Carter, R.A. v Rock, A

[1987] FCA 460

Re: ROY ARTHUR EDWARD CARTER
And: ARTHUR ROCK; THOMAS EVERS; CHARLES MARKS; JOHN KING; MICHAEL SEBOA; DAVID
WEST; TERRENCE BROAD; ARTHUR SHAWYER; RODNEY ULPH; JOHN MOSS; BARRY HUGHES;
JAMES BENNETT; ROGER GRAY; GARETH LEWIS; EDWARD LUK and J. WHEATLEY
No. WA3 of 1985
Industrial Law
21 IR 315

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
French J.(1)

CATCHWORDS

Industrial Law - rules - performance and observance - member seeking information re secretary's personal expenses - union executive resolution - summons to member to attend executive and explain and answer questions on enquiry - resolution to hear charge against member for failing to attend executive - no express power - whether within management power - whether implied power - resolutions ultra vires.

Conciliation and Arbitration Act 1904 s.140(1)(c), 141

Pole v. The Musicians Union of Australia (1953) 78 CAR 65

Porter v. Dugmore (1984) 7 IR 220

Gordon v. Carroll (1975) 27 FLR 129

HEARING

PERTH

#DATE 25:8:1987

Counsel and solicitor for the Applicant: Mr P. Gethin

Counsel for the Respondents: Mr V. Hockless

Solicitors for the Respondents: Kott Gunning

ORDER

The respondents do perform and observe the rules of the Australian Tramways and Motor Omnibus Employees' Association by treating as ultra vires and void the resolutions passed by the respondents of and concerning the applicant on 14 August 1985, 18 September 1985 and 13 November 1985.

The respondents and each of them be restrained from proceeding to hear and determine any charge against the applicant to the effect that he failed to comply with resolutions of the respondents made on 14 August 1985 and 18 September 1985.

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

JUDGE1

Mr Roy Carter is a bus driver employed by the Metropolitan Passenger Transport Trust. He has worked out of the Trust's Joondalup Depot for the past 3 years.

1. He is a member of the federal union known as The Australian Tramway and Motor Omnibus Employees' Association and registered under the Conciliation and Arbitration Act 1904.

2. In March, April and May 1985, he represented the Joondalup members on the executive of the Western Australian Branch of the Association.

3. On 11 August 1985 he wrote a letter to the secretary of the W.A. Branch, Mr Tom Evers, asking that he provide details of his personal expense account for the financial year 1 July 1984 to 30 June 1985.

4. Mr Evers replied that he did not have a personal expense account. His executive went further and resolved:-
   
   

"That Mr R. Carter be required to attend the September Committee Meeting to explain in detail his request for information on the Secretary's personal expense account."

1. That resolution which was passed on 14 August, was conveyed to Carter by a letter from the secretary dated 15 August. The meeting in question was to be held on 18 September at 9 a.m.

2. Carter responded in writing to this advice with an expression of incredulity and renewed his request for information:-
   
   

"The information I require in regarding the personal expenses incurred by the Secretary on his trips to the Eastern Stated on Union business.(sic) I would like to see a copy of receipts for the financial year 1984/1985 for air expenses, Hotel, food, taxis, and any other expenses used by him for his trips to the Eastern States."

1. The reply was considered at the meeting on 18 September, which he did not attend. A further resolution was then passed:-
   
   

"That this Committee summons R. Carter to the October Committee Meeting to explain his request for the Secretarys personal expenses. (sic)"

1. Carter was informed of this resolution also but did not attend the October meeting.

2. At a meeting held on 13 November 1985, one of those present, Mr Edward Luk, gave notice that he would charge Carter under rule 42(b) of the Association Rules for failing to comply with the two resolutions.

3. On that date, the committee resolved to hear and determine the charges at a meeting to be held on 11 December. On 19 November notice to that effect was given to Carter.

4. On 9 December 1985 on Carter's application, Toohey J. made an order whereby the executive members were required to show cause why orders should not be made:-
   
   

"1. That the Respondents perform and observe the Rules of The Australian Tramways and Motor Omnibus Employees Association in the following respects:-

(i) By not proceeding on the 11th December, 1985, or on any subsequent date to hear or determine the charge lodged by the Respondent Edward Luk against the Applicant alleging that the Applicant failed to comply with two Resolutions of the Respondents on the 14th August, 1985, and the 18th September, 1985.

(ii) By treating as ultra vires null and void the Resolution of the Respondents or some of them made the 14th August, 1985, requiring the Applicant to attend the September meeting of the Perth Branch Committee of Management of The Australian Tramways and Motor Omnibus Employees Association to explain in detail his request for information on the Respondent Thomas Evers' personal expense account;

(iii) By treating as ultra vires null and void the Resolution passed by the Respondents or some of them on the 18th September, 1985, summoning the Applicant to the October meeting of the Committee of Management of the Perth Branch of The Australian Tramways and Motor Omnibus Employees Association to explain the Applicant's request for the said Thomas Evers' personal expenses;

(iv) By treating as ultra vires null and void the Resolution passed by the Respondents or some of them on the 13th November, 1985, to hear and determine a charge by the Respondent Edward Luk against the Applicant alleging failure by the Applicant to comply with Resolutions of the Respondents or some of them made the 14th August, 1985, and the 18th September, 1985."

1. On the same day an interlocutory injunction was granted by his Honour restraining the members until further order from proceeding to hear and determine the charge laid by Luk.

2. That injunction is still in force.

3. Directions were given in February 1986 which required the filing of points of claim and defence and other interlocutory steps.

4. The points of claim set out the sequence of events as already outlined in these reasons and, as is apparent from the admissions in the defence, that chronology is not in dispute.

5. What is in issue is whether, as Carter claims, the resolutions of 14 August, 18 September and 13 November are beyond power, or as the members of the executive contend, made in the proper and lawful course of the management, control and direction of the affairs of the branch.

6. Carter seeks an order under s.141 of the Conciliation and Arbitration Act 1904 directing the executive to perform and observe the rules of the union by treating as ulta vires and void the resolutions passed by the respondent and a permanent injunction in the terms of the existing interlocutory order.
   The Purpose of the Resolutions
   
   

7. Mr Arthur Rock, the President of the Association, told the Court that he had chaired the meetings of the executive on 14 August and 18 September.

8. It was apparent from what he said that the executive was concerned to find out what lay behind the request for information about the secretary's expenses.

9. The request had touched a sensitive nerve coming as it did at a time when there had been, what Rock described as "problems within the Association federally with regards to the New South Wales secretary where he had misappropriated airfares". A similar allegation had been made against the Federal Secretary who, after investigation, had refunded an airfare due to him.

10. Between the August and September meetings Rock received a telephone call from one Max Neilson, a member of the Association at the Joondalup depot. Neilson told him of a meeting of Joondalup members at the nearby Beldon Tavern where there had been discussion of an attempt to "get" the secretary for misappropriation of an airfare.

11. Rock passed that information on to the executive.

12. He rather ingenuously suggested at one stage in his evidence, that the object of the resolutions was to have Carter come before the committee with his questions so that they could be put where records were available to enable them readily to be answered.

13. It is plain enough, however, from the terms of the executive resolution as well as Mr Rock's evidence, that the principal objective was to determine what, if anything, lay behind Carter's enquiries.

14. The primary question for decision is whether the executive had the power to compel his attendance at its meeting for that purpose.
    The Rules of the Association
    
    

15. The objects of the Association are set out in rule 4:-
    
    

"(a) To uphold the rights of combination of labour, and to improve, protect and foster the best interests of its members.

(b) To take all necessary steps for the protection and safety of the members in the course of their occupations.

(c) To take the necessary steps and actions under any Industrial Arbitration Act, or other Act, or otherwise for the purpose of securing satisfactory industrial conditions in respect of the remuneration of labour, the hours of labour, the age of employees and other conditions in or about their employment.

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(f) To use all reasonable and proper means to redress all grievances to which the members or any employees are now, or shall at any time hereafter, be subject.

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(j) To assist kindred unions, to provide for the acquiring of property and to do all things conducive to the welfare of members and working class organisations."

1. Admission to membership is governed by rule 5 under which a person who has signed an application form and paid requisite fees is deemed to be a member.

2. Rule 11 gives to every member interested in the funds of the Association the right to inspect the books and list of members at reasonable times during office hours.

3. Supreme control of the Association is by rule 12, vested in an Australian Council which meets at least annually in the month of March.

4. The Association is organised into branches under rule 25 which provides:-
   
   

"For the purpose of assisting the Australian Council in carrying out the objects of the Association, and also for administering the business and affairs of the Association and its members, which are more particularly of local interest and importance, Branches of the Association shall be formed. No Branch shall have power to affiliate with any other organisation or Association whatever, except by resolution of the Australian Council."

1. Branch affairs are run by a general meeting of members and by a branch executive whose powers are referred to in rule 30:-
   
   

"The affairs of the Branches shall be managed, controlled or directed by the General Meeting of members and subject thereto by the Executive. The Executive shall meet monthly or oftener, as may be required, and shall consist of Branch Officers and representatives from the several depots, sheds, or groups of employees, as decided by resolution of the Branch. The Executive shall have power to suspend any of its members for dereliction of duty, and shall report its proceedings to the next meeting of the Branch. It shall have power to convene Special General Meetings of members of the Branch by resolution.

The Executive shall not act contrary to any resolution or direction of a General Meeting of the Branch, and shall not alter, rescind or vary any such resolution or direction.

The Branch Executive shall have power to create group or depot committees, which shall not act contrary to the rules of the Association. All members who nominate for the position of Depot Committeeman shall be accepted as members of the Depot Committee. All decisions of such committees shall be subject to ratification by the Branch Executive or a General Meeting of members of the Branch.

The Executive shall have power to authorise the payment of the usual ordinary administrative expenses of the Branch and not more than $1,000.00 at any one meeting for any purpose specified in the "Objects" of the Association. Any proposal to expend money for special purposes beyond that specified above shall be submitted to a Special Meeting of the Branch of which at least seven days' notice shall be given, and the notice of such meeting shall state the reason and the nature of such expenditure, and such expenditure shall not exceed five per cent of the funds of the Branch. When special collections are taken up such funds shall be paid into a separate Trust Account. The Executive shall have power to institute a ballot at any time upon any question affecting the interests of members, including any decisions of General Meetings of members, but the result of such ballot may be rescinded only by a further ballot of financial members. The Executive shall conduct the business of the Branch between General Meeetings and may exercise any or all of the powers vested in a Branch General Meeting.

Financial members shall have the right to attend meetings of the Branch Executive, and, subject to the consent of the Executive, shall be granted the right of audience at such meetings.

The Branch Executive shall have the power to expend any sum for legal expenses for the protection of any member in connection with any Arbitration or Court proceedings any such sums shall be deemed to have been disbursed for an ordinary purpose.

The Branch Executive may appoint Industrial and/or Finance Committees to investigate industrial or financial matters and the findings of such Committees shall be reported back to the Branch Executive for endorsement or otherwise."

1. The executive of the W.A. Branch of the Association is also known locally as the Committee of Management.

2. Membership discipline is regulated by rule 42:-
   
   

"Any member may be charged by any other member with any of the following charges, namely:

(a) that he failed to observe any rule of the Association or any Branch;

(b) that he has knowingly failed to observe any lawful resolution of the Australian Council, the Australian Executive, or of the Branch Executive or Branch General Meeting of the Branch of which he is a member;

(c) that he has worked in contravention of any award, order, or agreement.

Any such charge must be laid in writing before the Branch Executive of the Branch to which the member charged belongs.

The Branch Executive may summon the member charged to appear before the Branch Executive or the Industrial Committee to answer the charge and also the member who laid the charge to press it. The summons shall specify the charge, which shall be forwarded by post to the members concerned at their address as registered in the books of the Union. Each summons shall be deemed sufficient if posted 14 days or more prior to the date of the meeting of the Branch Executive. The member charged shall be entitled to particulars of the charge. Should the member charged not attend, the charge may be investigated in his absence, unless a satisfactory excuse for his absence has been received. Should the member who laid the charge not attend he may be fined unless a satisfactory excuse for his absence is given. The Executive or Industrial Committee will hear evidence and representations submitted by the parties concerned and after arriving at a decision will inform the parties concerned as to the result of the finding. The Branch Executive shall in all cases make the final decision re penalty or otherwise. If the Executive finds the charge not proved and, further, finds thay t the charge was frivolous, it may impose a fine on the member who laid the charge of not more than $10.00. If the Executive finds the charge is proved it may impose such penalty, if any, as it considers is warranted. The penalties which may be imposed are:

(1) Fine of not more than $100.00 and/or

(2) Expulsion from the Association.

Any member aggrieved by a decision of the Branch Executive may lodge an appeal with the Secretary within seven days of such decision. The appeal shall be heard by the next ordinary general meeting of the members of the Branch concerned.

If any member is aggrieved by the decision of the General Meeting which dealt with the appeal, he may appeal to the Australian Council by lodging an appeal with the Branch Secretary, which shall be forwarded to the Federal Secretary. If the General Meeting lapses or fails to deal with the appeal the member may lodge an appeal within seven days after the date of the General Meeting with the Branch Secretary, who shall send it to the Federal Secretary to come on before the Australian Council. The appeal shall come before the Australian Council, which may uphold or dismiss the appeal or vary the findings and/or the penalties and its decision shall be final. It shall be the duty of the officers of the Branch or the Association to expedite all appeals. the appeal to the Australian Council may be dealt with by postal vote."

The Power to Summon a Member

1. There is no rule which in its terms expressly enables the executive to require the attendance of a member before it to explain his or her conduct.

2. A rule framed in such general terms has been held to be tyrannical and oppressive and to impose unreasonable conditions on membership - Pole v. The Musicians Union of Australia (1953) 78 CAR 65.

3. In the absence of a specific power to summon members other than for disciplinary purposes, the enquiry must be directed to general management powers.

4. Rule 30 confers upon the executive the power, subject to the General Meeting, to manage, control and direct the affairs of the Branch.

5. It is authorised by the same rule to "conduct the business of the Branch between General Meetings", and "may exercise all or any of the powers vested in a Branch General Meeting".

6. Its authority must be taken to extend to the discharge, in accordance with the objects, of those functions expressly contemplated by the rules.

7. Upon an examination of the rules, they include the following:-
   
   

1. Processing membership applications (rule 5)

2. Receiving and banking fees, contributions and levies (Rule 5), recovery of arrears (rule 8) and determination of exemptions (rule 9).

3. Alteration in contribution rates (rule 7(b)).

4. Nomination of persons for honorary life membership and suspension of such membership (rule 6).

5. Maintaining books and a list of members for inspection by members (rule 11).

6. Requisitioning action by the Australian Council (rule 12(q)).

7. Payment of allowances to delegate to the Australian Council (rule 14).

8. Resolution of industrial disputes by conciliation (rule 29) and report of dispute to Federal Secretary (rule 27).

9. Creation of group or depot committees (rule 30).

10. Authorisation of payment of usual, ordinary, administrative expenses of the Branch (rule 30).

11. Institution of ballots on questions affecting the interests of members.

12. Expenditure of legal expenses to protect any member in arbitration or court proceedings (rule 30).

13. Determination of secretary's salary (rule 33).

14. Suspension or dismissal of branch officers or members of the Executive (rule 36).

15. Appointment of auditor (rule 39).

16. Appointment of returning officers and resolution of protests or objects in relation to Branch elections (rule 41).

17. Disciplinary proceedings (rule 42)

18. Imposition of levies (rule 43).

1. The range of the management power may be given some definition by reference to these specific functions and to the objects of the Association.

2. Consistently with that definition the power is a broad one. It is no part of the function of the Court on an application such as the present to decide whether it might have been exercised in a more appropriate way, or whether it should have been exercised at all.

3. The question is whether, assuming the validity of all relevant rules, the resolutions now under challenge were within that or some other power.

4. In addressing that issue the following questions can be posed:-
   
   

1(a) What is the true construction of the rules conferring the power relied upon?

(b) As an aspect of the first enquiry, is there any implied term of the rules prohibiting the purported exercise of the power in question?

- Porter v. Dugmore (1984) 7 IR 220 at 129.

2. If the express rules do not extend to authorise the resolutions in issue, is there any implied rule which will authorise them?

1. In construing the rules, it is appropriate to have regard to the nature of the Association as a corporation created by law for special purposes. The consensual element in the relationship between the members and the Association itself is also to be taken into account - Porter v. Dugmore (supra) at 127-128, Gordon v. Carroll (1975) 27 FLR 129 at 155.

2. The resolutions by which the executive required and summoned Carter to attend at its meetings and explain his requests were, if valid, passed in the exercise of coercive powers involving a significant interference with his liberty.

3. In the present case the respondents were asked for particulars specifying whether it would be alleged that the resolutions were made pursuant to express or implied powers of the executive. In answer they said:-
   
   

"As part of the general power of the Executive under Rule 30 there is an implied power to administer the affairs of the Union by inter alia calling upon Union members to attend meetings of the Executive to explain their conduct, such implied power being incidental to and required for the proper management and control of the affairs of the Branch."

1. These particulars seem, with respect, to confuse the processes of construction and implication.

2. If the passing of the resolutions was an exercise of "part of the general power of the Executive under Rule 30", then they lay within the scope of the express authority to manage, control and direct. It is only if they did not fall within that express power that any question of implication arises.

3. The formulation of the power relied upon by the respondents is very wide.

4. It would, literally read, allow the executive to call upon its members to explain conduct whether or not it related to the affairs of the union.

5. So wide a power would travel outside the scope and purpose of the organisation. The formulation is, having regard to the objects and the rules, insupportable - Porter v. Dugmore (supra) at 131.

6. If the rules did confer such a power there would be a serious question as to its validity having regard to the provisions of s.140(1)(c) of the Conciliation and Arbitration Act 1904 - Pole v. Musicians Union (supra).

7. To do justice to the case however, the enquiry into the validity of the resolutions must ascertain the least power necessary to support them and whether it is an incident of management or otherwise arises by implication from the rules.

8. The subject matter of the management power is "the affairs of the Branch" and its content is the management, control and direction of those affairs.

9. The requests made by Carter related to the conduct of the secretary in the discharge of union business. It therefore related to the affairs of the Branch.

10. The fact that he made the request was also part of the affairs of the Branch. So too was the possibility adverted to by Rock that underlying the request was a degree of animosity between the Joondalup Depot members and the secretary.

11. On that basis and as a matter of literal interpretation, it would be open to argue that in summoning Carter to attend before them, the members of the executive were engaged in the management, control and direction of the affairs of the Branch.

12. That literal interpretation of the rules would encompass quite draconian measures. All that would be required is that they operate upon the subject matter of the power and answer the description of management control or direction in relation to it.

13. There are, however, limitations on the power which compress it well within the boundaries of literal interpretation.

14. The constitutional context in which it is conferred imposes its own limits.

15. It is significant that the only rule expressly conferring a power to summon members to attend before the committee is rule 42 relating to the hearing of charges laid by one member against another.

16. Notably there is no independent obligation under that rule to attend in answer to the summons. If the member does not attend, the charges may be investigated in his absence. He is not to be punished independently for that absence.

17. And if he does attend, he is not required to say anything. He is entitled to adduce evidence in his defence and to make representations, but there is no obligation to answer the charge or charges.

18. Having regard to these limits on the power given in disciplinary matters by rule 42, it would be surprising if the management power under rule 30 were, sub silentio, to entitle the executive to require members to attend before it and to answer questions put to them, even if the subject matter of the enquiry related to the affairs of the Branch. If such a power exists, then any disciplinary hearing under rule 42 could be preceded by an inquisition under the aegis of the management power at which the member concerned would be required to attend and required to answer questions.

19. Such an extension of the management power is not justified by anything in the specific functions with which the executive is charged and to which reference has already been made.

20. Nor in the absence of a rule expressly conferring such a power, is it consistent with the consensual element of the relationship between the members and the Association that the making of an enquiry relating to the affairs of the Association should attract the imposition of an obligation to explain why that enquiry was made.

21. This is not to say that a rule could not be devised which would entitle the executive under defined circumstances, to require the attendance of members before it to provide information relevant to the administration of the Branch.

22. As to whether such a rule would transgress the provisions of s.140 of the Act, I express no view.

23. In the end however, I conclude that, having regard to the significant coercive character of the power asserted and the narrow scope of the disciplinary provision in rule 42, the specific functions conferred on the executive by the rules and the consensual nature of the relationship between the members and the Association, that the management power vested in the executive did not authorise it to pass the resolutions of 14 August and 18 September 1985.

24. These considerations weigh with equal force against the implication of any such power.

25. It follows from that that the basis for the charge laid by Mr Luk falls away, as does the basis for the resolution of 13 November.

26. The granting of relief under s.141 of the Conciliation and Arbitration Act 1904 is discretionary.

27. Having regard to the consequences that might be visited upon Mr Carter should that relief not be granted, it is appropriate that I exercise the discretion in his favour. In the circumstances I am prepared to make the orders that he seeks.