branch or South Australian Association. In about 1973 and 1974, industrial services were offered to the Wool Classers' Association in return for payment. From 1975 until 1984, similar services were performed for, and similar payments made by, the Commercial Travellers' Guild. These payments were intended to cover costs of staff, space and office equipment. Moneys were also received from the Wool Brokers Staffs' Association. Initially, in about 1974, an employee of the Branch or South Australian Association was made available to perform clerical work on behalf of that association. In about 1976, that employee, Mr. Clarke, became secretary of the Wool Brokers Staffs Association, which then became a tenant in the premises occupied by the branch or South Australian Association, and paid rent and monies to cover other services. Finally, in 1984, industrial services were performed for the Australian Social Welfare Union, and payment was received.

INVESTMENT IN LAND AND BUILDINGS

On 22nd June 1970, Mr. Krantz reported to the Branch Executive about an unsuccessful attempt to secure further rented space in a building, part of which was then occupied by the Branch office. Mr. Krantz raised the possibility of purchasing a small building, and referred to a building known as the Newsagents' Association building, which was then on the market. The Branch Executive resolved:

"to report this matter to the Branch Council seeking approval for the Executive to endeavour to negotiate a reasonable price, to seek proper advice on the valuation of any property concerned and to negotiate the availability of finance for such a venture and, if necessary, to take a short term option on any property while the matter was being reported to the Branch Council for its decision."

On the following day, Mr. Krantz reported to the Branch Council upon the desirability of purchasing a building, and the availability and suitability of the Newsagents' Association building. The Branch Council authorized the Branch Executive to make further investigations concerning the purchase of the building and to report back to the Branch Council. On 7th July 1970, a notice went out advertising a conference of "the Union" concerning the purchase of a building. This notice recited that the Executive had secured an option on a small freehold, and contained statements as to its suitability and a comparison of rental costs with the costs of purchase. The Branch Council had inspected the property and recommended its purchase. The Branch Executive had started a building fund with $5,000.00. The conference was convened to deal with all aspects of the proposal. It was intended that the conference would consist of all members of the Branch Council, all members of section committees, all office representatives and former Branch Presidents. The conference was to be held on 14th July 1970. On that day, the conference was held. There were several invited guests present, including Mr. Furphy, the Deputy Industrial Registrar in Adelaide, appointed under the federal Act. The conference resolved in the following terms:

"This Conference authorises the Branch Council to purchase land and buildings for occupancy by the Union, such property to be as described by the title, being the building known as the Newsagents Association Building in Regent Street, Adelaide near the corner of Angas Street, (sic). Thepurchase (sic) price is $29,000 payable on occupancy by the Union approximately the 1st January, 1971.

Conference further determines that a Building Fund Appeal should be established for the purpose of receiving donations and moneys for the purchase of the Building, the Branch Council to commence such Fund with a contribution of $5,000 from Union funds and to make further payments as it is able.

Conference authorises the Branch Council to further provide for the purchase price by establishing a Building Fund payment be(sic) each member of ten cents a month for the period 1st August, 1970 to 31st December, 1971. The payment will become due and payable on the 1st day of each month. The payment will be a levy in accordance with Rule 37 and will therefore be entitled to be claimed by members for income tax purposes.

A Building Fund payment will not be required of part time members covered by clause 12(d)(i).

Building Fund Payments may be paid at the same time and in the same manner as ordinary subscriptions, e.g. by deduction from salary or in any unit of months.

Building Fund Payments shall be transferred to the Building Fund and progress reports of the state of the fund shall be issued to all office representatives and section committees.

The Union is authorised to let any portion of the building for rental."

On 28th July 1970, the Branch Council adopted the conference resolution and resolved to impose the levy set out in the conference resolution. There was a report that the Bank of Adelaide had approved a loan of up to $20,000.00 for the purchase of the Newsagents' Association building. Thereafter, a brochure was prepared relating to a building fund appeal. This brochure contained a copy of the conference resolution and a photograph of the Newsagents' Association building. It set out details of the requirements, price and purchase terms relating to the building. By letter dated 4th August 1970, all office representatives were advised of the conference resolution and the levy for the building fund. This was followed by a circular letter to office representatives dated 10th August 1970, inviting each office representatives dated 10th August 1970, inviting each office representative to distribute a copy of the building fund brochure to each member, and containing more information about procedures for the collection of the levy.

By a contract note, dated 12th August 1970, the Authorized Newsagents' Association of South Australia Limited agreed to sell the Newsagents' Association building. The purchaser was described in the contract note as "the Federated Clerk's Union of Australia - South Australian Branch - registered persuant(sic.) to the South Australian Industrial Code 1967". The purchase price was $29,000.00 a deposit of $1,000.00 being payable on the signing of the contract note. On 1st September 1970, the Branch Council by resolution gave authority to use "the seal" for documents in connection with the purchase of the building. The seal referred to was, and is, circular in design. Around its edge are the words "Federated Clerks' Union of Australia". In the centre appear the words "Seal of South Australian Branch". The rules of the Branch do not make any provision for a seal. The rules of the South Australian Association do.

At a meeting of the Federal Council of the Union on 30th September 1970, discussion occured of the proposal to purchase the Newsagents' Association building. The Federal President of the Union reported, quoting rule 37 of the rules of the Union (which is set out below). Obviously taking the view that the purchase of a building was a disbursement of funds for extraordinary purposes, and that the funds disbursed were those of the Union, the Federal President stated that the requirement of rule 37(3) had been overlooked, and that this went to the contractual capacity of the Branch. He stated his desire to draw the attention of the Branch to these problems and to ask the Branch to take immediate steps to put the full proposal before the Federal Executive or the Federal Council for consideration under rule 37(3). The Federal Council carried a motion bringing the attention of the Branch to rule 37(3), stating that the entry into the contract to purchase the building, and the disbursement of funds by way of deposit were a violation of that rule, and calling on the Branch to take steps to place the full proposal before the Federal Executive or the Federal Council. On 3rd November 1970, the Branch Council considered this resolution. Mr. Krantz referred to the constitution of the South Australian Association and the provisions of the Industrial Code 1967 (South Australia) authorizing a Union registered under that Act to hold property. He stated that he believed that he and the other officers of the Branch had acted entirely correctly and in accordance with the wishes of the members and the law applicable to the South Australian Association. He believed that the matter should be discussed with the Registrar of the state Industrial Court to establish what were the rights of the South Australian Association to purchase a building in accordance with its rules and the Industrial Code 1967 (South Australia). The Branch Council received the report and instructed Mr. Krantz to discuss the position with the state Industrial Registrar. On 1st December 1970, Mr. Krantz reported to the Branch Council that he had had discussions with Mr. Hilton, the state Industrial Registrar, and that his advice was that the decisions to acquire the building were within the competence of the South Australian Association.

On 5th January 1971, Mr. Krantz reported to the Branch Executive that settlement of the purchase should occur before the end of that month. On 11th January 1971, Mr. Krantz forwarded to the Manager of the Bank of Adelaide Savings Bank Limited at its post office branch a copy of s. 139 and s. 150 of the Industrial Code 1967 (South Australia). These provisions related, among other things, to the incorporation of registered associations, their power to make contracts, and their power to purchase and hold real property. The purpose of this was to facilitate the obtaining of a loan for the purchase of the Newsagents' Association building.

"The law with respect to resulting trusts is not in doubt. Where property is transferred by one person into the name of another without consideration, and where a purchaser pays the vendor and directs him to transfer the property into the name of another person without consideration passing from that person, there is a presumption that the transferee holds the property upon trust for the transferor or the purchaser as the case may be."

The judgments of the members of the New Zealand Court of Appeal in Bateman Television Ltd. (in liquidation) v. Bateman (1971) N.Z.L.R. 453, especially the judgment of Turner J. at page 462, also contain a useful exposition of the principle.

The presumption of a resulting trust is clearly capable of being rebutted by evidence of an intention by the Union to benefit the South Australian Association. In the present case, such evidence can be found in the resolutions of the respective Branch Councils, and in the actions of the officers pursuant to them. Those Branch Councils, and those officers were, for practical purposes, acting as the Union. Of course, their decisions and acts were not authorized by the rules of the Union. Had they been valid, or if they are validated, they would, in my view, amount to sufficient evidence of intention to benefit the South Australian Association to rebut the presumption of resulting trust.

An alternative analysis depends upon the law relating to constructive trusts. It was put by Dr. Jessup that the members of the Branch Council and the Branch officers had expended the funds of the Union, wrongfully and without authority under the rules, for the purchase of property which was placed in the name of the South Australian Association. Since they also constituted the Branch Council and were officers of the South Australian Association, the South Australian Association cannot be regarded as having taken that property in the capacity of innocent purchaser, but was a volunteer, with notice of the impropriety. The South Australian Association, so it was said, therefore holds the property as a constructive trustee for the Union. Again, this analysis depends entirely upon the validity, or subsequent validation of the decisions and acts of the members of the Branch Council and the Branch officers.

I have already held that the decisions and acts of the Branch Council and Branch officers were not, at the time when they were made or performed, valid under the rules. They were, however, done in purported reliance upon rule 36(c) of the Branch rules. It is therefore, necessary to see whether they have acquired validity by virtue of lapse of time.

DELAY

The argument concerning laches and acquiesence stemmed from an underlying assumption that what was being sought in this case was equitable relief, or some relief which was akin or analogous to equitable relief. This in turn arose from the fact that much of the argument about the consequences of the use of the name of the South Australian Association turned on points of law relating to resulting and constructive trusts. Mr. Heywood-Smith assumed that it would be necessary for the Court to make at least a declaration as between the Union and the South Australian Association as to ownership of the property. He contended that equitable defences based on delay in applying to the Court, with knowledge of the facts, should bar such relief.

No part of the relief sought in this case is equitable. All that is sought in the Rule to Show Cause is relief of a kind contemplated by s. 141 of the federal Act. Whilst it may be necessary, upon one view of the facts, to investigate equitable concepts, such as resulting and constructive trusts, no orders which depend upon equitable jurisdiction are sought or need to be made. It may be that, under s. 23 of the Federal Court of Australia Act 1976, the Court would have power to grant remedies, including equitable remedies, in aid of other orders made. It must be remembered, however, that the Union and the South Australian Association (if it exists) are only parties by virtue of an order of the Court designed to extend to them a right to be heard when their respective rights to the property the subject of the proceeding were in dispute. See Bailey v. Krantz (1984) 55 A.L.R. 345, especially at pages 354-355. The power to grant a declaration under s. 23 of the Federal Court of Australia Act 1976 is to be exercised sparingly. See McLeish v. Faure (1979) 40 F.L.R. 462. In my view, no occasion arises for its exercise in the present case. If the Applicant is entitled to orders under s. 141, orders can be made. Their effect would be to regularize the positions of the Union and the South Australian Association with respect to the property concerned.

The making of orders under s. 141 is, ultimately, a matter for the discretion of the Court. If the circumstances do not warrant an order, no order need be made. The normal equitable rules as to the refusal of relief do not, however, apply. The considerations which led the Court to refuse relief which would otherwise be justified are more closely connected with the objects of the federal Act and the purposes for which organizations exist than with general considerations of delay or clean hands. The nature of the discretion was examined by the Full Court in Cook v. Crawford (1982) 62 F.L.R. 34, especially at pages 68-69 per Smithers J., 81-82 per Keely J. and 124 per Sheppard J. Having regard to relevant considerations, it can hardly be suggested that the Court should refuse to make orders in the exercise of its discretion in the present case. It can hardly be said to be conducive to the fundamental role of organizations in the system of conciliation and arbitration set up under the federal Act for their property to be capable of being alienated by Branch officials who also happen to be officials of associations registered under state law.

There is, however, one aspect of delay which must be examined.

Section 171F(1) of the federal Act, so far as is relevant, provides as follows:

"171F(1) Subject to this section and to section 171G, upon the expiration of 4 years from -

(a) the doing of an act -

(i) by, or by persons purporting to act as, a collective body of an organization or branch of an organization and purporting to exercise power conferred by or under the rules of the organization or branch; or

(ii) by a person holding or purporting to hold an office or position in an organization or branch and purporting to exercise power conferred by or under the rules of the organization or branch;

. . .

the act . . . shall, for all purposes, be deemed to have been done in compliance with the rules of the organization or branch."

All relevant acts of the Branch Council and officers of the Branch, with respect to the purchase of the land the subject of this proceeding and the construction of the building thereon, were done by those persons in purported exercise of the power conferred by rule 36(c) of the rules of the Branch, relating to investments. All those acts were done more than four years ago, and more than four years prior to the commencement of this proceeding, if that were the relevant date (as to which see Cook v. Crawford (1982) 62 F.L.R. 34, especially at pages 102-105). Those provisions lacked validity because of the effect of rule 37 of the federal rules of the Union. They are, however, now deemed by s. 171F(1) "for all purposes" to have been done in compliance with at least the rules of the Branch. In my view, the effect of this provision is to give to those acts, by virtue of the passage of time, the validity which they did not have at the time when they were carried out. Since the only reason for their invalidity was their failure to comply with the rules, those acts must now be regarded as valid. If the rules had authorized the Branch Council to purchase the property, and to place it in the name of the South Australian Association, no complaint could have been made if that had been done. It must now be assumed, because of s. 171F, that that is what the rules authorized.

I have considered whether, because of the limitations on the extent of rule 36(c) of the Branch rules which arose from the effect of rule 37 of the rules of the Union, it might be said that the Branch Council and the Branch officers were not "purporting to exercise power conferred by or under the rules". It seems to me that, if those words require that an actual power exist under the rules to do an act, before validation can occur, the occasions for the operation of the section will be few, if any. It is true that the section may not operate to validate acts performed without any semblance of authority under the rules, but those which do rest on a purported exercise of power under the rules are intended to be validated. In my view, the section comprehends acts of the kind now under consideration.

Dr. Jessup argued that s. 171F(1) should be read distributively, so that an act done in purported reliance on branch rules would only be deemed to have been done in compliance with branch rules, and an act done in purported reliance on rules of an organization would only be deemed to have been done in compliance with those rules. Because the limitations on the Branch's power arose from the federal rules, he said, to deem the acts of the Branch Council and Branch officers to have been done in compliance with the branch rules left untouched the invalidating effect of the federal rules upon those acts. This argument stems from an altogether too narrow approach to what is intended to be a remedial provision. The act of a branch is the act of the organization, within the area in which the branch operates. See Williams v. Hursey (1959) 103 C.L.R. 30, at pages 81-82 per Fullagar J. In the present case, the relevant power was given by the Branch rules, which were in turn to be read subject to the Federal rules. So read, they did not authorize the acts done. Those acts were, however, done in purported exercise of the power. The acts are, therefore, validated by s. 171F, after the lapse of four years, and they bind the union as a whole.

The same does not apply to periodical payments to the Satisfac Credit Union. Even the earliest decision to apply for membership of that Credit Union, and the application itself, took place less than four years ago. All subsequent payments of monies into the Satisfac Credit Union have also been within the period during which validation would occur. No other provision of Part IXA of the federal Act operates to validate any act with respect to investment in the Satisfac Credit Union. It is true that monies which were paid to the Satisfac Credit Union were, in effect, transferred from a bank account or bank accounts in a name which may be construed as the name of the South Australian Association. I have already pointed out, however, that no act of allocation was involved in the payment of monies into any bank. There is nothing upon which s. 171F could operate in that regard.

The operation of s. 171F of the federal Act is expressed to be subject to s. 171G. Sub-section (1) of that section provides as follows:

"171G(1) Where, upon an application for an order under this section, the Court is satisfied that the application of section 171B or section 171F to an act would do substantial injustice having regard to the interests of the organization, members or creditors of the organization or persons having dealings with the organization, the Court shall, by order, declare accordingly and, where such a declaration is made, section 171B or section 171F, as the case may be, does not apply, and shall be deemed not to have applied, in relation to the act referred to in the declaration."

By notice of motion, filed during the course of the proceeding, Dr. Jessup sought a declaration under this sub-section.

Dr. Jessup argued that a declaration under s. 171G(1) must be made if the Court is satisfied that substantial injustice would be done to any of the four categories of persons mentioned in the sub-section, namely the organization, members of the organization, creditors of the organization or persons having dealings with the organization. His argument was that, if it is found that substantial injustice would result to the Union from the application of s. 171F, the Court should not proceed further to look at the interests of persons in the other categories. Section 171G(1) does not, however, speak of substantial injustice to those categories; it speaks of substantial injustice "having regard to the interests of" those categories. This suggests that the existence of substantial injustice is to be determined by balancing whatever prejudices may have been suffered by persons in each of the four categories. In this regard, the provision is to be distinguished from s. 171C(2)(b), which does speak of substantial injustice "to" persons in any of those four categories. Section 171C borrows much of its terminology from provisions found in legislation relating to companies. In relation to those provisions, the view has been taken that a finding of injustice can only be made after balancing the detriments which have occurred to persons in each of the specified categories, and upon finding a significant balance of detriment to one or more of such persons. It may be that a similar view will be taken as to s. 171C(2)(b). See Plumbers and Gasfitters Employees' Union of Australia and Ors. v. Cook & Ors. (Federal Court of Australia, Evatt J., 15th June 1984, unreported) and the cases there cited. All the stronger reasoning exists for an examination of the whole of the circumstances, in determining whether substantial injustice within the meaning of s. 171G would result. See Rolph v. Transport Workers Union of Australia (Federal Court of Australia, Neaves J., 17th April 1984, unreported) and on appeal (1984) 8 I.R. 145, especially at page 147.

The other important matter to bear in mind is that s. 171G is concerned not with substantial injustice which might be said to flow from the original act validated by s. 171F, but with substantial injustice which might be said to flow from the operation of s. 171F after the lapse of four years. See Rolph v. Transport Workers Union of Australia (1984) 8 I.R. 145, at page 147. The question is not whether substantial injustice flows from the original acts of the Branch Council and Branch officers in purchasing land in the name of the South Australian Association, but whether substantial injustice flows from the validation of those acts after the lapse of four years. The concentration of the Court must be upon the effect of the four year period. If it had been shown that responsible persons at the federal level of the Union were unacquainted with the facts, or that some other good reason existed for their failure to take action, a finding of substantial injustice might be made, in the absence of detriment to other parties outweighing the detriment suffered by the Union. No such case was made out in the present proceeding. In fact, the federal officials of the Union were well acquainted with the true facts surrounding the purchase of the Newsagents' Association building. This was enough to put them on notice with respect to the subsequent purchase of the land on which the present building is constructed. No evidence was led to show any ignorance on the part of federal officials, or any other bar to their pursuing the matter within the four year period. This proceeding itself was not brought by any federal official, but originally by two members of the Branch. The federal officials who were named as respondents then decided to support the application, and eventually, in effect had the conduct of it.

No case, therefore, was made out for saying that substantial injustice results from the application of s. 171F. The result is that the acts of the Branch Council and the Branch officers which resulted in the title to the land being registered in the name of the South Australian Association, or the Branch, are deemed by s. 171F "for all purposes" to have been done in compliance with the rules. This means that no court could now treat those acts as giving rise to any constructive or resulting trust, and as leading to any right on behalf of the Union to make any claim in respect of the land and building against the South Australian Association.

CONCLUSION

I am constrained by s. 171F not to make any orders against any of the respondents with respect to the land and building the subject of this Application. So far as investment in the Satisfac Credit Union is concerned, s. 171F does not apply. Dr. Jessup indicated clearly, however, that his clients did not press for an order with respect to investment in the Satisfac Credit Union. Mr. Williams was content to adopt Dr. Jessup's submissions. This reluctance to press for an order may have resulted from the view that it would be sufficient if the Court indicated to the Branch Council and Branch officers that they had acted otherwise than in accordance with the rules by investing in the Satisfac Credit Union. Alternatively, it might have been thought unjust that an order should be made while investments are held, which order might have the effect of making those the subject of it instant offenders under s. 141(4) of the federal Act. Whatever the reason, the making of an order was not pursued. In those circumstances, there is no reason why the Court should make an order; the Court does not police the conduct of the affairs of organizations; it only acts if invited to do so.

Some of the orders sought in the Rule to Show Cause, which are summarized in Bailey v. Krantz (1984) 55 A.L.R. 345 at page 347, are in general terms, requiring certain of the Respondents to comply with the rules. It is undesirable that orders in these general terms be made; the federal Act does not seek to make failure to comply with rules generally a criminal offence. Orders should only be made with respect to specific occasions of past or likely future non-compliance. See Scott v. Jess (1984) 3 F.C.R. 263, especially at pages 276-278 and 291-292.

The proper course is to discharge so much of the Rule to Show Cause as was not discharged in the order made on 23rd July 1984, and to dismiss the motions referred to in the two Notices of Motion which remain undetermined.