Baird, M. v Sharkey, S

[1993] FCA 865

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY	NO V1 56 of 1993
GENERAL DIVISION
B E T W E E N :

MALCOLM BAIRD

Applicant

A N D :

STAN SHARKEY AND OTHERS

m:	NORTHROP J
PLACE :	MELBOURNE
m:	12 NOVEMBER 1993

EX TEMF'ORE REASONS FOR JUDGMENT

This is the return of a rule to show cause granted by th

Court on 3 November 1993. By that rule the applicant, who is a member of the Construction, Forestry and Energy Union, an organisation under the Industrial Relations Act 1988 and which

I shall refer to as "the Union", has obtained an order directed

to the respondents who are the members of the Divisional Executive of the Building Unions Division of the Union, to show cause why an order should not be made that they perform and observe the rules of the Union by treating as null and void, and of no effect, the resolution purportedly carried by a ballot of the Divisional Executive of the Building Union Division of the Union on 29 October 1993 appointing David Pillar, John Loh and John Setka as temporary field advisers working under the direction of the Victorian Divisional Branch of the Building Unions Division. Normally, on the return of such a rule to show

cause, the Court gives directions as to the future conduct of the

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I	matter directing any affidavits to be relied upon by the
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applicant or the respondents to be filed by certain times and giving directions as to the filing and serving of contentions of fact and of law. Compliance with the directions lead to the result that in due course a date is fixed for the hearing and determination of the issues raised by the rule to show cause.
This case is slightly different because at the time the Court made the rule to show cause it granted an interim injunction as follows:

"That until 4.00 pm on 11 November 1993 or until further order the Respondents treat as null and void and of no effect the resolution purportedly carried by a ballot of the Divisional Executive of the Union's Building Unions Division ("the Division") on 29 October 1993 appointing David Pillar, John Loh and John Setka as temporary field advisers working under the direction of the Division's Victorian Divisional Branch."

When the matter came on for hearing yesterday, counsel for
the applicant pursued the claim for interlocutory relief as set

out in the rule to show cause and sought an injunction in a

the rule to show cause, or until further order. Yesterday and	similar form to operate until the hearing and determination of
today the Court heard evidence and submissions relating to the question of interlocutory relief. It is noted that yesterday the Court extended the interim injunction until 4.15 pm today to enable the court to continue its consideration of the matter.
In order to understand the rule nisi, a brief reference needs be made to certain events which are the subject of other

proceedings in this Court in matter No V1 54 of 1993 in which the same applicant obtained a rule to show cause directed to members of the Victorian Divisional Branch Management Committee of the Union in relation to the appointment of the same three persons. That matter has been fixed for hearing on 13 December of this year. There are in existence interlocutory injunctions restraining the respondents to that proceeding from, in fact, carrying out the resolution which is under challenge in those proceedings, by which those respondents appointed those three persons as temporary organisers in the Victorian Branch of the Building Unions Division.

The Court is dealing with an interlocutory application. It has not had the opportunity to investigate the facts and the law fully. Any views expressed, accordingly, are of interim effect only. The Court must act on the position of not being in full command of all the facts and the law applicable. But in order to consider the matter, it is necessary to make some very brief reference to the structure of the Union. There are some unusual

the Union adopts a form of structure which is very common and not	features of the Union, but, in reality, and for present purposes,
at all unusual in relation to organisations registered under the Industrial Relations Act.
The Union itself operates under a number of separate rules. There are what might be described as the National Rules, being exhibit MB1 to the affidavit of Malcolm Baird sworn 1 November 1993 and being the prime affidavit on which the rule nisi was obtained. The National Rules deal essentially with what is

calledthe National Conference, the body dealing with the overall control of the Union, the National Executive and the National Executive Committee, and, essentially, five Divisions of the Union. It is with the Divisional level that the present proceedings are concerned. No reference need be made to the National Rules. The five Divisions, essentially, are groupings based upon a common interest and to a large extent each Division has the hallmarks, or appearance, of an organisation of itself. In one sense it can be said that each Division constitutes an organisation within an organisation. Each Division operates throughout thewhole of Australia, and each Division has Branches throughout the whole of Australia.

Each of the five Divisions has its own separate rules registered under the Industrial Relations Act. The relevant Division, for present purposes, is the Building Unions Division. Its affairs are controlled by rules described as the Building Unions Division Rules. These Rules may well be similar to the Rules of the other four Divisions, but I have not seen those

Rules. The Rules of the Building Unions Division are exhibit MB2

to the affidavit of Malcolm Baird. These Rules have all the hallmarks of a set of rules quite commonly seen in organisations under the Industrial Relations Act.

I do not propose to go through Rules of the Building Unions Division in detail, but it is necessary to make reference to the fact that they make provision for Councils and Executives at a federal level. Essentially these comprise members from all Branches within States and Territories. The Rules make

provisions also for Branches within the Division, and for those Branches to be controlled by Councils and Executives in a form which is very similar to many other organisations. From now on I will be referring to the Building Unions Division Rules which I will refer to as "the Rules". These are the Rules relevant for present purposes.

Rule 8 of the Rules is headed "SUPREME GOVERNING BODY IN DIVISION". Rule 8 constitutes the Divisional Conference as the supreme governing body of the Division. Rule 8(x) confers a number of powers upon the Divisional Conference. These include Rule 8(x)(a) which provides as follows:

"(X) The Divisional Conference shall have power:

(a) To take such steps, subject to the rules of the Union, as it shall think fit to carry out all or any of the objects of the Union as they relate to the Division and to raise or spend such funds as are necessary to carry out the objects."

This is a very, very wide power.	Paragraphs (b) and (g) provide
as follows:

"(b) To decide the general policy of the Division and to

take steps to enforce the carrying out of such policy. ---

(g)	To confirm, over-rule or otherwise deal with decisions of the Divisional Executive or Divisional Branches of this Division."
Paragraph (g) itself is a very wide power.	It is not a very

common one to see in rules of an organisation. No attack is made
on the Rules in these proceedings.

The Divisional Executive is constituted by Rule 9 which is headed "DIVISIONAL EXECUTIVE". This Rule constitutes the Divisional Executive which is the body, the members of which are the respondents to this rule nisi. The powers of the Division

Executive are set out in Rule 9(15).	The introductory words of
Rule 9(15) are as follows:

" (15)	The Divisional Executive shall, have and may
exercise, --- "

I should read this subrule as if the comma did not appear after the word "shall" but should be after the word "have". Thus the introductory words thus read:

"(15)	The Divisional Executive shall have, and may exercise, subject to the review of its actions by Divisional Conference, the care, control, superintendence, management and administration in all respects of the affairs, business, Divisional funds and property of the Division and have and exercise all of the powers of the Divisional Conference, and, without limiting the generality
of the foregoing it may --- "

I will quote some of those specific powers -

"(b) Control and conduct the business and affairs of the

Division. ---

(j) Take such action as may be necessary to secure the satisfactory working of any Divisional Branch of its Division and, subject to Rule 11, suspend or dismiss all or any members holding positions in, or for, a Divisional Branch and the appointment of a member of the Divisional Executive or any other member or members of the Union to conduct the affairs of such Divisional Branch. Provided that an election or appointment shall be held within three (3) months therefrom.

Reasonable notice of the time and place of the meeting shall be given to the Divisional Branch and to all

parties involved, who shall be given an opportunity of
being heard before any action is taken."

It should be noted that in obtaining <he rule nisi and in the original submissions on behalf of the applicant, counsel for the applicant referred to Rule 9 ( 15) ( j ) a5 the source of the power under which the Divisional Executive in this case passed <he resolution the subject of the rule nisi. I will merely indicate here that, in my opinion, Rule 9(15) (j) is not the relevant power for this purposes. It is a power given to the Divisional Executive to, in effect, take over or control the activities of a Divisional Branch, remove people from an office or position in that branch, subject to complying with Rule 11 in relation to elected officers. This proviso is necessary because of the provisions of the Industrial Relations Act. This is a power to enable the carrying on of the activities of the Branch until the committee can be brought back on a proper basis. Rule 9(15)(j) is not a source of power to appoint people in the sense of the present case. That power, if it exists, is the power conferred by the general power contained in Rule 9(15).

The Divisional Branch rules really commence later in the Rules commencing with Rule 28. That Rule constitutes a number of Branches of the Division including the Victoria Branch. Thereafter a number of rules appear which are quite common in relation to branches of an organisation. Reference is made to

Rule 40. Rule 40 is headed "SUPREME GOVERNING BODY - DIVISIONAL BRANCH COUNCIL". Subrule 40(1) reads:

"(1) Subject to these Rules, the highest governing body of the Divisional Branch Council convened by the Divisional Branch Management Committee no less frequently than every two years."

each Divisional Branch, except Queensland, shall be Reference is then made to some other matters, which are not relevant, including how the Branch Council is constituted. Under Rule 40(4) general powers are conferred upon a Divisional Branch Council. Rule 40(4)(a) is set out:

"(4) Divisional Branch Council shall be the highest deliberative body of the Divisional Branch and shall have the power, subject to these Rules, to:

(a) Take such steps as it shall consider necessary to

carry out all or any of the objects of the Union,

and to raise or spend such funds as are necessary to carry out the objects of the Branch and to raise or spend such funds as are necessary to carry out the objects."

This is a very similar power to the general power referred to earlier in these reasons.

Under Rule 40(4)(f), the Divisional Branch Council has the power to fix salaries of all full-time Divisional Branch officers

and allowances and for delegates and matters of that kind. Under Rule 40(4)(r) the Council has the power to decide the number of organisers under provisions of the Rules. Under Rule 40(4)(s),

the Council has power to appoint temporary organisers under the provisions of the Rules. Under Rule 40(4) (t) the Council has power to overrule any decision of the Divisional Branch Management Committee.

The Divisional Branch Management Committee is constituted by Rule 42. For present purposes, the general power of that Committee is conferred by Rule 42(c):

"(c) The Divisional Branch Management Committee shall meet at least once each month and, subject to a review of their actions by the Divisional Branch Council shall have the care, control, superintendence, management and administration in all respects of the affairs, funds and property of the Divisional Branch and shall have all the powers of the Divisional Branch Council including, without limiting, the power, subject to rule 16 hereof, to amend and to add to the rules."

Reference is made here to Rule 42(r):

"(r) The Divisional Branch Management Committee shall have the power to appoint temporary organisers whenever this is considered necessary. They shall not be officers of the branch nor shall they exercise any function of management but shall act as directed by the Divisional Branch Secretary. Such appointments are subject to satisfactory performance of their allocated duties."

Reference should be made also to Rule 48 which deals specifically with organisers and the duties of organisers.	I do
not read the rule but reference is made to it.

It is in the context of these Rules that the Court now turns to consider the facts of this case.

It is not necessary to go into the facts in any great

detail. The affidavit of M r Baird sets out the essential aspects of the facts upon which the claim is based. Following the events already referred by the Divisional Branch Management Committee

and the attack on the resolution of that Committee about the appointment of the three organisers and their suspension from duties because of the effect of the interlocutory injunctions, the National Secretary of the Building Unions Division initiated procedures for the obtaining of a ballot from the Divisional Executive. The text of the letter which initiated this activity is dated 28 October 1993. It was sent by facsimile transmission

to the members of the Divisional Executive.	The letter read as
follows :

"TO: BULIDING UNIONS DIVISIONAL EXECUTIVE MEMBERS (as

addressed)

Dear Comrade :

There has been doubt in some quarters concerning the employment of Dave Pillar, John Loh and John Setka in our Victorian Divisional Branch. To putthis matter beyond any shadow of doubt, please note the attached resolution which you are asked to cast your vote on.

Please return your ballot by facsimile to the Head Office by 12:OO noon Friday 29 October 1993."

The text of the resolution was as follows, that:

David Pillar, John Loh and John Setka as temporary field	"That this Building Unions Divisional Executive appoint
advisers under the direction of our Victorian Divisional Branch on a three month trial basis and this employment be effective immediately."

That resolution was carried, apparently there being one opposition vote recorded. There is no complaint made about the method by which the resolution was passed. The validity of the resolution itself is attacked.

As background information, it is noted that for some years there have been negotiations between the Divisional Conference of the Building Unions Division and the Builders Labourers Federation, "the BLF", an unincorporated association operating in Victoria but as State registered unions in some of the other States, for an amalgamation between the various BLF groups with the Building Unions Division of the Union. These had reached the stage where basic agreement had been reached. Steps leading up to the amalgamation had been taken, including amendment of rules, and various approvals had been obtained. Part of the arrangement between the Building Unions Division and the BLF people was that these three persons, David Pillar, John Loh and John Setka, who were members both of the BLF and of the Union, should be appointed organisers within the Victorian Divisional Branch area and that their salaries in substance would be paid by a mixture

of funds provided by the BLF plus other Divisional Branches

within Australia. These three persons, being members of the Union already, had held membership with BLF. As well, two of them, namely David Pillar and John Loh, had been elected to

membership of the Victorian Divisional Branch Management

Committee and were members of that Committee.

It was pursuant to this policy arrangement by the Building Unions Division itself that the Divisional Branch Management Committee, apparently, had appointed the three persons as organisers and it was pursuant to the same policy arrangement that the Divisional Executive appointed those persons. The National Secretary instituted the processes for the Divisional Executive to resolve to appoint them as temporary field advisers

who for practical purposes, can be treated as temporary organisers in Victoria. That is the resolution which is being challenged.

The argument in support of the validity of the appointment is based upon the powers conferred by Rule 9(15), the general power conferred upon the Divisional Executive to exercise the care, control, superintendence, management and administration in all respects of the affairs, business, division of funds and property of the Division. That is a general power which is exercised by the Divisional Executive helped, if need be, by the powers of the Divisional Conference, which can be exercised by the Executive between the periods when the Divisional Conference is not sitting.

An issue immediately arises as to whether that power is absolute or is to be read down by the powers conferred on the Divisional Branch and the Divisional Branch Management Committee, where a similar express power is conferred to appoint organisers.

The problem of what restriction, if any, is to be imposed on a

body such as the Divisional Executive in exercising powers

conferred upon it in relation to matters which are dealt with also by a Divisional BranchManagement Committee at another level has given rise to many disputes in the past. It is arguable, in my opinion, that the express powers conferred upon the Divisional Branch Management Committee of themselves constitutes an implied prohibition to prevent the Divisional Executive from exercising its powers with respect to the express powers conferred on the Divisional Branch Management Committee in relation to activities

of the Divisional Branch Management Committee. Because of this problem, in my opinion, there is, in this case, a serious issue to be tried as to the proper construction of the powers conferred upon the Divisional Executive in relation to the appointment of organisers, whether called field advisers or not, to operate in a Branch and under the direction of the Divisional Branch.

That is sufficient, in my opinion, to justify the granting of an interlocutory injunction, subject to consideration of what is often described as the balance of convenience. It must be remembered, however, that although, as a matter of practice, a distinction is drawn between the establishment of a serious issue to be tried and the balance of convenience, they are not mutually exclusive. I adopt the approach expressed by the Full Court of the Supreme Court of Victoria in the Maana Allovs and Research Ptv Ltd v Cof fey (1981) VR 23 at 28, where the Full Court quotes with approval the opinion of Lush J in an earlier case. I adopt the same approach here.

In this context, it is important to have regard not only to the existence of a serious issue to be tried but also the strength of that issue. In this case, I cannot express any view as to the strength of the case to be put by the applicant on this issue. It is there. I will not say it is minimal, I will not say it is strong. It is a case which does require further
investigation.	It is in this context that I turn to consider the

balance of convenience.

The main matters relied upon by the applicant for the

continuation of the injunction, pending the hearing and determination of this hearing, is that there is material presented to the Court which shows that the appointment of these three persons who, it is said, have a history of being activists in the BLF and being involved in past practices which, in many respects, is considered to be bad, when the BLF was a force in Victoria. It is said that the appointment of these people to a position where they could go onto sites could lead to problems which would result in injury, damage or concern to the organisation itself. To this extent, much material was put to the Court involving reports of comments made by politicians, employer organisations, other organisations, all being adverse to the Union itself if these people are employed as organisers and threatening all types of other activities which, it is said, could reflect badly on the Union. This evidence was objected to as not being admissible. I do not rule on the admissibility point but, in my opinion, no great weight, if it is admissible, can be placed upon the material.

In actions of this kind it is for the organisation itself to determine what is or is not good for the Union. It is not for the Court to express its view. That point is not disputed. What is said, however, is that if this does go through, if these people do the job of organisers, of necessity, this could result in real damage to the Union and therefore this is a factor which could weigh in favour in the granting of the injunction. There is no direct evidence as to any harm that is likely to arise in relation to the applicant. He is a member of the Union. He is a member of the Divisional Branch Management Committee and, to

that extent, he is affected by all of this, but no more so than any other member. There is no evidence of any direct harm likely to be caused to him.

On the other hand, it is said, and I accept, that these three persons, because of the interim injunction already in existence, are not being employed by the organisation. I accept that at the present time they are not being paid their wages even though the wages are coming from sources other than that of the Divisional Branch Management Committee. Some of those sources are other parts of the Union and, to that extent, this could involve payments which, it was said, would amount to unlawful payments if, in due course, the resolution is held to be bad. Nevertheless, here it is quite clear that the Divisional Executive is carrying out a policy of the Division itself as part of the amalgamation processes between the BLF and the Union. That amalgamation, if anything, is the matter which should be attacked, not the appointment of these persons as part of that arrangement. The policy decision has been made by the

persons is merely an application of part of that arrangement.

appropriate body of the Union. The appointment of the three

The three persons are members of the Union. Two are members of the Divisional Branch Management Committee exercising powers as such officers. No complaint, apparently, can be made about that. In all the circumstances the alleged inconvenience caused to the applicant is very, very minor in my opinion. Trying to treat the apprehended danger to the Union as being inconvenience to the Union is, in my opinion, not appropriate.

I am aware of what was said by the Court in the other proceedings, V1 No 54 of 1933, by the Judge who continued the interlocutory injunction in that matter but, in my opinion, in the exercise of my discretion I do not place much reliance on the material relied upon by the applicant.

Having regard to all these matters, in my opinion this is not a case where an interlocutory injunction should be made restraining the respondents from giving effect to the resolution the subject of this rule to show cause. Accordingly it is ordered that the interim injunction already in existence be discharged and that there be no interlocutory injunction. It remains necessary then to determine what directions should be given in relation to the future conduct of this matter.

I certify that this and the preceding fifteen (15) pages are a true copy of the Ex Tempore Reasons for Judgment of The Honourable Mr Justice R.M. Northrop.

Associate:

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Date: w k /W3

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JUDGES' CHAMBERS
FEDERAL COURT OF AUSTRALW'
450 LITTLE BOURKE STREET

MELBOURNE, 3000

30 November 1993

MS Sonia Cornale
Records Clerk
Library Services
Principal Registry
Federal Court of Australia

Level 16

-Law Courts Building

'. ~ueens Square

SYDNEY NSW 2000

Dear Sonia

Re: Computerised Leqal Information Retrieval Svstem

I enclose the following judgments for inclusion in the data base of Federal Court Judgments:

1.

Autodesk Australia Ptv Limited and Another v Martin No VG 68 of 1989

2.

Pvramid Buildinq Societv (In Liquidation) v Bakqammon No VG 3258 of 1993

3.    Malcolm Baird v Stan Sharkev and Others No V1 56 of 1993

4.	The Jewel Group Ptv Ltd and Others v Farrow Mortqaqe
Services Ptv Ltd (In Liouidation) and Others No VG 3307 of 1993

The word processing disks containing the above judgments are

enclosed.	Please return the disks to me when appropriate.
Thank you

6 HAWORTH

gecretary to

he .ion Mr Justice Northrop

Enc