Campbell, R.T. v Crawford, G.R

IN THE FDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GEMERAL DIVISION

BETbTEFN:

RQBEXT THOMAS CAMPBELL

MICHAEL CQNNOLLY

Applicants

GEQRGE ROBERT CRAWFORD	AND
-	ORS

Respondents

CORRIGENDA

Amendments to the Reasons for Judgement	of Wilcox S. delivered
4th October 1985:

Page 62: Solicitors for the Applicant, substitute "Messrs

W.G. McNally & CO"

for "Messrs Ryan Carlisle ITeedham Thomas".

Page 62: Solicitors for the Respondents substitute "Messrs

Ryan Carlisle Needham Thomas"

for "Messrs

N.G. McNally & Co."

Date: 16 October 1985

Y. Hilton

Associate to Mr Justice

Wilcox

INDUSTRIAL L W

- Amendment

having the effect of

Council to so amend

rontravrne

Arbitration Act - Validity of resolution moved by delegate from

an unfinancial branch

- Meaning of "unfinancial" - Whether branch

was in fact unfinancial

- Effect of lack of notice

to councillors

of proposal to abolish a

particular branch

- Whether Federal

Council was bound by the

rules of natural justice to give to the

members of that branch an opportunity to be heard

- Whether

decisions to amend rules vitiated by

the pursuit by some members

of Council of

an unauthorized purpose

- Manner of exercise of the

discretion. -

Court's

Conciliation and Arbitration Act 1904 s.Z(f), 140, 197B Conciliation and Arbitration Requlations reg.l15(l)(d)(v)

ROBERT THOMAS CAMPBELL v. GEORGE ROBERT

CRAWORD and others.

MICHAEL CONNOLLY

v. GEORGE ROBERT CRAWFORD and others.

Wilcox J.

Sydney

4 October 1985

IN THE FEDERAL COURT OF AUSTRALIA

) )

NEW SOUTH WLES DISTRICT REGISTRY

)	No. 7 of 1985

INDUSTRIAL DIVISION

)

BETEIEEN:

ROBERT THOMAS CAMPBELL

Applicant

AND:

Respondents

CORAM :	Wilcox J.
n:	4 October 1985
PLACE :	Sydney

2 .

MINUTE OF ORDERS

THE COURT ORDERS

THAT

1.	The interlocutory injunctions made on	30 April 1985
be dissolved.
2.	The Rule to Show Cause be discharged.

3 .

The exhibits be handed out at the expiration

of 21

days unless, in the meantime,	a Notice of Appeal
shall have been filed.

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

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

)	No. 8 of 1985

INDUSTRIAL DIVISION

MICHAEL CONNOLLY

Applicant

GEORGE RQBERT CRAWFORD

JOHN RUTHERFORD

WILLIAM R. DAVIS

PEIIER LANE

GLEN BATCHELOR

ROBERT BRYANT

PETER MADDEN

ROBERT FAIRWEATHER

DONALD TAYLQR

REX HEVEY

STANLEY JOYNER

JOHN THOMPSON

ROBERT E'ULLER

LEO COX

RONALD MASTERSON

PLUMBERS AND GASFITI'ERS

EMPLOYERS' UNION OF

AUSTRALIA

- Respondents

Judqe makinq order: Wilcox J

Date of order:	4 October 1985
Place:	Sydney

MINUTES OF ORDER

THE COURT ORDERS THAT:

1.	The interlocutory injmctions made-on 30-April	1985
be dissolved.
2,	The Rule to Show Cause be discharged.

The exhibits be handed out at

the expiration of

days unless, in the meantime,	a Notice of Appeal
shall have been filed.

Note:

Settlement and entry

of orders is dealt with in order

36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

INDUSTRIAL DIVISION

No. 7 of 1985

BETWEEN: ROBERT

THOMAS CAMPBELL

Applicant

AM):

EMPLOYEES

Respondents

No. 8 of 1985

BFIIWEEN: MICHAEL CONNOLLY

Applicant

GEORGE ROBERT CRAWFORD	\,,
JOHN RUTHERFORD
WILLIAM R. DAVIS
PETER LANE
GLEN BATCHELOR ROBERT BRYANT

I	PETER MADDEN ROBERT FAIRWEATHER DONALD TAYLOR
F!EXHEmx
STANLEY JOYNER
JOHN THOMF'SON
ROBERT FULLER LEO COX RONALD MASTERSON PLUMBERS AND GASFITTERS EMPLOYEES' UNION OF AUSTRALIA

Respondents

I CORAM: Wilcox J

B: 4 October 1985

PLACE

: SYDNEY

- -

2 . .

I I .

REASONS FOR JUDGMENT

The disputes which give rise to these proceedings are unfortunate aftermath to an otherwise successful attempt to heal

a major rift in the ranks of plumbers and gasfitters.

The .

Plumbers and Gasfitters Employees Union of Australia is

organization registered under the Conciliation and Arbitration

&& 1904, having branches throughout Australia. there have been two branches in each of

For many years

New South Wales (Sydney

and Newcastle) and Victoria (Melbourne and Geelong).

At a

meeting of the Federal Council of the organization held from

: I

to 28 September 1984 a number of decisions were made,

th effect

of which, if the decisions are valid, is to abolish the two

separate branches in each of those States and to create

a single

branch for each of the two States.

In separate proceedings

Robert Thomas Campbell and Michael Connolly challenge the validity of those decisions. Both applicants are members of the

I	organization; Mr Campbell being associated with the Newcastle
branch and Mr Connolly with Geelong. The two applications have been heard together. It is common ground that the form of the
I
i
I
I	relevant resolutions is such that if they are invalid in relation
.I	to either Newcastle or Geelong they also must be regarded as
'	being invalid in .relation to the other branch.
i	I
!

Each application is brought under

S. 141 of the

.Conciliation and Arbitration Act.

In each case a Rule to Show

3 .

Cause was issued naming as respondents

13 persons. Those

!	persons, with Ronald Masterson, the Secretary of	the Newcastle
I

branch, are the persons who in September 1984 constituted

- and

who still constitute

- the Federal Council. Each Rule called

upon the respondents to show

why orders should not

be made that

they perform and observe the rules of

the organization by

treating as void and of no effect

the decisions of the Federal

Council to which

I have referred. On 30 April 1985, branch

I I	elections then being imminent,	an additional respondent was added
I I
I	I

in each matter: that respondent being the relevant returning

officer. Orders were made, in effect, suspending further steps in relation to the elections. Upon the same day Mr Masterson was

added as a respondent to each matter. At

the commencement of the

hearing the organization itself was added as a respondent in each

matter. In each case the 13 original respondents and the

organization were jointly represented. They were the only

respondents actively to contest the applications. Unless

otherwise indicated, I shall use the term "the respondents"

refer only to them.	I	I	_
r
-	,

The applicants rely upon a number

of grounds in support

of their claim that the relevant decisions are invalid. Some of	, -
t .I
i

these grounds depend upon the terms

of the Act and of the rules

of the union; but it is also contended on behalf of the

1'.

1~'

l \

applicants that, even if the Federal Council possessed the power

I ,

which it purported	to exercise, such exercise was vitiated by the	;-_
1

pursuit, by three members of the Council,	of an improper purpose.	r'.
1 1

It is also contended that the resolutions are invalid because

the participation in those resolutions of the delegates,of the

Sydney branch, Mr Peter Lane and Mr Glen Batchelor; the Sydney branch being said to have been then unfinancial.

The "war

" .

In order to evaluate these factual submissions it is necessary to set out something of the background to the meeting.

The story goes back

to 1976 when there commenced

a dispute within

the union which the witnesses generally referred to as the

"war";

an appellation not inappropriate having regard tc the bitterness

which it generated and the cost which

it inflicted upon the

organization and its members. The early stages of this dispute

were summarized by Evatt

J. in Cook v. Crawford (1981)52 F.L.R.

1;	a summary accepted as accurate by all parties in the present

proceedings.

The organization has been registered under the Conciliation and Arbitration Act

since 1911. Until 1954 there

was only one branch in New South Wales, the Sydney branch. There

was a

Newcastle sub-branch. In

1954 that sub-branch became a

full branch, covering

a defined area lying between

Broken.Bay and

the Queensland border and west from the coastline to the railway

line which runs from Singleton northwest

to Gunnedah, Moree etc:

see r. 47. Mr Masterson became the Newcastle branch secretary. He continued to hold that office until the events with which the

5 .

present applications are concerned. 11-1\1975 the rules of the

organization were amended to entitle the members of Newcastle

branch to elect a Federal Vice-President, with a seat on Federal

Council. Thereafter Mr Masterson held this additional office.

In 1918 a trade union registered under the Trade Union

Act 1881 (NSW), styled "The New South Wales Branch of the registered as an industrial union of employees under the

Industrial Arbitration Act, 1912 (NSW).

For many years that union

operated in close association with the federal organization; each

elected official apparently holding

the same office in the State

union as in the New South Wales branch of the federal

organization.

Prior to 1975 were covered by State awards.

most employed plumbers in New South Wales

In 1975 consideration was given to

the possibility of obtaining a federal award and

in 1976

agreements were reached, and certified under the Conciliation and

Arbitration Act, in relation to employed plumbers in Victoria,

South Australia and Tasmania.

The organization pursued

application for an award governing employees in the other States

- including New South Wales

- and in the Territories. However,

there was disagreement about the desirability of this course.

Some of the New South Wales officials actively opposed the

, . proposal for a federal award affecting within the councils of the organization but also before the

New South Wales; not only

...

I> .

I .

6 .

, Yz

I 2

Conciliation and Arbitration Commission and in

the Australian

. I ~

.-.

l	Industrial Court. On	3 August 1978 the name of the State union -
l

whicli was then controlled by opponents of the federal award - s changed to "New South males Plumbers and Gasfitters Employees

I	Union". A contest developed for the support of members. Early	.;
\
in 1979 Mr Masterson lodged with the Federal Executive of the	,.
, .' _.
organization formal complaints against Mr U.C. Bignell, the	..
I . , ..

Sydney branch secretary, Mr	H. Shooter, the assistant secretary	-	,L,-
f I.
!r:

organizer of Sydney branch, and three Sydney branch, organizers,	,	I .
b "

Messrs K.L. Tyler, R.L. Cummins and G.L. Waters. The gist of the complaints was that these five officials, although still officers

and members of the organization, had been involved in

the

persuasion of members of the Newcastle branch to resign from the

L '.

organization; their purpose apparently being to have them join

the State union. The executive found against the five officials

and, on 2 May 1979, expelled them from

the organization and

dismissed them from

the offices which they held. Mr R.A. Cook, a

member of the Sydney branch, challenged the legal validity of the

executive's decisions. By amendment Messrs Bignell, Shooter,

Tyler and Waters were added as applicants. On

4 March 1981, after

a 60 day hearing, Evatt

J. found in favour

of the

- respondent

: ,

members of the executive. Upon the same day, in separate .proceedings instructed by the then - and present - federal-

General Secretary of the organization,

Mr George Crawford, Evatt

J-. made orders requiring the payment

to the federal office

of the

outstanding Sydney branch capitation fees for the financial year

1978-79 and for the holding of elections

o fill the offices from

l	I
i

l	7.	\
4	I
I

which the expelled members had been removed: see

52 F.L.R. at

p.69. Those elections were held on

31 August 1981. They resulted

in the election of Mr

Lane as secretary

of the Sydney branch and

of Mr Batchelor as assistant secretary.

Those two gentlemen have

l	held those offices since that time.
I

The applicants before him appealed against

the decision

of Evatt J. to uphold the expulsions and dismissals from office.

The Full

Court (Smithers, Keely and Sheppard

JJ) was divided in

opinion. Keely and Sheppard JJ held that r. 2 8 ( 5 ) , under which

the Federal Council had amended the organization's rules

governing expulsion and dismissal from office, was unreasonable;

and so invalid under S. 140(l)(c) of the Conciliation and

Arbitration Act. Smithers J. dissented-

on that matter. However; .

the appeal failed because both Smithers and Sheppard

JJ took the

view that, having regard to

the conduct of the expelled

officials, the Court should not exe.rcise its discretion to make

an order under 5.141 of the Act: see (1982)

6 F.L.R. 34.

Regrettably, the decision of the bring to an end the litigation between the two factions. The

Full Court did not

subsequent position was summarized in

an affidavit of Mr Crawford

filed in those proceedings, the accuracy

of which summary has not

been challenged:

"Notwithstanding the proceedings in the Federal Court the five dismissed officials continued to occupy their offices within the State Union and

I	intense conflict continued between theorganization
!

and the State Union,

particularly

in relation to

Union membership and

the question

of whether a

Federal Award should be made covering plumbers and

gasfitters within the State of New South Wales.

Following the service of a Log of Claims on

plumbins employers within the State of

New South

hales by the Organisation in 1979 proceedings were

commenced in the Australian Conciliation and

Arbitration Commission in which said proceedings

the Organization sought

a Federal Award. These

proceedings were strongly opposed by

the State

Union and plumbing employers

in the State of New

South Wales. Following the finding of

interstate industrial dispute by Deputy President unsuccessfully challenged the finding in the High

Court of Australia

(see Re Conciliation and

Arbitration Commission Ex Parte PGEUA (1981) 56

ALJR 6). Thereafter the State Union opposed

further proceedings in the Australian Conciliation

and Arbitration Commission in reliance on Section

41(l)(d) of the Act. Following a further decision

of Mr. Justice Alley declining to discontinue

proceedings under Section 41(l)(d), (1982)

3 IR

1861, the State Union unsuccessfully appealed to	a
Full Bench of the Conciliation and Arbitration

Commission ((1982) 31R 410).

Finally following

the dismissal of the State Union's appeal

Federal Award was madk on 14th February 1983.

State Award prescription however remained ,in New

South-Wales in areas not covered by the Federal

Award, principally covering plumbers employed by

State instrumentalities."

Peace neqotiations

The cost of this litigation, both

in terms of money and

effort, was obviously considerable. Moreover, according to Mr

Crawford "intense competition for membership between the State

Union and the Organization persisted and the bitter rivalry

continued unabated." Accordingly, the battle for

a federal award

having been won, the executive of the federal organization began

to consider the possibility of

a reconciliation with the State

union. At a meeting on 23 November 1982 the executive empowered

the General Secretary to discuss the future of the State union

with officers of the Australian Council of Trade Unions. The

President of the A.C.T.U. apparently conveyed settlement

proposals to officers of the State union but without response.

In February 1984 informal discussions with

Mr Crawford and

Mr Lane had some

Mr Matt Gemmell, an organizer

of the

State union and a person who had been actively involved in the

contest for members. It was decided to convene a meeting, under

the independent chairmanship of an official of the Building

Workers Industrial Union, between the full time officials

of the

State union and the full time officials of the Sydney branch of

the organization; together with

Mr Crawford as General Secretary.

This meeting was held on

22 March1984. As Mr Crawford put the

matter in his-affidavit:

"The discussion revealed a positive approach

by.

both groups and it was agreed that both groups

would go back to their respective unions and

report on the discussions that had taken place in

order to reconvene in

a further conference with

some firm proposals to be considered

by both

organizations.

According to Mr Crawford, one of the State officials was their

the matters raised by

own continuity of employment. The

representatives of the federal organization indicated

a readiness

to have the federal organization employ certain specified State

officials, but not all of them.

The State official=: then asked

what was there to stop the federal officials, after having

' \

l	i
I

10. ..

obtained by amalgamation of the two unions all the members and one set of records, sacking those officials. Mr Crawford said

that he replied that the agreement would be with

a national

union,"it would be

an agreement that had been adopted by the

responsible branches of that organization, and as General

Secretary it would be my duty

to ensure that the terms of that

agreement would be carried out and

I would give

a guarantee to

ensure it would be carried out.

It was a matter of the

credibility of the national organization".

I	Mr Urawford did not invite Mr Masterson to the meeting

of 22 March.

In evidence he gave two reasons: frrtit, "the war

was really being conducted in Sydney, that is where the trench

warfare was" and, secondly, he was aware that Mr Masterson "had expressed a view that we should not be talking

to them and if

there was to be any progress in discussion then obviously that

was a delicate-matter." However,

Mr Masterson was asked

attend a meeting held on

29 March; a meeting which was called by

Mr Crawford to formulate proposals

to be put to the State union

on behalf of the federal organization. That meeting was attended

by all of the full time officials of the Sydney branch, by Mr

Masterson as

a representative of the Newcastle branch and by Mr

Crawford. The meeting resolved on

12 points to be put to the

State officials

at a further meeting inteAded

to be held on

April.

The 12 points, which were reduced

to writing by Mr

Crawford, included provision for

the State union

to cease to

I:.

operate and for all its members

to become members of the federal

I '

11.

___ . ..

--..

organization. Points 5,

6 , and-7 were as follows:

"5.

The Sydney Branch of the Federal Plumbers

Union undertakes to employ

H. Shooter as an .

Industrial Officer.

The Federal Plumbers Union undertakes

employ M. Gemmell and	R. Campbell as'
Organisers.

7. An agreement to be drawn up and signed by the

parties that, provided

H. Shooter, M. Gemmell

and R. Campbell are loyal, do not challenge

the present leadership of

the Federal Plumbers

Union and carry out their

normal duties

allocated, the present leadership

- for as

long as they remain

the leadership - guarantee

continuous service for

H. Shooter, M. Gemmell

and D. Campbell.

According to Mr Masterson, at the meeting of there was an exchange between Mr Batchelor and himself relating

29 March

i '.

to the future of the Newcastle branch.

.In his affidavit Mr

Masterson said that,

in the context of discussion relating to the

employment of the State officials and

the necessity for the

Newcastle branch to play a part in providing one or more positions, Mr Batchelor said to him "You will have to-come to the party or we'll have to move in and knock you off." Mr Batchelor

denied that there was any threat. He said that the mood at the

meeting was friendly, that

he and Mr Masterson were close friends

and that he had often made joking comments about "knocking off"

Newcastle. Mr Masterson agreed in evidence that threats !o "knock off" Newcastle were

Mr Batchelor's

"a kind of standing joke"

between them. Mr Masterson also attributes to

Mr-Lane a

threat

to take over Newcastle

if that branch would not "come to the

party".

Mr Crawford denied that anything along these lines was

I	.
I
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I

12.

said, by either

Mr Batchelor or Mr Lane. In his affidavit Mr

Lane denied that either he or

Mr Bachelor said anything about

taking over Newcastle. This denial was not challenged in

cross-examination. Although Mr Masterson claimed in evidence

that he regarded what was said as

a threat to the Newcastle

branch and.that such a threat would have been a serious matter,

he took no action to report the matter to

he Federal Council

to recommend to the Newcastle branch committee of management that

it take any action

in relation thereto. I am not satisfied that

any threat was made at this meeting. Perhaps

Mr Batchelor

repeated his "joke" but, if

so, I believe that Mr Masterson

understood it as such. Had

Mr Lane made any threat to

Masterson I believe -that

Mr Masterson would have done something

about it.

The fact that he did not supports the denials of both

Mr Crawford and

Mr Lane.

The document prepared by

Mr Crawford was handed

to the

representatives .of the State union on

5 April. It was discussed

at a further meeting on

18 April between the officials

of the

federal and State organizations, when both delegations announced

that their respective executives had accepted the 12-points. The

meeting decided to form

a committee to draft

a formal agreement;

Mr Crawford and Mr Lane being nominated to represent the federal

organization.

13.

Consideration of the peace terms

Mr Crawford was concerned to ensure that members of the Newcastle branch were aware of the steps being taken

in relation

to re-unification. He requested Mr Masterson to arrange

informal meeting

of interested branch members. This meeting was

arianged for 9 May 1984.

About 20 to 25 members attended. Mr

Crawford was present, in company with Mr John Rutherford, the differences between the evidence of Mr Crawford and of Mr Masterson as to what was said but I do not think that they are significant. It is clear that Mr Crawford informed those present

of the negotiations

with the State officials

and, in particular,

that the implementation

of the agreed terms would require the

federal organization to find jobs as organisers for both Mr that Sydney branch was not in a financial position to employ both

those men - as well he suggested that at least one

as Mr Shooter as an industrial officer

- and

f the State officials would

have

to be employed at Newcastle.

A question was asked

by Mr Ken

Granger, a recently employed temporary organizer,

as to whether

this would affect his job. Mr Crawford seems to have replied to

the effect that one option would be

for him to

be replaced by

State organizer but, according to

both accounts, there was no

specific threat to Mr Granger's position.

Also according to both

accounts, Mr Crawford asked those present to consider what other

options were available to resolve the problem.

He mentioned as a

- 14.

possible option the reversion of Newcastle to sub-branch status,

the sub-branch having attached to it either Mr Gemmell or Mr

Campbell. No decision was made at this meeting. Indeed, Mr

Crawford did not seek a decision; his purpose was to report the

position and to stimulate consideration in Newcastle as to the

most desirable course of action. However, according to Mr

Crawford, he made clear to Mr Masterson in a private conversation

at the airport his view that one of the two organizers would have

to work in Newcastle. Mr Masterson denied this specific

statement but he said that

e clearly understood Mr Crawford to

be of the opinion that one of the Newcastle organizers would have

to make way for one of

the State union organizers. At

no stage -

not even in his evidence in this case	- did Mr Masterson contest
I

Mr Crawford's opinion that Sydney branch could not afford to

employ both of these organizers. He said in evidence that Mr Lane had claimed as much at the meeting of 29 March and that he

had accepted that claim at that time.

He described the Sydney

branch as being "desperate for finance "and said that if all of

the named State officials were to be taken back in the

organization "they" (Sydney branch) "had to put people out".

Mr Masterson said that, upon the day following the meeting of 9 May, Mr Granger told him that

he had decided that

"may as well bail out

now". In fact he stayed on for a

few more

days but then resigned. Notwithstanding Mr Masterson's

understanding of the position outlined by Mr Crawford on

9 May,

the Newcastle committee replaced Mr Granger with a new organizer,

I .

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15.	I	.
.I.
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, .

Mr Phillip Darby, without reference to

Mr Crawford or to Mr Lane.

At a meeting held on between the federal and State	16 May 1984 a draft agreement
unions was prepared. This draft
provided that Mr Campbell and	Mr Gemmell would be employed as

federal organizers until the elections

in 1987 and that Mr

Shooter would be employed

as an industrial officer. The draft

further provided that, at the 1987 elections, "the officers will

co-operate and present a common list of candidates for election

by the membership". The draft proposed a merger of the

membership records of the two unions by

1 April 1985. This draft

was approved by the State Conference of

the State union during

May 1984 and by

the committee of management of the Sydney branch

of the federal organization on

29 May 1984. Over the period

6-8

June 1984 the executive'of

the federal organization met. The

executive resolved to endorse the principle of reconciliation

the two unions in New South Wales, to endorse and adopt the draft

agreement and to recommend the adoption	of the agreement	to stop	. .
:I;

work meetings of members concerned and to the Federal Council

the organization. An amendment, moved by Mr Masterson, for the

deletion of any reference In

the agreement to Mr Gemmell being

employed by the organization was lost. Later in the meeting, and

over the opposition of Mr Masterson and Mr Bryant of the Western

. ,'

Australian branch, the executive resolved to invite five persons,

including Messrs-Gemmell, Shooter and Campbell, to make

application for re-admittance to the organization.

16.

---

Stop work meetings-of the members of the Sydney and Newcastle branches of the organization

were held on 27 June. The.

notice sent to each member in relation to the Newcastle meeting

was ,accompanied by

a copy of the draft agreement and

an extract

of the relevant minutes of the Federal Executive meeting. The

meeting in Sydney approved the draft agreement. That in

Newcastle did not.

The formal minutes of this meeting, which

were

prepared by Mr Masterson from notes made

by him during the course

of the meeting, record

a motion - moved by Mr Darby and called in

the minutes an amendment - as follows:

"that this stop work meeting of the Newcastle

Branch of the Plumbers and Gasfitters Employees'

Union of Australia rejects the Federal Executive-

recommendation. That we support the

re-unification of all of the rank-and-file members

of the Plumbers and Gasfitters Employees'-Union of

Australia and the N.S.H. Plumbers

iuid Gasfitters -

Employees' Union. We oppose employing the three

State officials of the

N.S.W. Plumbers and

Gasfittes Employees' Union,

Don Campbell, Matt

Gemmell and Harold Shooter."

Mr Crawford attended the Newcastle meeting. He reported the history of the negotiations for re-unification in detail. He

put the position in relation

to the State officials quite

bluntly. Mr Masterson recorded him as saying:

"It is the desire

of the-Federal

Union to have

coverage over the State Union.

The snag is, we'

must take over three full time

officials of the

State Union as officers, organisers of

the Federal

Union as these three officials want to hang on and

unless we take them they will not pass over

the State Union. Matt Gemmell, Harold Shooter and-

n'on Campbell. That is their unanimous position.

" -

I .

17.

After Mr Crawford spoke there was

and questions, during which Mr Crawford said that Federal Council

would make the "final decision". Shortly thereafter the motion

was put to the meeting and carried unanimously.

period for comment

In view of the Newcastle decision

Mr Crawford decided

that it was necessary,

as a

matter of priority, to obtain

decision of the Federal Council in relation to the agreement.

arranged a postal ballot of the members of the council upon

the-

question whether the members approved adopting the draft

agreement. Mr Crawford enclosed with the ballot papers a report

setting out the history of the matter.

This report disclosed the

decisions at both the Sydney and Newcastle stop work meetings.

The accuracy of the report

has not been challenged save that it

states the Newcastle decision as being that the branch 'would not

accept any of the full time officials of the State Union

into.

membership of the Federal Union'.

I think that this is not quite

correct. The effect of Mr Darby's motion was merely that these

people were not to be accepted as employees of the organization;

nothing was said about membership. However, all parties in these

proceedings agree that this difference does not matter. Mr

Crawford's report went on to say that the Federal Executive's

recommendation "has been rejected

by a meeting of the Newcastre

Branch members". That statement is obviously correct,

as Mr

Masterson conceded in his evidence. The postal ballot closed on

6 August 1984.

By a majority of 27 to 5 the agreement was

approved and adopted. It	was formally executed on	31 August
1984.

18.

The move to abolish Newcastle branch.

Mr Lane learned of the decision at the Newcastle stop work meeting with some dismay.

In his affidavit he stated that

to him the decision "meant that	e agreement had been
torpedoed". He went on:

"Its decision was inconsistent with the proposal

for reunification. The decision presented a

direct financial threat to

he Sydney Branch.

Both Gemmell and Campbell had to be employed under

the agreement. One had to be employed in

the

Newcastle area. Because the Newcastle Branch had refused the employment of the officials the Sydney

Branch would have had

to employ the officials

its own.

The Branch could not-afford to do this."

Mr Lane decided to resolve

the problem by seeking the

winding up of the Newcastle branch and its reversion to

sub-branch; thus enabling those managing the enlarged branch to

control the funds available to Newcastle and to use them for the

employment in the Newcastle area of one of those two organizers.

He obtained advice from

Mr Crawford as to the rule amendments

which would be necessary to achieve this result and discussed the

position with members of the Sydney branch committee of

management. The committee resolved that its only option was to

seek the winding up of

the Newcastle branch. It called a meeting

of members of the Sydney branch

for 14 August r984. That meeting

unanimously adopted a lengthy resolution in which it requested a

special meeting of Federal Council at

the earliest possible date

19.

' "to consider the following agenda items to alter

the ules of the

Union.

a) That

the Newcastle Branch be wound up and

revert to a Sub-Branch of

the Union.

That there be only one branch of the Union in

New South Wales entitled 'The New South Wales

Branch of the Plumbers- and Gasfitters

Employees Union of Australia'.

That consequential amendments to the rules be

made to give effect to (a) and

(b) as above

and include...

That the change of rules apply from the 1st April 1985."

This resolution was transmited to

Mr Crawford who took a

postal ballot of members of the executive upon the holding of

special meeting of Federal Council from

26 - 28 September to

consider "the Agenda items submitted by Sydney Branch

and any

other consequential Rule changes that may be required from

consideration of the Sydney Agenda items" and also one other

unrelated matter. The agenda items submitted by Sydney branch

were enclosed. The majority of the executive voted in favour of

holding the meeting; Mr Masterson voted against. He agreed in

evidence that

by the time

he received this

ballot-paper

apparently about

24 August 1984 -

it was clear to

him "that some

very serious and significant step was being- contemplate&

within-

the union in relation

to the fortunes

of Newcastle branch." -He

appreciated that the effect of the resolution would be to revert

Newcastle to the status of

a sub-branch.

- -

I	Mr Masterson respondedto the situation by drafting	a
I

petition for presentation to Federal Council. The petition

referred to the achievements of the Newcastle branch over its

years of existence and concluded with

a plea to the

federal.

councillors "to vote against Sydney Branch's proposed rule

changes or any other changes which will bring about the closure

or the limiting of the Newcastle Branch".

The petition was

signed by some

400 memhers; about half the current financial

membership of the branch.

The minutes of the meeting of Federal Council of

September are in evidence. Mr Lane and Mr Batchelor represented

Sydney branch. Mr Masterson represented Newcastle. Three

-28

councillors were absent, although one absentee was represented by

a proxy and each branch was representd. Under the rules

of the

organizaion ( r

,25) tile voting entitlrment of brailrhrs in counc i l

ballots is related to their financial membership. Where only one

councillor is in attendance from councillor is entitled to exercise the

a particular branch that

full entitlement of that

branch.

In the event, therefore,

all votes could be

- and

apparently were

- exercised.

The first item of business considered a motion moved by Mr Lane:

by the meeting was

"That the Newcastle Branch be wound up and revert

. to a Sub-Branch of the Union. That-there be

only

one Branch of the Union in New South Wales

entitled 'The Plumbers and Gasfitters Bnployees'

Union of Australia,

New South Wales

Branch'.''

21. I .

. -

This motion was debated over a period of some hours; both Mr Lane and Mr Masterson speaking at length.

In evidence Mr

i	Lane said that during this discussion he asked Mr Masterson	’ _ I
,.
i	whether he could suggest any alternative method of implementing	, I
I
i	r :

the agreement with the State union.	Mr Masterson agreed that	Mr	I	.
..

Lane “could have said

that” but he did not provide an alternative

I	“because I did not see the situation as being necessary to alter

I	the branch“. Mr Masterson did raise some questions regarding the

status of the Sydney branch meeting but

he did not make any

J.,

I, .I

allegations about

the motives actuating the Sydney branch or its

I i

representatives. In the result the motion was

carried-by 23

I I

votes to 11.

On 28 September 1984 council considered a report by Mr

Crawford as to

the rule changes necessary to give effect to the

earlier decision. At this stage, apparently for the first time,

the suggestion was made that the principle

of having a single

branch in a State should apply also to Victoria. Council

I	resolved, with only Mr Masterson opposing, as follows:

“That this meeting

of the Federal Council has given

consideration to the practical problems involved

in the implementation of the reunification

of the

I -

State Registered Plumbers’ Union with the Federal-.

Registered Plumbers’ Union in

New South Wales, and

noted the history and development

of State

Branches of the Federal Union in all States	except
New South Wales and Victoria.

“The resolving of the problems in New South Wales

would continue the development

of State Branches

I -

. -

22.

which has been proceeding over the past decade and

provides the opportunity to complete the circle

and have a uniform State Branch organization.

"Council resolves to complete the circle and

establish State Branches of the Union in

New South

Wales and Victoria.

Council then proceeded to consider and

to adopt - only

Mr Masterson opposing

- the resolutions to amend the rules of the

organization which are challenged

in these proceedings. The

amendments have the effect of providing for

a single branch in

each State and of transforming the Newcastle and Geelong branches

into sub-branches. A n amendment to permit Newcastle sub-branch

to elect one of the Federal Vice-Presidents was defeated but, by

the amended r.42, the

New South Wales and Victorian branches were

required to provide out of branch

funds sufficient moneys to the

Newcastle and Geelong sub-branches, respectively,

"to defray the

salary of a full-time official of that sub-Branch and otherwise

to meet the costs of operating the sub-Branch".

. .

I	L- :
1 .
I

The Points raise a number of matters

of Claim

filed on behalf of the applicants

- e

. ..

by	virtue of which it is contended- that	--
I ,

the decisions of the Federal

Council on 28 September-

1984 to

amend the rules are invalid.

Not all grounds are pressed. Some

I l

that remain

may conveniently

be considered together. They reduce

1 : .

. ,,

to four substantial grounds

which may be summarised as follows,

being the order in which

I will deal with

t em:

a)	- That the council lacked power under the rules

to make the amendment; alternatively,

if the

. 23.

rules did confer power,

that the rules are

invalid as contravening

5.140 of the Act.

That the decisions are vitiated by the participation in the deliberations and voting

of representatives

of the Sydney branch, that

branch being unfinancial

t the time.

That, even

if the council had power generally

to make the amendments, the decisions, insofar

as they affected the Geelong branch, are

invalid because:

(i) no notice was given to the

1 councillors prior to the meeting of

any proposal relating to Geelong;

8..

and

I	(ii) no opportunity was given to any

I	representative of the Geelong branch
I	to be heard;

and the decisions	in relation to Newcastle are
inseverable.

d)	That the decisions insofar as they relate-to

Newcastle branch are vitiated because

of the-

pursuit by some councillors of

an improper

purpose and the decisions

in respect of

I	Geelong branch are inseverable.
I
I

Power

S ,

Rule 21 of the rules of the organization is

entitled "Government". Relevantly it provides:

"1. The supreme control of the Union is

vested in the membeers of the Union. Subject

thereto, the supreme control vested

in the

members shall

be exercised on their behalf

the Federal

Council...

2. ...

3 .	The Federal Council shall have the

general control and conduct

of-the business

i	-	.	_.
I	.I
1	, -

24. I .

! ,

I	of the Union and without limiting the

L ,

foregoing the powers

of the Federal Council

. _

shall include the following:

- (a)

to direct the policy of the Union

in all matters affecting the

interests of the members;

i	I	(b)	...	-_ -
. '

I	(C)	to resolve all matters referred	to
i	it by Branches;

I	(d) to make amend or rescind any

the

Rules of the Union, . . . "

I	b ,
/.

Rule 27 deals with amendment to

he rules.

I	provides :

"1.

The Rules of the Union shall not be

amended except on a resolution carried by

a majority of the Federal-Council.

2 . Any member of the Union desiring to

submit to Federal Council any proposal

amend the Rules must forward such a

proposal to the General Secretary to

reach him not later than

2 months prior

to the General Meeting of the Council.

3 .

,The General Secretary shall include such proposals in the Agenda Paper for the Biennial Meeting.

Notwithstanding the provisions of

Sub-Rules ( 2 ) and

( 3 ) of this Rule, the

Council may at any time

of its own moti-on

make amend or rescind any of the Rules

the Union.

The relevant meeting was not, of course, a biennial meeting of the council. It was an

extraordinary meeting

convened' pursuant to a resolution

of the Federal Executive,

as provided by r. 2 2 ( 2 ) .

It follows that sub-rules

( 2 ) and

(3) of r.27 have no application. But sub-rule

(4) is an

-- 25.-

over-riding provision, purporting to empower the council to

amend the rules at any time and of its

own

motion.

The applicants do not concede that the effect of rr. 21(3)(d) and 27(4) - if those rules be valid

- is to

empower the Federal Council to amend the rules at any time,

even thereby by abolishing branches. But they put nothing

to the contrary and

it seems to me that this is their

effect: see the comment of Sheppard

J. in Cook v. Crawford

at 62 F.L.R. 94 in relation to the independent operation of the equivalent sub-rule (5) considered in that case. The

real question, in relation to power, is whether rules which

may have that effect are valid;

The argument for invalidity relies upon three

separate provisions of

s.140(1) of the Conciliation and

Arbitration Act: paras (a),

The rules of an organization

shall not be contrary to, or fail to make

a provision required by, a

provision of

this Act, the regulations or an award or

otherwise be contrary	to a law;
...

shall not impose upon applicants

for- -.

membership, or members, of the

organization, conditions, obligations or

restrictions which, having regard to the

objects of this Act and the purposes of

the registration of organizations under

this Act, are oppressive, unreasonable-or

unjust; and

!:.

26.

(d)	' shall be such as to provide for the

members of the branch only and matters

autonomy of a branch in matters affecting

concerning the participation of the

branch in any State industrial

conciliation and arbitration system."

Regulation 115 of the Conciliation and Arbitration

Rqulations specifies certain prescribed conditions to be

complied with by an association applying for registration.

Those conditions include:

"(d) the affairs of the association shall

regulated by rules

... providing, in

relation to the association, for	-
...

(V)

the control of committees of the

association and its branches by the

members of the association and the

members of the branches, respectively;

...

The argument is put that rules permitting abolition of a branch without the--consent of, or even

he-

reference to, the members of that branch are rules which

fail to provide for control of branches Hence, it is said, the rules

by their members.

fail to make a provision	, .
r

required by the regulations and

i that respect contravene

s.l40(l)(al.

In reliance upon s.l40(l)(c), it is said that

rules which permit such

a result are rules which impose uon

members of the organization conditions, obligations or

restrictions which, having regard to the objects of the Act

are oppressive, unreasonable or unjust. One of the "chief

27.

I	objects" of th	.e Act	i	S by "t	o encourage the democrati-c	'
I

control of organizations

so registered "(that is, under the

Act)

'I and the full participation by members of such

organization in the affairs of the Organization":

see.

I	s.2(f 1 .
I

In Cook v. Crawford the Full Court considered the

validity of the then r. 28(5) of the organization. Rule 28

- the terms of which are set out at

62 F.L.R. 45 - then

followed a form similar to the form of the present r.27; it

provided for amendment pursuant to member initiative and

ended with an over-riding provision,

r. 28(5), empowering

Federal Council at any time to "make

or amend any rules".

By majority, Keely and

Sheppard-JJ,

Smithers J. dissenting,

the Court held that this last sub-rule- contravened

s.l4O(l)(c) of the Act because it was unreasonable:-see

F.L.R. at pp 74-77, 106-109. The basis of the deci-sion that a rule which permitted

was-

a function so important- as the

amendment of rules to be performed by

a committee of only 14

members of the organization, without even the necessity of prior notice to members generally, was incompatible with s.2(f) of the Act. As Sheppard S. expressed the matter at

p. 108, the amendment to the rules to put r. 28(5) into its

then form "discourages full participation by members in an

important affair of the organizStion, namely

the-amendment

of its constitution."

28.

I .

, .

That basis of decision is equally applicable to the present r.27(4). Notwithstanding some variation between the

wording of the two sub-rules, the decision in

Cook v.

Crawford is indistinguishable-from the present case.

If the

approach adopted by the majority in that case is still good

law, it must

be held that r.'27(41 is invalid;

so that the

Federal Council had no power to make

the rule amendments

under present challenge.

The respondents, however, argue that

the decision

on this point

in Cook v. Crawford cannot stand

with a later

Full Court decision: Wiqht v. McLeod (1983) 51 A.L.R. 483.

In that case the Court had to determine the validity under

s.140(1) (a) and (c) of a rule of the Australian Insurance'

Employees Union permitting amendment

of the rules

of that

organization by a resolution

of its Federal Council adopted

by postal ballot. By majority, Bowen C.J., Smithers, Evatt

.	and Northrop JJ, Sheppard J. dissenting, the Court held that rule to be valid. At p. 490 Bowen C.J. accepted as correct

a concession by counsel for the appllcants that- the rules

then in question "were not bad merely because they allowed

the Council to alter the union's rules." His Honour went on

to note the particular submission that was put,

namely-that

"the present rules were contrary to the Act in allowing the

whole of the rule amending process to take place

at Council

level without any participation by members

or branches being

required,"

The submission pointed out that the rules

- - _ _

permitted rule changes without notice to members of the

proposal, by postal ballot

- thus preventing debate and

exchange'of ideas at

a meeting-- and by only a small-number

of council members.

The Chief Judge found "considerable. ,

force" in those submissions. He referred to the

Full Court

decision in Cook v. Crawford and to two later decisions

Sheppard J. in Squires

v. Stephenson (1983) 4 I.R.1;84,

commenting that each of those decisions "was based on its

own individual circumstances". He went on, at

p. 491:-

"I am unable, however, to agree with the

suggestion that the

law requires, as

general rule, that it is necessarv for

members to participate

in every rule change

for the rule amending procedures to comply

with the

Act. Rule-amending procedures must

be considered against the background of the

rules of the particular organization.'

Bowen C.J.

commented that it-was "important that

the Council here is

a democratically elected

body":

- H e -

referred to various safeguards

in the rules

- quorum;

proxies, notice and the requirement of a two-thirds majority

- as going "a long way" towards indicating non-contravention

of s.140 (l)(c). His Honour referred to the requirement

notice of Council decisions,

with the consequential

opportunity of members to seek

a reversal of the rule change

or to take action

in this'court.

He placed some emphasis

upon the provisions in the rules for

a plebiscite of members

but, at p. 493, commented:

8 ,

.	!	I.
i	.-

-	30.	l:.	f
' i

I-.

"The mere fact that	Council is given power	t .
,v:.

to amend rules without the existence in the	h I '
rules of a liberal plebiscite provision will	, I
not automatically mean that the rules	,

contravene s.l40(l)(cl.

Each situation must

consid red	in ivi ually	be	pa t cu ar	with	' i
..

regard to the mode of election

of the

Council, the rules relating

to Council

meetings, the position of branches in	f ..
i

relation to the Council, the extent

of the

1 !.

power of the Council to amend rules, any

I	requirements for members' participation in	i :
I	l I

the process and any other means

of_ review of

. ,

the Council's decision."

a - .

8	.
.	.

In the result his Honour held that the subject rules did not contravene either s.l40(l)(c) or reg.

Smithers J. also referred to saying that his reasons for rejecting the argument of

Cook v. Crawford,

invalidity in that case were

issu s

now

"relevant

the

i	. .
I

I	befbre the court." At p.497	his Honour referred to the
"question of principle" then	before the Court "as arising in

respect of a rule which confers on Federal Council the power

to make any rule amendment or

new rule by a two-thirds

majority of members upon

a postal reference to the members"

(of Council) "requiring their vote by post

_.. The

immediate question

is whether there' is anything incompatible

- with the provisions of the Act or the Regulations thereunder in a rule which confers on a collective body of an

organization such

as a Federal Council a power

so to make

and amend rules without reference to the branches

or -

membership of the organization." At p. 499 Smithers

31.

J.referred to the importance of reg 115(l)(d)(v):

!	“The regulation states in imperative tones that the

rules shall provide for the control of

committees of the organization by the membership.

Clearly, if there be adequate control, the fact

that a paticular body is empowered to make and

amend rules would not offend

S. 140(l)(c).”

His Honour proceeded to list, at pp.

499 - 500, relevant

features of the subject rules.

He referred to the arguments in

favour of, and opposed to, a requirement for the participation

members In rule changes; categorizing those arguments as being

merely a debate about what was desirable.

He concluded at pp.

502 -

5 0 3 :

“In my opinion it is fair to say that in all the

debate it has not been demonstrated that there is	.	.-
_ .
absent from the total situation established bp the
rules of the organization, some quality, regarded	,I L

as so essential to representative

or particlpating

democracy that the situation can be said to be one

lacking regard to the ideai of democracy and

membership participacion, in the context of the

conduct of the affairs of the organization in

accordance with the purposes

of registration of

the organization under the Act:

... Tine vital

I	consideration in democracy is the degree of electoral accountabllity of the government to the

membership. Other controls are but instruments

for use when accountability

has failed to

achieve its objective. Where the electoral system

is soundly devised, as

in the case of thls

L ’

organization, the norm

is that representative

government will adequately reflect the will of the

electorate. Controls such as plebiscites

which

are onerous and expensive exercises are

appropriate only where there is a body

of the

I	membership sufficiently moved to challenge the government. In this organization, with available avenues, through the branches, and the Federal
Executive, for the application of pressure to the Federal Council, and the pleblscite provisions in

‘ reserve, there are controls of significance.

32 .

Also, despite the width of subject matter with

respect to which rules may be made by the Federal

Council it is an important consideration that, in

a practical sense, the problem before the court

concerns only those rules which might

be made,

which although unacceptable to some members, are

not unreasonable oppressive

or unjust. Those

which are, offend

S 140(1) and are invalid

... All

the rules which are made reflect the view

of a

representative body and are thus the product of

system in which there is

a significant element of

democracy. Accordingly it is difficult to make

judicial finding that, in the absence of

conditions precedent to the exercise of the

authority of Federal Council

to amend rules and

make new rules, the rules

of the organization

contravene the provisions of

S 140(l)(c). In my

opinion no such finding could or ought to be

made.

Evatt and Morthrop referred to numerous authorities

JJ. delivered a joint judgment. They

I	i n relation to	S. 140(l)(c) an8
I

I	analysed in some detail the Full Court judgments in	Cook v.
!

Crawford. Their Honours expressly held that the opinions

" .

expressed in that case by Smithers

J. - in the Full Court

- and

I	by Evatt J. - at first instance - should be preferred to the	- .
!	.

reasons actuating Keely and Sheppard

JJ. in the Full Court: see

p. 519.	.	._
1 -

I have referred at

some length to the reasons in Hriqht

v. McLeod because it is important to determine whether there was

majority support in that case

for a principle which is

inconsistent witin the decision in Cook v. Crawford. Only Evatt

and Northrop JJ. said, in terms, that the latter declsion was

erroneous but both Bowen

C.J.

and Smithers J. adopted positions

incompatible with its correctness. In

v. Crawford Keely and

I,.

. I

I "

33.

Sheppard JJ. did refer to the plebiscite provisions in the rules but otherwise they did not engage in the task of identifying, and

weighing the significance

of, those features of the rules which

I	would be relevant to the determination of the questions whether the Federal Council was democratically controlled and whether the members had appropriate safeguards against abuses by Council of its power. The basis of their judgments was that rule amendment

._ -.

by a small committee, such as Federal Council, without reference

t >

to the membership, conflicts

with s.2(f) because it discourages

full participation by membes In an important affair

of the

organization. That absolute position cannot be reconciled wich

acceptance of the proposition, by each of the majority in Wriqht

v . McLeod, that - at least under some circumstances	- such a	' _ I
provision may be valid.

The applicants concede that

Full Court of thls Court

is not bound to follow

an earlier decision of

a Full Court. It

will, of course, usually

do so; perhaps even without permitting

the correctness of the earller decision to be re-argued: see

Pvneboard Ptv. Limited v. Trade Practices Commission

(1982) 39

A.L.R.

565 at p. 567, Federal Commlssioner of Taxation v. Kearnev

(1985) 85 A.T.C. 4183. But the Full Court which heard Wriqht

McLeod did permit argument

as the correctness

of the approach

taken in Cook v. Crawford. It would appear that the Chief Judge

took the unusual course of constituting	a flve member Court for
that very purpose.

34.

Notwithstanding their concession that the Court which

I	heard Wriqht v. McLeod could have overruled the earlier decision, the applicants submit that it should not be regarded as having

done so; because a majority did not expressly say that the

I .>

earlier decision was overruled.

In my view this is too stringent

I .

an approach. In Consett Industrial and Provident Societv Limited

I	i .
I

v. Consett Iron Companv Limited l 39223 2 Ch.135 the English Court

of Appeal had to determine whether its earlier decision upon the

precise question

now before it had been overruled by

intervening decision of the House of Lords. At pp.

166-167 Lord

Sterndale M.R. said:

"I think it essential to bear in mind the true

meaning of the case being overruled, because if

the decision

on the identical point before

arising out of the construction of the identical

Act is not displaced it binds

us although the

reasoning upon which the decision is founded may

have been

so disapproved and displaced

as CO make

the case no authority upon the construction

of a

distinguishable though somewhat similar Act. I do

not in the least mean

to say that the express term

overruled need be used, but the effect of the

decision of the Court must be such as to show that

the former decision cannot stand even

on its own

facts and in respect of the Act on

which it gas

decided. It is by no means uncommon for a superior Court to say that case which it is considering is wrong in its reasoning, and cannot

be used as

an authority in other cases,

but that

on its own facts it can be supported, and chis may

be expressed by implication as well

as expressly.

In such

a case the decision remains

an authority

on its own facts and circumstances, but they must

be the same, and a very slight difference will take a subsequent case out of the authority of the

former one.

35.

I	It	is	arguable	that,	in	Hriqht	v. McLeod,	Bowen C.J.
I

preserved the continuing authority - on its own facts,that is

upon the particular rule

- of Cook v. Crawford; notwithstanding

his adoption of reasoning inconsistent with that underlying that

decision. But this cannot be said in respect

of any of the other

judges constituting the majority in Wriqht

v. NcLeod. Smithers

S. clearly maintained and applied his dissenting position in

Cook

I ’

v. Crawford - see especially pp 494-495

- and, as

mentioned,

Evatt and Northrop

JJ said, in terms, that

ine majority position

in that case was erroneous. Applying the test enunciaced

5y Lord

Sterndale, it must be said that the effect

o the decision in

Wriqht v. McLeod is that Cook v. Crawford “cannot stznd even

its own facts and

in respect of the Act on which it was decided”.

I must determine the issue

of validity under

S . 140(l)(a) and (c)

by reference to the approach adopted by the

ma~ority

in WriqM v.

McLeod and disregarding the determlnation

of invalidity in

respect of a very similar sub-rule of this particular

organization in Cook v. Crawford.

There was no submission on behalf of the applicants

that, applying Wrlqht

v. McLeod, r. 27(4) should be held to be

! ’

invalid.

I think that this was realistic. It

is. true that

decisions of Federal Council

- including decisions relating to

rule-changes - may be made by

a simple majority. But Federal

Council consists of seven Federal Vice-Presidents and seven other

councillors (r. 21(1)) each

of whom is elected by a branch for a

’

‘3

term of two years (r.

48(1)).

As already Indicated, the voting

3 6 .

entitlement on Council of particular branches reflects the size

of the membership of that branch. There is

no suggestion that

I I

Council is itself undemocratic

in composition (cf. McLeish

(1978) 22

A.L.R.

547, Hodder v. Australian Workers Union

1	(Pincus J.,	2 August 1985, not reported). These factors ensure	a
1

high degree of accountability to the membership. Moreover, r.26	!..
I.

provides for a referendum of the members

of the organization, at

the instance of a majority of

tine members of any two branches

any two States attending

a special branch meeting, to consider

whether any decision of the Council shall be disagreed with; the

decision of the members superceding that of Councll. Some might

argue that the rules of the organization ought

CO make some

provision for direct participation

f members in rule changes or

that they should require

a two-thirds, or other extraordinary,

‘l

majority of Council to change the rules. But such arguments

would be contentions as

to desirability. It cannot be said that

, I

a rule permitting

a committee, constituted as is this Council,

itself to amend the rules of the organization is unreasona5le.

The Court must bear

in mind the principle that, subject to the

constraints imposed

by or under the

Act, it

1 s for the members of

the organization, and not for the Court, to

determine the content

‘ I

of its rules: see Wiseman v. Professional Radio and Electronics

Institute of Australasia (1978) 35 F.L.R. 24 at pp. 41-42,

Municipal Officers‘ Association

of Australia v. Lancaster (19811

37 A.L.R. 559.

In particular, it must be remembered that,

Deane J. pointed out in Lancaster at

p. 589:

“The Courr: has no

authority generally to supervise the content of the rules or to

'I	37.
I
1

I	require that the rules comply with what those constituting the	!.,
Court might see as preferable, desirable or Ideal."
!
I:

Finally,

applicants put a special argument. They say that, whatever may

be the reasonableness of a rule allowing Federal Council a

relation

ss. 140(l)(a) and (c), the

I	!	general power of amendment of the rules, special consideratlons	t I .
l .

arise in relation

to amendments which may affect

tine existence or

_ .

operations of branches. They rightly point out that the rules of	1
this organization make elaborate provision for the existence and

government of its branches and that branches play

a fundamental

role in the selection

of persons to manage the organization's

affairs at a national level. Branches may discipline members

(r.

13) and may settle local disputes

( r . 6 4 ) .

There is no question

I ,

, _.

of their significance. But it is another matter

to say that,

1 -

because branches are important, a rule which permits Federal

Council to amend the rules in such

a manner as adversely to

affect the contmued existence or operations of branches, or of a particular branch, is necessarily unreasonable. The submission is reminiscent of that put in Imlach v. Dalev (Evatt, Nortinrop

and Beaumont JJ., 23 April 1985, not reported), a case involving

the power of the National Council of the Hospital Employees'

Federation of Australia to alter the boundaries of the Tasmanian

branches of that organization.

The significance of those

boundary changes is graphically illustrated in the dissenting

judgment of Beaumont

J. but nonetheless Evatt and Northrop

upheld the validity

of the rule. They were not prepared to

1 .:

t i.

t. I:

38.

impose any special limitation

i relation to rule amendments

adversely affectng branches: see pp 11-16 of their joinr:

judgment, noting especially the statement at p.

13 in relation to

branches: ' I _ . . an organization, provided it complies with the

requirements of the Act, the regulations and

ir;s rules, is &le

to mould its internal structures

2 It thinks fit."

The decision in Imlach v. Dalev requires me to

re~ect

the suggestion that

a rule permitting

a committee, such

as the

' i

Federal Council in this case, to amend the rules

of an

organization in such

a manner as adversely to affect a branch

wlthout reference to that branch or to the general membership is

necessarily invalid. I do so gladly because it appears to me

that any other approach would result in rntolerable uncertainty.

The operations of

a branch, or of branches generally, might

I I

adversely affected by rule amendments

or: directly related to

their existence or operations.

The limits of Council's power

would be difficult to define. Moreover there

may be other

subject matters in the rules in relation to

which some will see

as strong a case for special requirements as to consultation

2 s

those relating to branches; for example the composition of the

supreme governing body, members' voting rights or the

qualifications required of candidates for office.

The adoptlon

of the applicants' submission in this case would lead to

cavalcade of invitatlons to members of the Court to impose their

own value judgments as to the significance of particular aspects

of the rules of organlzations. It is much more satisfactory to

Q	t "
t .
1 . ~
I

I .

I..

39.

eschew advance limitations	- save for the requirement that the	:
i

selected rule amending body be democratically controlled

- an to

consider in the particular case under

S . 140 any complaint chat

the resultant rule is unreasonable or other otherwise contrary to

law.

"he applicants further submit that

r. 27 ( 4 ) contravenes

S. 140(l)(d) in that it permits the abolition of

a branch without

-at the least - consultation wich the membership of that branch;

thereby, it is said, failing

"to provide f o r the autonomy of

branch in matters affecting members of the branch only."

Imlach v. Dalev it was held that

S . 140(l)(d) applies

o ~ l y

with

respect to organizations which, through State branches,

participate or seek to participate

in a State industrial and

conciliation system. Upon that approach it is difficult to apply

s.l40(l)(d) to the Plumbers and Gasfitters Employees' Union,

which in the two most populous States, lacked branches at the

relevant time. However, the facts recorded by Evatt

J. in Cook

v. Crawford show that, historically, the Sydney and Newcastle

branches of the organization had participated

m the New South

Wales industrial and conciliation system. I will assume,

therefore, for the purpose

of this submission that s.l40(l)(d)

has application to this organization.

In Morris v. Federated Liquor and Allied Industries Emplovees' Union of Australia

r '

(1978) 35 F.L.R. 60 the point was

made, at pp.68-70, that the failure

of a particular rule of

40.

organization to contain

a particular positive provision required

by the Act - for example by the second limb of s.l40(l)(a) or by s.l40(l)(d) -logically cannot result

in the invalidity of that

rule. Section 140 provides that the rules of

che organization,

considered as a whole, shall not fail to make the specified provisions. If there is an omission of a required provision,

tine

invalidity must attach to the rules as

a whole.

In this case it

is not argued that the rules, as a whole, are invalid. Xor are they. rmether one considers the version of the rules which

existed prior to 28 September

1984 or the version vhich resulted

from the purported amendments of that day, these rules

do provide

for the autonomy

of branches - that is, of those branches which

exist under the particular version

- in relation

to branch

matters. There is no warrant, in

my view, for reading into

S .

140(l)(d) a limitation upon the power

of tine rule amending body

of an organization to create or

to abolish - in accordance

witin

the normal procedure for rule amendments

- branches which, whllst

in existence, are autonomous and thus able to meet

the purpose

for which - according to Imlach v. Dalev to the Act. Evatt and Northrop

- S. 140(l)(d) was added

JJ said in that case at pp.

34-35:

'I...

paragraph (d) was not enacted for any purpose to affect relationships between

a organization

and its branches except to a limited extent where	l?
an organization, through its branches,	i
participated, or desired to participate, in State

industrial systems .... rt?hat is intended .._

that all matters arising out

f or in connection

with the participation

of a branch in a State

industrial system

in theory affects directly

members of that branch and it is in all those

matters where autonomy is to be provided

for, and

not in any other case.

In my view each of the contentions of the applicants relating to power should be rejected. It should be held that

k .,

I	'
.	..

r.27(4) was on 28 September 1984 a valid rule, authorizing

Federal Council to adopt the resolutions under challenge.

Participation b7 Sydney delesates

Mr Lane and Mr Batchelor, the two delegates of Sydney branch, participated in the proceedings

of Federal Council

relating to the abolition of the Newcastle and Geelong branches.

Mr Lane took a leading part in the discussion. Both delegates

voted for the resoluclons to achieve abolition.

The applicants

contend that they had

no right either to participate

or to vote;

that, at the time, Sydney branch was unfinancial. Rule

22(3) of

the organization, dealing with meetings of Federal Council

provides

"3.

Subject to the approval of a majority of Vice-Presidents and Federal Councillors representing financlal States or Branches,

Federal Vice-Presidents and Federal

Councillors representing unfinancial States

or Branches may take their seats on Council."

The rules contain representatives of unfinancial Scates or Branches but this

no express exclusion of

musc

be implied by

r. 2 2 ( 3 ) . No resolution of approval was passed in

respect of the meeting of

26-28 September 1984.

42.

The applicants do not contend that the Sydney vote was critical to the fate of any	L ,
.

of the resolutions. It is agreed

that the voting figures

are such as to provide a majority in

I . .

favour, after deduction of the Sydney vote, even for the

"in

principle" resolution of	26 September 1984, and. a fortiori the	L .
c -

resolutions of 28 September against which only the Newcastle

votes were cast. But it is argued that, nonetheless, the

participation of the Sydney delegates vitiated all

of these

decisions.

I think that it is correct to hold that, if the

Sydney branch was unfinancial at the time, the effect wouid have been to invalidate all of the relevant resolutions. Mr Lane was

the leading proponent of abolition, at least

of the Newcastle

branch.

He instigated the Sydney branch resolution and he moved

the motion for the	"in principle" decision in Federal Council on	..
_ .

26 September. It is true that the resolutions of

28 September,

including those which accually effected the relevant rule

amendments, were moved by others

- although some were seconded by

Hr Batchelor - but Council might well have regarded these

resolutions as doing	no more than carrying out	- and applying	to	:. ,
: ,

Victoria - the principle which had been established two days	r :-
- I

earlier by Mr Lane's successful motion. In Lynch

v .

Hodqes

(1963) 4 F.L.R.

348 the Commonwealth Industrial Court held to be

invalid a resolution of

a committee of management of

organization moved by a person who was subsequently held not to

be a member of the committee and tinerefore not entltled to

participate in its proceedings; and this notwithstanding that his

. . . . .	.	.	.	.. .	..
43.

vote was not critical. In that case the Court declined to say

that the active participation of

a stranger in a meeting

necessarily vitiated Its proceedings

- and see the Court's later

decision in Steuart v. Oliver

(No. 2) (1971) 18 F.L.R. 83 at p.

84 - but it was pointed out that the chairman of the meeting	r
!

should have declined to accept

the motion; and that,

had this

been done "it is impossible to say that the motlon would have

been moved by anyone else". This consideration was held to be

sufficient to vitiate the motion. Lynch v. Hodqes was applied by

a Full Court of this Court, in Allen v. Townsend 431 at p. 482, in relation to a motion carried unanimously but

( 1 9 7 7 )

31 F.L.R.

which was moved by

a person whom the Court held not to be

entitled to participate in the meeting.

In the present case the

critical resolution was moved by Mr Lane.

If the chairman had

rejected the motion on the ground that Sydney branch was

unfinancial and that the meeting had not granted approval under

r.22(3) to his participation, it is impossible to say thar the

meeting would have granted that approval

or, If not, that the

motion would have moved by someone else. Without Mr Lane's

advocacy of the motion, it is impossible	to say that, if noved,
it would have been carried.

Accordingly, it is necessary to consider whether Sydney branch was in fact unfinanclal at the date of the meeting. Rule

40 provides for the payment to branch secretaries or other

authorised branch representatives	of all enrolment	fees,	I
7,.

contributions, levies and fines

paykle by members. Rule 41

I	*
I
.l

44.

deal3 with the application of funds of the organization.

authorises, inter alia, the making of payments in connection wir;h

any matters provided for

by the rules. Rule 42 deals with the

management of branch funds

Sub-rules ( 6 ) and ( 7 ) provide for

the payment of what were during the hearing generaily referred to

as "capitation fees"

"6.

At the close of each financial period a sum

not exceeding twenty

( 2 0 ) per cent as decided

by Council of the total receipts from Branch contributions shall be paid into Head Office

prescribed funds, the balance remaining in

tine

Branch General fund

...

7. Notwithstanding anything contained in these

Rules, payments to Head Offlce shall be

t'ne

first charge on all Branch funds other than

those specially raised for specific

purposes.

The "financial period" referred to in sub-rule the branch financial period, which closes on

( 6 ) is

31 March each year:

. .

I	see r. 38.
I
I
I

I	Evidence was tendered relating to the financial position
i

of Sydney branch relative to head office. After their expulsion

on 2 May 1979 the Sydney officials continued to occupy the Sydney

branch office in Sussex Street and to retain custody of the

membership records. The federal secretariat, on behalf of the

Federal Council, set up a

new office in Pitt Street and appointed

two federal organizers to work from that office. Their

salaries, and the costs incurred

by the new offlce, were paid

from federal funds. Some income was received but it was

insufficlent to cover outgoings. That position continued even

. .

45.

after the 1981 elections. Head office continued to provide

financial support upon the understanding that Sydney branch would

repay the funds expended as and when it was able. These funds

were referred to in

the evidence

as a "loan" but, as the

respondents point out, they

do not really have that character.

In point of law the Sydney branch was which is the federal organization. There could	part of the legal entity	' -.
! .!

be no accion

law for recovery of moneys by one organ of -che legal entity against another. The payment made by the federal secrecariat

represented applications of

tine funds of the union

for a

particular purpose, the management of the Sydney branch. Such

applications were authorized by

r. 41(a). It is understandable

that Federal Council wished

to obtain an undertaking that Sydney

branch would, when possible, refund these moneys to the federal

fund but that undertaking could not constitute a legal

obligation.

A question arises

as to the meaning of the word

'unfinancial' in r. 22(3).

For the reasons I have expressed, the

word 'unfinancial' does not refer to the condition of being

liable at law. The term is not defined by the rules but it

1 ,

should be construed in the light of the rules.

The only respect

L .'

in which the rules impose

an obligation upon branches to pay

money to head office is in relation to capitation fees. Tie

rules make no reference to the sort of informal pay-back

arrangement which Sydney branch has made. The condltion

of being

'unfinancial' should, therefore,

be read as the condition of

nor:

I .

46.

having paid the capitation fees required by the rules.

This is a

familiar use of the word in the rules of voluntary organizations,

whether referring to the position of individual members	or of
component organs.

No question arises in relation to the payment by Sydney

branch of the capitation fees falling due in the years prior to

the financial year 1979/80. Neither is there any doubt that the

capitation fees for 1981182. 1982/83 and 1983184 were paid before

September 1986. The financial accounts for 1982/83 and 1983184

which were verified in evidence by Mr Gzry Grahame, the Sydney

branch auditor

- show the payment of the appropriate sums

ir,

respect of the first two of those

years, identified as "per

capita" payments, and quantify the amount

owmg for 1983/84. A

branch payment voucher and head office receipt shows

tinat t'ne fee

for that last year was paid on

16 July 1984.

Capitation fees for offices then operating. The Sussex Street obligation was

1979/80 were payable by both of the

$28,490. Pursuant to the order made by Evatt J. in Cook v.

Crawford, this amount was paid by three instalments between	5 May	.	-.
1981 and 3 August 1981.

The amount due by the Pitt Street office for the year

1979180 was $11,781.

For 1980181 the amount was $17,692, making

a total of $29,673. At a meeting held on 13 July

1982 the Sydney

branch committee resolved to conflrm its liabzlity for

tinese

47.

amounts and that they

be "incorporated as expenditure and

consequently as a liability to Head Office in the financial

statement for the nine months ended 31st March 1982." They were

added in the accounts to the amount of the funds expended by head

office on behalf of Sydney branch, thereby creating

total

"balance owing to head office"

- excluding the 1981187, capitation

fees since separately paid

- of $76,809. Between that date and

16 July 1984 two payments totalling $30,000 were made. They were

identified simply as "part payment of loan "or "payment off loan". If they should be regarded as payments of the outszanding capitation fees, it is obvious that all capitation fees were paid

prior to September

1984.

I -

I think that the two payments totalling applied in the first instance to capitatlon fees. Rule 42!7)

$30,000 must be

makes "payments to Head Office"

- that must mean paynents to hezd

office under the rules, or capitation fees

- a "first charge"

all branch funds other than those raised for

a specific purpcse.

It follows that the general branch funds applied

m reduction of

the overall obligation to head office were funds charged with

this specific obligation. It would not have been open to the

branch to tender those funds in satisfaction of its promise to

repay the funds expended by head office rather than

satisfaction of the burden with which they were charged. Those

funds, to the extent of $29,473, were impressed with

a particular

obligation and the payments, to that excent,

must be taken to

have been in discharge

of that obligation. The parties did not

! .

l -

48.

purport to

act upon a different basis

; on the contrary, according

to the evidence of

Mr Crawford, the "understanding was that the

first charge on all payments from the Sydney branch would be for

them per capita payments".

The general rule is that,

in a case where a person owes

money to another on

a current account

with a multiplicity

of entries and

a payment is made on account of the debt

generally without any appropriation by either debto-r or creditor to any particular item, the payment is deemed to be allocated to the discharge of debit items in the order in which they arose:

see Devavnes

v. Noble (Clayton's case)(1816) 1 Mer. 572 at pp.

608-609; Re Footmzn Bower

S. Co.Limited C19613 1 Ch. 443 at pp.

449-451. If, contrary to the view I have expessed, there was no

allocation by force of the rules or by the "understanding"

l	referred to by Mr Crawford	of that part of the $30,000 necessary
I

to discharge the capitation

fee, the application of this

principle would lead to the same result.

The 1979 /80 capitation

fee became due on

31 March 1980, by force of r. 4 2 ( 6 ) , and the

1980/81 capitation fee on 31 March

1981. Tnese dates were both

before the election of any Sydney branch officials capable

accepting the "obligatlon" to repay federal funds expended for

the benefit,of Sydney branch. The first formal repayment

commitment appears to have been

a further resolution of the

Sydney branch committee

of 13 July 1982.

i	I
I
l

I	b
I

---__

l	Upon the evidence it cannot be said that, at September 1984, Sydney branch was 'unfinancial' within the	26-28
1

meaning of r. 2 2 ( 3 ) .

Its representatives were not disquallfied

I	from taking their seats at the Council meeting held on those days. No invalidity arises from their participation in the relevant resolutions.

1 .

, .

F'.

Geelonq branch

- notice and natural

-justice

t - '

A s previously stated, tha decision

f t'ne Federal

Executlve to call the extraordinary meeting of

26-28 September

1984 referred only to the agenda Items submitced by Sydney

branch, which items related only to the future of Newcastle

branch, and to one other unrelaced item.

In fact, at the

beginning of the meeting, Council adopted

an agenda containing

several additional items. Even at this stage

no reference was

made to the Geelong branch.

The motion moved by Mr Lane on the

first day of the'meeting referred only to the posltion in New

South Wales. There is nothing in

the minutes of that day t3

suggest that any reference was made by any person to the

situation in Victoria. So far as appears, this subject first

came up on 28 September when Mr Crawford moved his motion to

"complete the circle" by establishing State branches in both New

South males and Victoria.

No notice of the resolution was given

i	to Geelong branch. The members of that branch had no direct representative on Council. They joined with members of Melbourne

i,;:

L '

branch in electing three persons to sit on Council. Under these

-50.

circumstances, tine applicants submit that the resolutions,

insofar as they affect the Geelong branch, are invalid: first,

because no notice of this subject matter was given to federal

councillors and, secondly, because Council afforded to Geelong

branch no opportunity to be heard.

Rule 2 2 ( 1 ) provides for biennial meetings of Federal

Council. Rule

22(2) provides that Council "shall meet at other

times and places as the Federal Council

or the Federal Executive

may determine". "here is provlsion,

in r.

2 2 ( 4 ) ,

for the

preparation and publication to branches of an agenda for biennial

meetings; although, even then, Federal Council can,at

a blennial

meeting and without notice to anyone,

add-any other matter to che

.-.

agenda which it considers to be urgent.

The rules make no

provision for

a published agenda

in relation to excraordinary

meetings convened under r. 2 2 ( 2 ) .

Notwithstanding that omisslon,

the applicants contend that

notice convening such

a meeting

must specify the proposed business and that the Council is

limited to that business at that meeting.

This is implied, it is

said, by r. 32(4)(f).

Rule 32 deals with the duties of officers

of the council. Sub-rule

(4) provides:

"4.

The General Secretary shall -

...

(f)	summon members to all meetings and give

intimation of same to all Branches;

. . . ' I

$ 9

.. .

51.

The applicants submit that

"members", as the

sub-paragraph applies to meetings of the Federal Council,

includes members of the Council and

that it is implied in the

word "summon" that the notice will state	he business to be
transacted.

There is authority for the propositlon that

a notice

summoning a meeting

of members of a branch,

in order E O be valid,

i	must sufficiently indicate the business intended	50 be
I
!

transacted: see Campbell

v. Hiqqins (1957) 3 F.L.R. 317 at 15.327,

Winter v. McAdam (1957) 1 F.L.R.

210 at p. 211, McLgre v.

Mitchell (1974) 6 A.L.R. 471 at p. 489. But these cases are

i	I	distinguishable from the present. As Evatt	J. pointed out in.
!

Cook v. Crawford at

52 F.L.R. 36, the reason for the rule is:

"to

enable any member receiving It to determine in his

own int-

vest

whether or not

he ought attend the meeting." Tnis reason has

little application to

a meeting of a committee whose menbers are

under an obligation to attend

a summoned meeting, not to protect

I	their own interests but to make decisions for	tint good government
of the union.

There are cases in which the rules

of an organization

require that a summons to by an agenda and that the business be limited to the items on

a meeting of a committee be accompanied

I	that agenda: see,	for example, Maqner	v. Fowler (1979) 46 F.L.R.
I

78 at p. 99. The evldent ob~ect

of such a rule is to enable the

summoned delegates to reflect upon the proposed business and,

1 I

52.

perhaps, to consult with those whom they represent as to the

position they should take

in respect of parcicular matters. As

pointed out, in relation to biennial meetings

of the Federal

Council of the Plumbers and Gasfitters Employees' Union, there is such a provision. There is no such provision in relation to

extraordinary meetings

and, in my new, the use of the word

'summons' does not by implication impose such a restriction.

say this for three reasons.

First, there is nothing in the

ordinary meaning of the word

"summon" to imply notlce of

business. The primary meaning

of the transitive verb cited

the Shorter Oxford English Dictionary is: "to call together by authority for action or deliberation". Stcondly, the ducy cast

upon the General Secretary by

r. 32(4)(f) applies as much to

biennial meetings as to extraordinary meetings of council. In

relation to biennial meetings the implication would conflict with

the express terms of

2 2 ( 5 ) permitting Council to consider

business not upon the published agenda. Thirdly, an implication

depends upon Intention. But the facr: that

2 2 ( 5 ) does confer

upon the Council in biennial meeting liberty to consider urgent

matters not upon the agenda indlcates that those responsible for

the form of the rules have not considered that the advantages of

reflection, and consultation, upon proposed agenda items should

outweigh the disadvantage of inflexibility which would result

c :

from such

a limitation. The view has been taken that Federal

Councll should be

free, in bienniai meetings, to determine

matters considered by it to

be urgent, although arising without

notice.

It is difficult to see any reason

why a different policy

I .

i . :

53.

should have been adopted by the draftsman	of the rules in respect
of extraordinary meetings.

In relation to the natural justice question the

applicants point out that the members of the organization are

organized into branches; as such they have rights and duties

under the rules vis a vis other members of the branch

and, in

common with those other members, vis

a vls the organization

as a

whole: see Allen

v. Tomsend (1977) 31 F.L.R. 431 at ~p 440-441.

They say that it follows that members

of a branch have a

legitimate expectation

in the maintenance of their branch and

that the rules of natural justice therefore require that those members be afforded an opportunity to be heard before the branch

is abolished. It is not contended

thar: the branch, as distinct

from its members, has any such right. This could not logically

be put. The branch is not

a legal entity but

a mere

administrative unit of the organization. The bcanch 1r:self is

incapable of harbouring any expectation, legitimate or otherwise.

There are examples of the application, during recent

years, of the requirements of natural justice to situations which

might not at one time have been thought to attract those

requirements. But, so far 8 s I am aware, there is not yet any

authority for the proposition that,

in considering an amendment

of the rules of

an organization such

as a trade union, the rsle

making body is bound by the rules of natural justlce

to give to

persons potentially affected by the amendment

a opportunity to

54.

be heard. As it seems to me, no such obligation

- at least in

relation to amendments affecting persons only in their capacity

as members, as distinct from

in some other capacity such as the

holder of an office or in relation to property interests

- hould

be imposed by the courts. Those who belong to

an rganization

have an entitlement that it be, and

an expectation that it will

be, governed in accordance

with its rules, as they are from time

to time. Those rules will normally, and

in the case of

organization registered under the Conciliation and Arbitration

- see req. 115(l)(d)(xiv) - must, contain provisions for amendment. The entitlement and leqicimate expectation of members

is that any amendments will be made in accordance wich those

provisions. In some cases those provisions may require advance

notlce to, or consultation with, members generally or particular

organs of the organization. In such cases those requirements

must be satisfied, but as a matter

of due process rather than of

natural lustice. mere such provisions have not been adopted,

there can be no

legitimate? expectatlon that, nonetheless, the

rule amending body within the organization wili act as if they

had been. The remedy for those who would wish to avoid

ill-considered tampering with any provisions in the rules which

they regard as having special importance is to attempt

to ensure

by rule amendment hat those provisions	may not be amended except
after appropriate procedures.

One cannot but the Geelong branch who izvour its continued independenc existence

feel some sympathy with those members of

55.

and who may feel disappointed at the decision of Federal Council

to abolish the branch wlthout prior public notice

or consultation

with branch representatives. But

I do not thmk that either of

these omissions results

in invalidity.

1 Newcastle branch: unauthorised purpose

Finally, it is said by the applicants that the decisions of Federal Council, relative to the Xewcastle branch, are invalid because, in participating in those decisions, Mr Crawford and

the representatives of the Sydney branch were actuated by

unauthorized purpose. No claim to that effect was made by

Masterson at the time

or, indeed, by the applicants

when, on

and 4 July respectively, they filed their Points of Claim in the

two proceedings. However, at the commencement of the hearing

counsel for the applicants obtained leave to amend the Points of

Claim, in each case,

so as to add such an allegation. The

alleged purpose was identified by counsel, upon the second day of

the hearing, as being

"in some way to punish the Newcastle branch

and its members and officers andfor to advantage the Sydney

branch". At various stages of the hearmg or;her motives were

suggested but they have not been pressed and

I think that the

I I

substantial question in relation to this aspect of the case is

whether the three named delegates were influenced by either

both of these motives.

56.

A threshold question arises as to whether the possession

of an ulterior purpose by three members of the Council would

vitiate the decision

of the whole Council. This matter has not

been argued; it has simply been assumed that it would. Without

deciding the point, and having regard

to the voting figures on

the "in principle" resolution

of 26 Septsmber and the leading

roles played in relation to the resolutions by Mr Crawford and Nr

Lane, I propose to proceed upon the same assumption.

Messrs. Crawford, Lane and Batchelor each gave evidence

as to the reasons why they voted in favour of che relevant

resolutions. Mr Crawford gave two main reasons: because chere

was no alternative proposal

as to how the reorgznization

of the

union could be achieved

- by which he explained that one of the

State union officials would have to work

in Newcastle; and

because a single State branch was che most suitzble form of

organization to meet the requirements of registracion under the

I .

I "

~ '.

New South Wales legislaion. Mr Lane gave similar reasons. In

relation to the first matter,

he said that he believed the rule

changes to be in the best interests of the organizatlon because

the changes "were necessary to implement

t'e agreement wit:? the

State union which agreement was the best agreement possible to

make with the State union

at that time. I believed that the

agreement with the State union was the only way

t o avoid conflict

between the 2 bodies in the future". He referred to the

difficulty of representation in the Industrial Commisslon

of Wew

South Wales of Newcastle members covered by Stace awards. He

57.

added two other reasons: complaints that

e had received from

members about the necessity to obtain transfer between branches

when moving across the branch boundaries in changing from one job

to another within New South males and "the combination of

resources makes for a smoother and more efficient administration

of the organization". Mr Batchelor simply said that

he believed

that the decisions were necessary to implement the agreement for

reconciliation between the federal organization and the State

union. Both

Mr Lane and

Mr Batchelor denied that their decisions

were influenced by considerations

of self-aggrandisanent. I

accept those denials.	.I
I .
r
1:

Nobody has contested Mr Crawford's

view that

reconciliation between the two unions was highly desirable, from

the viewpoint of the federal organization. Nobody

has suggested

that it might have been achieved upon terms better than those specified in the draft agreement considered at the stop work meetings. Those terms required that the federal organization

employ Messrs Shooter, Campbell and Gemaell. But Sydney branch

could not afford to employ all three men.

It followed that one

organizer had to be employed by Newcastle branch. But the

inlellhrs of Newcastle branch, at their stop work meeting of

June, had rejected that cou~se. Rule 26 provides that all

decisions, inter alia, of Federal Council "shall be binding on

F.,

the members and Branches of the Union".

This provision may

extend to permitting Federal Council to instruct

a branch that it

must employ a particular person as an organizer but such

a ourse

58.

might be thought unsatisfactory

in practice. The organizer would

be required to work under the direction

of branch officers and

branch committee initially opposed to his employment and possibly

further antagonized by the Council direccive. Any who might have

taken that view might well have concluded

that, if the agreement

with the State union

wzs to be implemented, the autonomy

Newcastle branch would have to

be sacrificed. The decision to

abolish a branch, over the issue of the employment

of one

organizer, is criticised in argumenr. as draconlan; but

if it is

aeeg

itE pj~13pey

- - c.oii.r,est, ,a6 r,he only appacent mrthcd of s.?.vir.g

the agreement, It is easily understarxiable.

IiI considering the question whether the evidence of

Flesst-5 Cr.am-ord,

Lane and Eatchelor relating to their reasons

f o r

voting should be accepted, it

s relevant to noce chat,

at no

stage, did

Nr Masterson or anyone else

from the Newcastle branch

suggest any alternative course

of action. On 9 May 1984 Er

Crawford went to Xewcastle

for the specific purpose of explaining

the 12 points adopted ir. the discussions with the State

representatives. Mr Masterson was left in

o dollbt of M r

Crawford's opinion that it would be essential to employ one of

the organizers in Newcastle. Weither then

nor ac any later time

did he attempt to argue that this would not

in faciz be necessary

and he conceded in his evidence in these proceedings that, to his

knowledge, Sydney branch could not bear the whole

of the burden.

Mr Crawford had mentioned to those present on

9 May the

possibility of abolishing the Newcastle branch but

he asked them

5 9 .

i	to consider what other options were available. It must have	je n
I
!	l
obvious that

Mr Crawford was inviting suggesLions as to

agreement could be implemented without affecting the status of

Newcastle branch. But no such suggestions were evec made, at

how the

that time or at any later time and despite the endorsemenL of the

agreement first by the Federal Executive and then by the Federal

Council. The threat to Newcastle was implicit in those

endorsements. It became explicit on

l4 August when Sydney branch

resolved to request

ine rule amendments necessary to abolish

Newcastle branch. Still

no aiternative was suggested. At the

Federal Council meeting itself Mr Lane invited

suggesti~s

from

Mr Masterson.

He received none. It is not difficult to see why

those members

of Federal Council who placed primary importance

upon the implementation

of the re-unification agreement

- as did

Mr Crawford, Mr Lane and

Mr Batchelor - shocld have concluded .

that they had no alternative	ot'ner than to support the
resolutions.

During the hearing some questions were asked relating to

the questlon whether

in fact there was any alternatlve. That

question is of little significance. The fact that there exists

an alternative, unperceived by anybody at the time, logically

cannot affect the acceptability

of evidence by a wiczess that he

voted in a particulcir manner because at that time

h saw no

alternative. But, in any case, the only alternative eventually

pressed was the posslbilicy of Sydney branch iaposing upon its

members a special levy to raise the salary for the additional

60.

-._._.

organizer: see r. 1 2 ( 4 ) .

Mr Lane said that this possibility did

not occur to him at the time but that, in any event, there was

already a levy imposed upon members. Upon

tine evidence, and

given the attitude taken

by the Newcastle members,

l t appears

that Federal Council

had, in a practical sense, little

choice but

to take the course which

it did. Mr Masterson's attitude ac the

stop work meeting was that

e would not attempt to influence the

decision of the members but would faichfully

carry out their

decision. From one point

of view, this attitude may be regarded

as laudable; but there are occasions upon whlch leadership must

be offered if disaster is to be avoided.

The subsidiary reasons advanced by Mr Crawford and Lane received little attention at the hearing. They were not

suggested t o be the primary cause

of the atcicude of these

officials but I accept that they were generally held.

That such

reasons might fairly be regarded as

legitmate is indicated by

the almost unanimous decision

f the Council to abolish the

Geelong branch and have but

a single branch

in Victoria.

I	The evidence affords	no basis for che conclusion thac Mr	1 -
r .

Crawford, Mr Lane or Mr Bachelor were actuated by any imFroper purpose in voting in favour of any of the relevant resolutions.

This ground of challenge must also be

re~ected.

61.

Discretion

Counsel for the respondents submit that, If

I were of

the dpinion that any of the resolutions were invalid upon formal grounds - the disqualification of the Sydney delegates, the lack

of notice regarding the Geelong resolution or the failure to give

to Geelong members

an opportunity to be heard

- I should

nonetheless refuse relief upon discretionary grounds. Counsel

point out that they appear on behalf of

all members of the

Federal Council, other than Mr Masterson, and that their cllents desire to maintain the decislons. The alleged defects jeing curable by Council, it is said that no good purpose wouid be served in compelling reconsideration.

In the view question of discretion does not arise.

which I take the resolutions ace valid.

I express no concluded

view, but I doubt that I would have been persuaded to take the course urged upon me. It is not possible to

kn w whecher,

upon a

reconsideration of

tine matter and after hearing anything further

I. -

that might be put to them, a majority of the members

of Council

would wish to adhere to the earlier decisions. And in any event,

as in the area of public administrative law, it is itself

important matter that decisions affecting others be made only

accordance with

tine law.

62.

!	Orders
!

The proceedings have failed but the case for the

appl-icants was clearly arguable. Tnese are not cases

in which it

' 7

/7< may be said that the proceedings were instituted vexatiously or

i	without reasonable cause. Accordingly, by force of S. 197A of the Conciliation and Arbitration Act, costs may not be awarded:

1 see Brophv v. Mapstone (1984) 56 A.L.R. 135, Marsh v. Bdamson

(Full Court,

29 March 1985, not reported).

'	I
/

The interlocutory in~unctions staying the elections in respect

made on

30 April 1985,

of the new branches, will be

dissolved and the Rules to Show Cause will be discharged.

I certify that this and

theskf-,,f%e-(6/)

preceding

pages

are

a true

copy of the Reasons

for

Judgment herein of his Honour

Mr Justice Wilcos.

i ' Associate: q

Date:

4 October 1985

Counsel for the Applicant:	Mr R.J. Burbidge QC; Mr	.
Moore, Mr L. Katz.

Solicitors for the Applicant:

Messrs Ryan Carllsle

Neezhaham

Thomas

Counsel for the Respondents:

Mr R.C. Kenzie QC; Mr A. Horth

Solicltors for the Respondents:

Messrs W.G. McNally

& Co.

Date(s) of Hearing:	15/7/85, 16/7/a5, 17/7/85,
1	18/7/85, 2/8/85, 9/8/85,

13/9/85.

. ..

. _

[1985] FCA 508

4 Oct 1985