Buchanek, J. v Jones, I
[1989] FCA 777
•01 NOVEMBER 1989
Re: JOHN BUCHANEK
And: IAN JONES; STEPHANIE BAILLIE; HERBERT MUENCH; MICHAEL McCORMACK; BERNARD
COMMANDEUR; SHAUN CAREY; NOEL LONG; LUCA PICCI; DESI MARTIN; DOUGLAS HARDIE;
GEORGE BOBANOVIC; DAOUD ADAM; SPIRO LOUCANARIS; GARY GARY SHERRIFF and PETER
HEAPHY
No. V I 52 of 1989
FED No. 777
Industrial Law
34 IR 102
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Gray J.(1)
CATCHWORDS
Industrial Law - registered organisation - rules - performance and observance - branch elections - use of union resources to distribute material favouring incumbents - publication and distribution of leaflet - use of organisers' time and vehicle to distribute campaign literature - interim relief effectively final relief - inappropriateness of "serious question to be tried" and "balance of convenience" for "interim orders" - whether members of branch committee of management proper respondents.
Words and phrases - "interim orders".
Industrial Relations Act 1988 s. 209.
HEARING
MELBOURNE
#DATE 1:11:1989
Counsel for the applicant: Mr. S. Marshall
Solicitors for the applicant: Maurice Blackburn & Co.
Counsel for the respondents: Mr. K. Bell
Solicitors for the respondents: Slater & Gordon.
JUDGE1
On 27th October 1989, Ryan J. granted a rule, calling upon the respondents to show cause why certain orders should not be made against them. The application is made pursuant to s.209 of the Industrial Relations Act 1988 ("the Act"). The orders sought are as follows:
"1. That the respondents and each of them perform and observe the Rules of the Vehicle Builders Employees' Federation of Australia ("the Union") and the Victorian Branch of the Union ("the Branch") by refraining by themselves, their servants and agents, from using the property, resources, machinery or staff of the Union or the Branch to:
(a) support or promote certain candidates in the current election being conducted within the Branch;
(b) influence voters to support certain candidates in the current election being conducted within the Branch to the exclusion of other candidates.
2. That the Respondents and each of them perform and observe the Rules of the Union and the Branch by directing officers and employees of the Branch to refrain from using the property, resources, machinery or staff of the Union or the Branch to:
(a) support or promote certain candidates in the current election being conducted within the Branch;
(b) influence voters to support certain candidates in the current election being conducted within the Branch to the exclusion of other candidates."
Ryan J. made the rule to show cause returnable today for directions and made orders as to service and abridgement of time. He also made two interim orders as follows:
"1. That until 4.15 p.m. on 1st November 1989 or further Order the respondents, Jones, Baillie, Meunch and Heaphy, and each of them refrain during his or her normal working hours from distributing electioneering material, referrable to the current election within the branch and from otherwise urging or seeking to persuade any member of the Union to vote for or against any candidate in the said election.
2. That until 4.15 p.m. on 1st November 1989 or further order the Respondents and each of them refrain from using the property, resources, machinery or staff of the Union to support, promote or defeat candidates or influence voters in the said election, and without limiting the generality of the foregoing from distributing or otherwise publishing any leaflet in the form of the schedule to this Order."
Annexed to the order was a schedule, being a copy of a leaflet to which further reference will be made.
Section 209 of the Act provides, so far as is relevant:
"209(1) A member of an organisation may apply to the Court for an order under this section in relation to the organisation.
...
(3) The Court may refuse to deal with an application for an order under this section unless it is satisfied that the applicant has taken all reasonable steps to try to have the matter the subject of the application resolved within the organisation.
(4) At any time after the making of an application for an order under this section, the Court may make such interim orders as it considers appropriate, and, in particular, orders intended to further the resolution within the organisation concerned of the matter the subject of the application. ...
(9) In this section: ...
"order under this section" means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules."
On the return of the rule to show cause today, Mr. Marshall of counsel appeared for the applicant and Mr. Bell of counsel appeared for all of the respondents. Mr. Marshall sought the continuation of the interim orders until the hearing and determination of the proceeding or further order. Mr. Bell opposed the extension of the interim orders and made alternative submissions as to the form of those orders.
The Vehicle Builders Employees Federation of Australia ("the Federation"), is an organisation of employees registered under the Act. The applicant is a member of the Federation. The respondents all hold office in the Victorian branch of the Federation and together constitute the committee of management of that branch. They are therefore persons under an obligation to perform or observe the rules of the Federation. The respondent Jones is the acting general secretary/treasurer of the branch, the respondent Baillie is an organiser, the respondent Meunch is an organiser and the vice-president, and the respondent Heaphy is an organiser.
Elections are in progress for the offices of general secretary/treasurer, organiser and organiser/administrator in the branch. Nominations were called on 27th September and closed on 18th October. Two candidates were nominated for each position. A ballot is due to open on 16th November and to close at 9.00 a.m. on 7th December 1989.
This timetable exposes a problem which besets applications of this kind. The orders sought, if granted, would apply only to the period during which the elections are being conducted. There is no real chance of a final hearing taking place, much less of a final determination of the proceeding, before 7th December when the ballot closes. This conclusion is reinforced by the proposals of the parties as to a timetable for the filing of further affidavits, which would require at least four weeks to elapse before the interlocutory steps were completed. In effect the grant of further interim orders today will give the applicant final relief. It is unlikely that the question of his entitlement to true final relief will ever be decided. A final hearing after 7th December would not seem to be a sensible use of the Court's time, or of the money of the parties, or perhaps the taxpayer. For this reason it seems to me that the Court should scrutinise very carefully the application for interim orders.
There has been a tendency to assimilate the tests of "serious question to be tried" and "balance of convenience", sometimes used in deciding whether interlocutory injunctions should be granted, into the process of deciding whether interim orders should be granted under various provisions of the Act and similar preceding legislation. This tendency ignores the apparently deliberate choice by Parliament of the phrase "interim orders" in provisions such as s.209(4), instead of the word "injunction" which appears in other legislation. I have expressed myself previously about the inappropriateness of formulations directed towards the granting or refusing of traditional equitable remedies for orders of a wholly different kind. See Lewis v. Maynes (unreported 19th August 1988 at pp 6-7).
It seems to me that the present case is one in which the mere establishment of a serious question to be tried or the mere balance of convenience ought not to lead to an interim order. The respondents have had little opportunity to bring forward evidence. They are faced with evidence which is, to a large extent hearsay. Although admisible on an interlocutory application, this evidence should be scrutinised, to ensure that what is effectively final relief is not granted on too slight an occasion.
The application is founded on three incidents. The first occurred on 9th October 1989 at the Holden's Engine Company plant at Port Melbourne. A meeting of some kind was held there and finished between 3.00 and 4.00 p.m. The respondent Meunch then invited the shop stewards in attendance at the meeting to go to his car, which was believed to be a car owned by the Federation. He opened the boot of the car and took out some election stickers. Those stickers contain the words, "Vehicle Builders Union Elections - Vote", and then a cross appears in a square, "I. Jones And The New Direction Team. Don't Let The Union Fall Back Into The Hands Of The Bosses."
The second incident is alleged to have occurred during normal working hours, on or before 11th October. The respondent Baillie then attended at the Toyota plant at Altona, gave the senior shop steward at that plant some electioneering stickers and asked him to distribute them. There is no evidence as to the text of those electioneering stickers. These two incidents are said to lead to the conclusion that the two organisers named were performing electioneering activities in the course of their employment by the Federation in its Victorian branch. They are the foundation for the application for the first of the interim orders.
The third incident involved the distribution of a leaflet at the Holden's Engine Company plant. This is the document which forms the schedule to the order of Ryan J. The best evidence as to the time of its distribution was that the applicant obtained a copy of it on 19th October 1989 and he is an employee of Holden's Engine Company at its plant at Fishermen's Bend. The leaflet bears what appears to be a letterhead of the Federation and a title, "News", in a rectangle, which appears to be partially coloured. There then appears a bold headline "Union Elections", and in bold type underneath, "Why Haven't Holden Workers Got Wage Increases?" The text of the pamphlet is as follows:
"The Union has put a proposal to all Holden workers that gives no trade offs and offers large wage increases.
Members shouldn't be fooled by others who are seeking to delay your wage increases merely to advance themselves in the forthcoming elections.
Do not listen the to (sic.) loudmouths who have NO genuine concern for workers - they are merely playing politics with your pay cheques. The Union needs your agreement before we can get the money.
Holden's Engine Company is the last car manufacturer in Victoria to secure an agreement. How much longer do you want to wait] SUPPORT YOURSELF] SUPPORT THE UNION] Give nothing back - and get your wage increases]"
The document purports to be signed by Ian Jones as acting secretary and in its bottom left hand corner bears an address which is apparently that of the Victorian branch of the Federation. In the bottom right hand corner is a photograph of the head and shoulders of a person with the caption, "Ian Jones, Acting Secretary".
Some considerable correspondence has passed between the solicitors for the applicant and the respondent Jones. It is necessary to go to that correspondence in some detail. By letter dated 19th October 1989, the solicitors for the applicant wrote:
"Dear Sir,
Re: Elections.
We act for Mr. John Buchanek. We are instructed that our client has become aware that two of your organisers, Herbert Muench and Stefanie Baillie have been distributing election stickers urging members to vote for you in the forthcoming election. This distribution has been undertaken during normal working hours and acccordingly the organisers are performing electioneering activities in the course of their employment by the Union. In the case of Mr. Muench, he has also been using the facilities of the Branch for election purposes. As you know, it is a breach of Union Rules to use the facilities of the Branch for election purposes, or for employees of the Union to be performing electioneering activities during the course of their employment. Our client requires that you and your Committee of Management give an undertaking that such activities will cease forthwith, and that no use of Branch facilities for election purposes will occur in the future, and that no employee or paid Official of the Branch will engage in election activities during the course of their employment. If such an undertaking is not received by this office by 5.00 p.m. on Monday the 23rd October 1989, we are instructed to commence proceedings in the Federal Court of Australia."
By letter dated 20th October 1989 the respondent Jones replied:
"It is with some concern that I read your correspondence regarding our current election and the alleged activities of two of our organisers. I note that your client request the matter to be raised before the Union's Committee of Management and a response to your office be provided by 5pm Monday 23rd October, 1989. In response to your correspondence I would make the following points, if the matter is to be raised at the Committee of Management:
(a) In respect of organiser Baillie I would need to be convinced that this actually occurred. I would therefore request details of the plant or plants involved with some corroborative evidence.
(b) In the case of Mr. Muench it is claimed he has used Union facilities for election purposes. Please provide details.
(c) Your final point asks that the matter be responded to by 5.00 pm Monday 23rd as our Committee of Management meets on the 24th, and on the basis we still require information from your client it is impossible to meet this time. In closing I make the point that we too consider the points in your correspondence a concern, with the provision of the necessary details I am sure a satisfactory conclusion may be arrived at."
By further letter dated 20th October, the solicitors for the applicant wrote:
"Thank you for your letter of the 20th October, 1989.
We are instructed that Ms. Baillie distributed election material at the Toyota Altona Plant, and that Mr. Muench used a Union car to carry election material.
We note that your Committee of Management meets on the 24th, and accordingly now require that response be received by 10.00 a.m. on the 25th October, 1989."
This was followed by a further letter from the applicant's solicitors, dated 23rd October 1989:
"We act for Mr. John Buchanek. We are instructed that you have caused election material to be published on Union letterhead. A copy of the material is enclosed. As you know, you cannot use Union funds for election purposes, and our client requires you to immediately confirm that you have ceased the publication and distribution of this material, and your undertaking that you will not in future use Union facilities or funds for the production or publication or distribution of any election material."
This was followed by a letter dated 24th October 1989, as follows:
"re: Elections
We refer to our letter of 23rd October, 1989, and note that we have not received a response. Our client requests that you bring the matters raised in that letter to the attention of your Branch Committee of Management which we understand is meeting today.
Mr. Jones replied to this correspondence on 25th October 1989 in the following terms:
"Thank you for your further correspondence re VBU elections and a notice put out by this Union relating to Holden workers restructuring proposals and the reasons for delay. The newsletter headed "Union elections why haven't Holden workers got wage increases" - let me say that this newsletter deals with matters of genuine concern to our Union, this being disruption and confusion being created over Award Restructuring by people seeking some form of political advancement. The games these people are playing are causing a significant loss of income to our members employed at Holden therefore whilst I appreciate the instructions you have it is not my intention to seek your or your clients approval prior to circulating a legitimate union newsletter.
In respect to your previous correspondence the information you have provided is still inadequate to assess any wrong doing however I have instructed our Organisers on their role during an election campaign. Hoping this satisfies your client."
A factor not present in earlier cases but present in this case is s.209(3). I need not deal at length with it. Assuming that it might constitute a bar to the application being heard if there were reasonable steps which the applicant could have taken but had not, I am unable to see, and Mr. Bell was unable to suggest, any such reasonable steps.
The principles invoked by the applicant are well established. In Tanner v. Maynes (1985) 7 FCR 432 at p 441 Evatt and Northrop JJ. said:
"In Scott v. Jess, Gray J at 286-289 stated and elaborated upon four principles which on occasion may conflict. We agree with the statement of those four principles, namely: a. "It is proper, and perhaps necessary, for an organisation to communicate with its members about the affairs of the organisation and matters which may be of interest to the members." b. "In the expenditure of the funds and the use of the resources of an organisation, its objects and powers are to be interpreted broadly, so that any action which can fairly and resonably be regarded as falling within those powers and objects will be valid."
c. "A power given to a person or persons by the rules of an organisation must be exercised in good faith and for the purpose for which it is given, not for some ulterior or extraneous purpose." d. "The funds and property of an organisation may not validly be used to support one candidate or group of candidates in an election, or one point of view in a plebiscite, to the exclusion of another candidate or other candidates or the opposite point of view, or to campaign against a candidate or candidates in an election or a point of view in a plebiscite."
In Darroch v. Tanner (1987) 16 FCR 368 at p 372 the Full Court made clear that the fourth of the principles referred to in Tanner v. Maynes involves an objective consideration of the material in question. The Court said:
"The authorities to which we have referred make it clear that when a complaint is made that members of an organisation are, while an election is being conducted, using the resources of an organisation in a way which has the effect of unfairly supporting or promoting a candidate or group of candidates, the intention, purpose or motive of those members cannot make the expenditure of the resources of the organisation permissible. The matter for consideration is, first, whether the resources are being used. If the complaint relates to a publication, it is necessary also to look at the publication and determine whether it tends to support or promote a candidate or a group of candidates to the detriment of other candidates. In some cases, it may be necessary to have regard to extrinsic facts known to persons to whom the publication has been distributed to determine whether it has that impermissible tendency. However, the intention of those who use the resources of the organisation to publish the material has no bearing on this question."
In Valentine v. Butcher (1981) 51 FLR 127 at p 143 Keely J. said:
"In my opinion the use of either organizers or area representatives to distribute the leaflet to members is conduct which is impliedly prohibited by the rules for the reasons given in Short v. Wellings (1951) 72 CAR 84 and Kanan's case Unreported (Federal Court of Australia, J.B. Sweeney J., 14th September, 1979)."
The leaflet in question in that case was a leaflet advocating votes for a particular candidate in an election within a registered organisation.
The applicant did not contend that this case involves the exercise of any power in the rules of the federation other than bona fide for the purposes for which the power was given. His case was that objectively there was a use of the Federation's resources for electioneering, by the respondents Meunch and Baillie in the first two incidents, and by the publication of the leaflet in the third.
It must be remembered that the principle prohibiting such electioneering operates as an implied prohibition on what would otherwise be express powers in the rules of a registered organisation. It is necessary to look at the Federation's rules to see what relevant powers exist. Both federal rules and branch rules for the Victorian branch are in evidence. So far as organisers are concerned they are elected as provided in rule 3 of the branch rules. Rule 5 provides for their duties. The most important of these are that they shall be under the control of and take their instructions from the committee of management and the general secretary/treasurer. There is a provision about attendance at meetings and a requirement that each organiser shall submit a report of his or her work monthly to the committee of management.
The question of control of branch finances is a matter of some difficulty. Rule 32 of the federal rules, in sub-rule (a) provides:
"Each Branch shall have a Branch Fund which shall be managed and controlled in accordance with the rules of that Branch... ."
Sub-rule (c) provides:
(c) Branch funds may be applied for the following purposes:-
(i) Paying the necessary expenses of management of the Branch;
(ii) Paying subscriptions to any organization with which the Branch is or may lawfully become affiliated;
(iii)Rendering assistance to members who may suffer loss through lawfully taking an active and judicious part in the affairs of the Federation;
(iv) Rendering assistance to other Trade or Labor organisations within Australia;
(v) Making donations to organizations with which the Branch is affiliated up to an amount equal in any one year to the affiliation fee;
(vi) Making donations to recognized charities and charitable organizations recommended by the Branch Committee of Management and endorsed by the Branch in general meeting."
Sub-rule (d) imposes some restrictions on the use of branch funds with respect to sick pay, out of work pay, accident pay, superannuation benefits and mortality benefits. Rule 34 (a) provides that all property and funds held for use of any branch shall be under the control of the branch executive. Unfortunately, there appears to be no reference elsewhere in the federal rules, or in the branch rules, to branch executives. Rule 36 of the federal rules is a long and complex rule that seems to be based on the assumption that it will be a general meeting of a branch which will authorise expenditure. It provides that:
"It shall not be lawful for members assembled in General Meeting of a Branch to vote a sum exceeding $500 except for ordinary expenses;...".
There are then various qualifications to that provision. Finally, rule 55 of the federal rules, which meets a statutory requirement with respect to loans, grants or donations, places in the hands of the committee of management of a branch the making of the appropriate decision with respect to a loan, grant or donation.
In branch rule 4, there is a provision that:
"The Branch shall be governed by the following Office Bearers:-
President, two (2) Vice-Presidents, General Secretary/Treasurer, Assistant Secretary/Organiser,
Organiser/Administrator (required to reside in and service an allocated Sub-Branch), Organisers, Organisers (required to reside in and service an allocated Sub-Branch), three (3) Trustees, and four (4) Committee Persons."
The rule continues to provide:
"The Branch Committee of Management shall meet every fourth Tuesday of each month and shall deal with all correspondence, Organisers Reports and any other business that may be placed before them. Their decisions in all cases (where possible) shall be referred to the Branch meeting for endorsement or otherwise, seven (7) members shall form a quorum."
Branch rule 5 sets out the duties of the general secretary/treasurer. Among those duties are the preparation of a yearly balance sheet to be presented at the branch meeting, and the presentation of half-yearly audits to the committee of management. That provision suggests that the committee of management has some responsibility with respect to finance. Another duty, however, suggests otherwise. That is the duty that the general secretary/treasurer shall pay all due demands upon the branch that may be authorised by a general meeting of the branch. Branch rule 5 also provides for the duties of the trustees. It provides that:
"The Trustees shall be the custodians of all property belonging to the Branch."
Branch rule 11 provides that "The Business of the Branch shall be transacted at the General Meetings" and provides for the dates and times at which those meetings shall be held. It is therefore somewhat unclear whether the ultimate responsibility with respect to finance rests with a general meeting or with the committee of management.
There is nothing to suggest that the implication referred to in Scott v. Jess and Tanner v. Maynes should not restrict the rules as to organiser's duties, or the rules as to expenditure of funds. It is more difficult to say that the members of the branch committee are appropriate respondents when a question arises whether a certain use of the resources of the federation is prohibited by implication, and whether that use has constituted a breach of the rules by those members of the committee of management. The construction of the rules in a final sense is not possible on this application. A strong case, however, has been made out that the branch committee of management does have at least some responsibility for safeguarding the funds from improper expenditure. Such responsibility would normally be connoted by a rule such as branch rule 4, which provides for the government of the branch. Even if that responsibility is not ultimate, it would nevertheless justify ordering the respondents to stop some expenditure falling outside that which was permitted by the rules, if such a case were made out.
If the facts disclosed by the hearsay evidence as to the first and second incidents were proved by proper evidence at a trial, they would make out a strong case that a breach of the rules had occurred by electioneering by the respondents Meunch and Baillie on each of those occasions. An examination of the leaflet also reveals a breach of the rules by electioneering. The heading, "Union Elections", the reference to "others who are seeking to delay your wage increases merely to advance themselves in the forthcoming elections", and the words, "Support yourself] Support the union]", constitute a clear exhortation as to how to vote in the current elections.
The respondents have not availed themselves of the opportunity which was offered in correspondence to admit their error, and to give suitable undertakings as to the future. The letter of the respondent Jones dated 25th October seeks to justify the leaflet and is vague as to what instructions he has given to organisers on their role during an election campaign.
In my view, these circumstances make out a sufficient case for interim orders. To the extent that the balance of convenience may be relevant, it is apparent that the protection of the rights of the candidates against whom the leaflet was directed, and who are opposed to those for whom the stickers were distributed, far outweighs any inconvenience in being called on to obey the law. Indeed, if interim orders were not made, irreparable harm may be done, as the Court lacks the power to require persons to reimburse funds spent outside the powers given by the rules. See Darroch v. Tanner.
The existing orders do need some modification. The first order should not be made against the respondents Jones and Heaphy, in the absence of any evidence of activity by them of the kind complained of. The reference in that order to normal working hours may be confusing. If either of the respondents Meunch or Baillie were to take leave and to campaign, they might be said to be in breach of the order if they campaigned during the hours when they would have been working but for their leave. The order should also be recast to make it clear that the only activity prohibited is activity during actual working hours. The second order as presently framed appears to me to be too wide. It amounts to an order to obey the law generally, with criminal sanctions attached to it. In my view, this order should be restricted to the publication and distribution of written or printed material, that being the activity complained of. Finally, the orders should operate only up to the close of the ballot, unless discharged earlier.
For those reasons I make the following orders.
The Court orders that:
1. Until 9.00 a.m. on 7th December 1989 or further order, the respondents Meunch and Baillie and each of them refrain during his or her working hours from:
(a) distributing electioneering material referable to the current elections within the Victorian branch of the Vehicle Builders Employees Federation of Australia, and
(b) otherwise urging or seeking to persuade any member of the Vehicle Builders Employees Federation of Australia to vote for or against any candidate in those elections.
2. Until 9.00 a.m. on 7th December 1989 or further order, the respondents and each of them refrain from using the property, resources, machinery or staff of the Vehicle Builders Employees' Federation of Australia to publish or distribute any written or printed material supporting, promoting or opposing candidates, or calculated to influence voters in their selection of candidates in those elections.
3. The directions hearing is adjourned to a date to be fixed.
4. Liberty is reserved to any party to apply on twenty-four hours' notice in writing to each other party.
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