Imlach v Daley

IMLACH v. DALEY and Others (1985) 7 FCR 457
Industrial Law
11 IR 23

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Evatt(1), Northrop(1) and Beaumont(2) JJ.

CATCHWORDS

Industrial Law - Registered organisation - Branches - Rules - Power of National Council to amend and alter rules affecting the boundaries of a branch - Whether specified rules or rules in a specified respect contravene s.140(1) of the Conciliation and Arbitration Act 1904 (Cth) - Branch autonomy - Conciliation and Arbitration Act 1904 (Cth), ss 140(1)(d), 141.

HEADNOTE

The Hospital Employees Federation (the Federation) is an organisation registered pursuant to the Conciliation and Arbitration Act 1904. It has two branches in Tasmania: the No 1 Branch and the No 2 Branch. Until 1984 the No 1 Branch covered all but the north-east corner of the State (which was covered by the No 2 Branch) and had approximately 3100 members. The No 2 Branch had approximately 1600 members. In 1983 the National Council of the Federation altered the relevant rule by allocating the southern half of Tasmania to the No 1 Branch and the northern half to the No 2 Branch. Because of the change 2250 numbers remained in the No 1 Branch and No 2 Branch had its numbers increased to 2450. The alteration was effected in accordance with the express provisions of the rules dealing with procedures for rule changes.

Held: (1) (Beaumont J., dissenting) The alterations were effected in conformity with rules of the Federation.

(2) Per Beaumont J: On a proper construction of the rules there was an implied limitation on the power to alter the rules to the effect that this power would not be used for the purpose of elimination of a branch or for the purpose of inhibiting or impairing the capacity of a branch to function. The boundary change was of such a nature as to undermine both the existence of the No 1 Branch and its capacity to function.

(3) (Beaumont J. not deciding) The word "and" appearing between the two limbs of s.140(1)(d) of the Conciliation and Arbitration Act 1904 is to be read conjunctively. It joins the two limbs into a single requirement. The result is that s 140(1)(d) applies only with respect to organisations which, through branches, participate or seek to participate in a State industrial conciliation and arbitration system. No organisation, including the Federation, so participates or seeks to participate. There could therefore be no basis for alleging that any of the Federation's rules contravened s.140(1)(d).

Mapstone v. Maynes (1983) 4 IR 198 and Krantz v. Federated Clerks' Union of Australia (1984) 5 FCR 416, overruled.

HEARING

1984, November 28-29; 1985, April 23. #DATE 23:4:1985
APPLICATION

Applications for orders under ss 140 & 141 of the Conciliation and Arbitration Act 1904.

P J O'Callaghan QC and T J Ginnane, for the appellants.

R C Kenzie QC and S R Marshall, for the respondents.

Solicitors for the appellants: A J Macken & Co.

Solicitors for the respondents: Maurice Blackburn & Co.

RRST

JUDGE1

23 April 1985
EVATT AND NORTHROP JJ. This appeal raises important questions relating to whether the rules of the Hospital Employees' Federation of Australia (the Federation) empower the National Council of the Federation to alter the boundaries of the Tasmanian branches of the Federation with the result that some members of the Federation are transferred from one branch to another branch. If the rules so empower the National Council, the further question is raised whether those rules are in conformity with s.140(1) of the Conciliation and Arbitration Act 1904 (the Act).

The Federation is registered under the Act as an organisation of employees. The rules of the Federation constitute the National Council and, subject to the rules and the supreme control of the Federation, which is vested in its members, the National Council has the management and control of the affairs of the Federation; see r.13. One of the particular powers conferred upon the National Council is the power to alter the rules of the Federation; see r.13(b). Rule 31 is headed "Alterations to Rules". Rule 31(a) is set out:

"(a) Subject to Rules 35(a) and 36, of these rules, the power to make new rules or to add to, amend, rescind or otherwise alter these rules shall be exercised by and at a meeting of the National Council."

Subrules (b) and (c) are procedural in nature. Subrule (d) relates to a specific matter not relevant for present purposes.
Rule 35 is headed "Rights of Branches". Rule 35(a) is set out:

"(a) All Branches shall be completely and absolutely autonomous within the ambit of these Rules, and shall be responsible for their own government and administration. The Branch shall be the basic unit of the Federation, and shall possess full and adequate powers to conduct its own affairs and to seek its objectives under the Rules. The control of the Branch resides exclusively in the members of the Branch, who shall be bound by these Rules. This Rule can never be altered except by a ballot of all financial members of the Federation. Such alteration to be carried must receive a majority vote of two thirds of the financial members of the Federation."

There is no need to make express reference to subrr (b) and (c) at this stage.
Rule 36 is headed "Branch Rules". Rule 36(a) is set out:

"(a) Subject to clause (b) of this rule, each Branch shall be governed in accordance with the Standard Branch Rules (with the necessary insertions) set out in Schedule A hereto."

Schedule A to the rules contains the Standard Branch Rules applicable to each branch of the Federation. Under rr 36(b), (c) and (d) and under the Standard Branch Rules, the Committee of Management of a branch or the members by referendum have power to make rules for the internal management of the branch and may alter those rules. Where that is done, the details of the relevant resolutions are to be forwarded to the National Secretary who is required to seek certification of those rules by the Industrial Registrar, and those rules, upon certification, are to be inserted in Sched B to the rules and thereafter form part of the rules of the Federation for all purposes other than r.31. Two branches only have exercised that power. The Western Australian branch has made rules relating to the qualifications to hold office and the tenure of office of certain officers in that branch. The No 2 Branch has made rules relating to quorums at meetings.
Rule 34 is headed "Branches" and constitutes the branches of the Federation. Paragraph (c) of r.34 constitutes the two branches within the State of Tasmania known as the Hospital Employees' Federation Tasmanian Branch, No 1 (the No 1 Branch) and the Hospital Employees' Federation Tasmanian Branch, No 2 (the No 2 Branch) respectively. That part of par (c) specifying the areas covered by each of the two branches in Tasmania is set out:

"(c) . . .

The area covered by Branch No 1 shall be the whole of that portion of the said State south of and including Oatlands and westwards from Deloraine. The area covered by Branch No 2 shall be that portion of the said State north of Oatlands and eastwards from and including Deloraine. Notwithstanding anything contained elsewhere in these Rules, this sub-clause shall not be amended or altered in any way affecting Branch No 2 unless at least two-thirds of the financial membership of Branch No 2 agree to such amendment or alteration by ballot duly conducted for the purpose."

The proviso contained in that part of par (c) set out is explained by historical developments which need not be described in these reasons. It is important to note, however, that there is no corresponding proviso with respect to the No 1 Branch, or, for that matter, any of the other branches of the Federation.
Under r.6, an applicant for membership of the Federation forwards his application to the Secretary of the Branch to which he would, if admitted to membership, be attached under r.34, and normally becomes a member from the date of the receipt of the application by the Branch Secretary. It is noted that the rules do not specify whether the place of work or of residence of a person is the crucial factor in determining to which branch a member is attached, but, having regard to the nature of the conditions of eligibility for membership of the Federation, the place of employment is, in all probability, the determining factor. Rule 9 provides for transfer of membership between branches but is not directly relevant to the question raised in these proceedings.
The National Council met over a period of days in October 1983. A number of rule alterations were made, and subsequently a new set of rules incorporating those alterations and other alterations was adopted. The procedures required by the rules had been complied with, including the proviso to par (c) of r.31. For present purposes, it is sufficient to say that the effect of all the rule changes was that the new rule providing for branches became r.46, and the relevant paragraphs of that rule relating to the No 1 Branch and the No 2 Branch, being pars (d) and (e) respectively, are set out, together with par (f):

"46(d) The Tasmania No. 1 branch shall consist of all members of the Federation employed in that portion of Tasmania south of Latitude 42 degrees South.

(e) The Tasmania No. 2 branch shall consist of all members of the Federation employed in that portion of Tasmania north of Latitude 42 degrees South.

(f) Notwithstanding anything elsewhere contained in these rules, clauses (d) and (e) of this rule will not be amended or altered in any way affecting the Tasmania No. 2 branch unless not less than two thirds of the financial membership of that branch agree to such amendment or alteration by ballot duly conducted for that purpose."

It is noted that any doubt as to whether the place of residence or place of employment was the factor to be used in determining which branch a member of the Federation should be attached has been removed by the use of the word "employed" in pars (d) and (e). Also, it should be noted that the name of the branches has been changed from "Tasmanian" to "Tasmania".
At the same time as this rule was adopted, a further power was given to National Council to alter the area embraced by any branch with the consent of that branch and any other branch concerned. The effect of that provision, had it been in operation in 1983, would have been to prevent the alteration to the boundaries of the two Tasmanian branches without the consent of each branch. This is a restriction which will endure for the future, but was not present at the time of the alteration to the rules.
The rule alterations and the rules in their new form have been filed with the Industrial Registrar for his certification under s.139 of the Act. He has not yet given his certificate, but has acted on a request by the appellants that because of the current dispute he should refrain from so certifying until the resolution of this matter. Nevertheless, in the meantime a number of persons, being members of the Federation, have actively engaged in the paperwork necessary to enable transfer of membership from the No 1 Branch to the No 2 Branch in order to give effect to the rules in their new form. Interim orders have been granted restraining the respondents from continuing to do that.
It is noted that where alterations to the rules of an organisation of the kind made by the Federation have been filed in the office of the Industrial Registrar, s.139(4) of the Act imposes a duty on the Industrial Registrar to consider those alterations and either to give or to refuse to give the certificate specified in that subsection. In normal circumstances, the Industrial Registrar should not, at the request of a member of the organisation, refrain from performing his duty and thus refrain from exercising the discretion conferred upon him. In McLeish v. Faure (1979) 40 FLR 462, commencing at 465, the court referred to the difficulties involved in considering the validity of proposed rules of an organisation which had not been filed for certification under s.139(4) of the Act. See also Boland v. Munro (1980) 48 FLR 66 per Evatt and Northrop JJ. at 68-69. During the course of submissions, the court directed attention to this matter. In all the circumstances we have decided to hear and determine all aspects of the appeal. We have done this for three reasons. One, the substantial issues raised go to the question of the power of the Federation to make some of the rule alterations and whether par 140(1)(d) of the Act applies to the Federation. Two, the Industrial Registrar has refrained from performing the duty imposed upon him by s.139(4) of the Act. Three, the merits of the proceedings have been fully argued both before the trial judge and the Full Court. Nevertheless, we refer to and repeat with approval what was said in McLeish v. Faure, (supra) at 476:

"It is stressed that by expressing the above views the court is not to be seen as usurping the discretionary power granted to the Registrar under s.139(4). Whether the Registrar refuses to grant a certificate in respect of any amendments to the rules which are lodged for certification is a matter solely for his determination."

The practical results which would flow from the coming into effect of the rules in their new form can be illustrated. The rule alteration proposes to remove the north-west part of Tasmania from the area covered by the No 1 Branch to the area covered by the No 2 Branch. Under the rules, some 3100 members of the Federation are attached to the No 1 Branch, while some 1600 members are attached to the No 2 Branch. Under the rules, if the alteration comes into effect, some 2250 members of the Federation would be attached to the No 1 Branch, while some 2450 members would be attached to the No 2 Branch. Thus, some 850 members of the Federation would be transferred from the No 1 Branch to the No 2 Branch without having changed their place of employment or without having followed the procedures prescribed by r.9. This group hereinafter is called the "replaced members". The appellant Walker is a replaced member. Further, the appellant Walker had been elected to and held an office in the No 1 Branch. Upon the alterations to the rules coming into effect, she may cease to be eligible to hold office in the No 1 Branch.
The appellants obtained a rule nisi calling upon the respondents to show cause why specified orders should not be made. As against the respondents being the natural persons, each of whom is a member of the Federation, orders were sought, in substance, that they treat as null and void and of no legal effect the resolutions of the National Council altering the rules of the Federation by which the areas covered by the No 1 Branch and the No 2 Branch were varied. Further orders were sought in the form of requiring those persons to observe the rules of the Federation by refraining from taking steps to transfer the replaced members from the No 1 Branch to the No 2 Branch without the prior written consent of the Committee of Management of the No 1 Branch. Those orders were all sought under s 141(1G) of the Act. In addition, orders were sought under s.140 or s.141 of the Act, namely declarations that specified rules of the Federation contravened par 140(1)(c) of the Act, see s.140(5D) and s.141(8A), and that the rules of the Federation contravened s.140(1) of the Act in a specified respect in that they failed to make a provision required by par 140(1)(d) of the Act, namely a provision for the autonomy of a branch in matters affecting members of the Branch only; see s.140(5D) and s.141(8A). The Federation was a necessary party for the purpose of the last two declarations; see s.140(5F).
The Federal Court refused to make the orders sought and by order discharged the rule nisi. The appellants appeal from that order.
The major contention put in support of the appellants' claim was that the rules of the Federation, on their proper construction, did not empower the National Council to alter the rules of the Federation so that the boundaries of the No 1 Branch were altered and the area of its control substantially reduced. Reference was made to r.35(a), with special reference to the words "all branches shall be completely and absolutely autonomous within the ambit of these rules and shall be responsible for their own government and administration". It was contended that the word "autonomy" should be given its dictionary meaning of "the right of self government . . . a self governing community". Support was sought from s.140(1)(d) of the Act which was first inserted in the Act after the making of r.35.
It is clear law that branches of an organisation are not separate bodies distinct from the organisation. Branches are not legal corporations within an organisation. A reading of the judgment of Fullagar J. in Williams v. Hursey (1959) 103 CLR 30 makes that proposition abundantly clear. The Act contains provisions enabling associations of employees or of employers to be registered as organisations. Upon registration as an organisation, the association becomes a body corporate separate and distinct from its members. For the purposes of settling industrial disputes, an organisation of employees stands in the place of the group of employees who are eligible to be members of the organisation under its eligibility rule. The organisation is a party principal in these disputes and under the Act awards made by the Commission in settlement of disputes are binding on employers with respect to the members of the organisation and, in appropriate cases, persons eligible to be members but who are not members of the organisation. It must not be forgotten that the rationale for organisations and the constitutional basis for their regulation by Commonwealth legislation is the power contained in placitum (XXXV) of s.51 of the Constitution, namely the power to make laws with respect to "conciliation and arbitration for the prevention and settlement of industrial disputes existing beyond the limits of any one State"; generally see Jumbunna Coal Mine NL v. Victorian Coal Miners' Association (1908) 6 CLR 309 (the Jumbunna case), Williams v. Hursey (supra), R. v. Dunlop Rubber Australia Ltd.; Ex parte Federated Miscellaneous Workers' Union of Australia (1957) 97 CLR 71 (the Dunlop Rubber case) and R. v. Clarkson; Ex parte Victorian Employers Federation (1973) 131 CLR 100 (the VEF case).
In industrial jurisprudence, an organisation need not be divided into branches. The existence of an organisation as a corporate body is essential. Branches are established for the purpose of internal management. Branches are not essential for the existence of organisations. Organisations are creatures of the Act. Branches are formed or created by the rules of an organisation or pursuant to powers contained in the rules. There is no doubt some of the provisions of the Act recognise the existence of branches within organisations, but that does not mean that every organisation must have branches. As was said by Fullagar J. in Williams v. Hursey at 54-55 in reference to a branch of an organisation of employees:

"It has no separate identity - no existence apart from the registered organisation, of which it is an integral and inseverable part. Its members are merely a section of the total membership of the federation - locally organised for the sake of convenience, but in no respect independent of the federation, and in all respects subject to the control of the federation. The branches are permitted within limits to make rules of their own, but the rules which they make derive authority from the rules of the federation."

It is equally clear law that an organisation, provided it complies with the requirements of the Act, the regulations and its rules, is able to mould its internal structures as it thinks fit. It is not for the court to mould those structures to a form which the court considers desirable. The position is made clear by the following passage from the judgment of Deane J. in the Municipal Officers' Association of Australia v. Lancaster (1981) 54 FLR 129 at 164-165, a passage approved and applied in Wright v. McLeod (1983) 6 IR 203; 51 ALR 483:

"The constraints and restrictions imposed, by positive and negative requirements of the Act and Regulations, upon the freedom of the members of an organization to select, for themselves, the rules which they consider appropriate for their particular organization, are real and significant. It cannot, however, be too strongly stressed that, subject to those constraints and restrictions, the content of the rules of a registered organization is primarily a matter for the members (Watson v. Australian Workers' Union (1967) 10 FLR 347 at 361; Cassidy v. Amalgamated Postal Workers' Union of Australia (1967) 11 FLR 124 at 126-127; Wiseman v. Professional Radio and Electronics Institute of Australiasia (1978) 35 FLR 24; Re Airline Hostesses' Association (1980) 48 FLR 214). This Court has no authority generally to supervise the content of the rules or to require that the rules comply with what those constituting the court might see as preferable, desirable or ideal. To put the matter differently, it is for the members, or those entrusted by the members in that regard, to decide the content of the rules. The function of this Court is to determine, in accordance with ordinary judicial procedure, whether some provision or provisions of the rules adopted by, or on behalf of, the members can properly be described not merely as undesirable but as oppressive, unreasonable or unjust."

There is no doubt that the branches of the Federation perform a very important function under the rules of the Federation. A reference to r.35 makes this clear; see also Standard Branch r.24 which enables a branch to secede from the Federation. Some of the branches are determined on an industry basis within States. Others are based on State boundaries, while others, as in Tasmania, are based on parts of a State. Every member of the Federation must be attached to a branch. Delegates to National Council are elected by and from the membership of each branch, the number of delegates from each branch depending upon the number of members in the branch. Under the standard branch rules, wide powers are given to branches and committees of management within branches. All this is accepted. Nevertheless, the branches remain creatures of the rules of the Federation, and those rules may be altered in accordance with the provisions of the rules.
The National Council is empowered to alter the rules of the Federation. In so doing, it must comply with the procedures prescribed in the rules. In some cases the rules impose specific restrictions on the exercise of the power to alter rules. The proviso to r.34(c) is such a restriction. Restrictions are imposed by proposed r.46(f) and the proposed rules requiring the consent of branches to alteration of boundaries of branches. Another restriction is imposed by par (j) of r.34 which requires the approval of a two-thirds majority of the National Council to alter par (a) of r.34, a paragraph which describes industries which may form the basis for branches within States. A similar restriction is imposed by par (c) of r.12 in relation to an amendment of r.12 specifying the basis upon which the representation of delegates from branches is calculated. A restriction is contained in r.35(a) set out earlier in these reasons. Nevertheless, the rules contain no restrictions on the power of the National Council to alter the boundaries of the No 1 Branch. It follows, therefore, that the procedures prescribed by the rules having been followed, the National Council, prima facie, had power to make the alterations challenged by the appellants.
In coming to this conclusion, it is noted that no opinion is expressed as to the wisdom or desirability of the proposed rule change. It is noted also that the appellants do not allege that the members of the National Council did not exercise the power to alter the rules bona fide for the purpose of the power conferred upon them.
Having construed the relevant rules of the Federation and come to the conclusion that the National Council had power to make the rule alterations which are challenged by the appellants, two further questions are raised under s.140(5D), namely:

1. whether specified rules of the Federation or specified parts of rules contravene s.140(1) of the Act, or

2. whether the rules of the Federation contravene s.140(1) of the Act in a specified respect.
The questions are framed in that form since the consequences arising from a declaration made if an affirmative answer is given to Question 1 are markedly different from the consequences flowing from a declaration made if an affirmative answer is given to Question 2. If a declaration is made under Question 1, the specified rules or the specified parts of rules are deemed to be void from the date of the declaration; see s.140(5G). If a declaration is made pursuant to Question 2, s.140(7) applies, and if the Federation does not within three months amend its rules to bring them into conformity with the requirements of s.140(1), the Industrial Registrar has power to make the necessary amendments; generally see Morris v. Federated Liquor and Allied Industries Employees' Union of Australia (1978) 35 FLR 60 per Smithers, J B Sweeney and Evatt JJ. at 67-68 and Linehan v. Transport Workers' Union of Australia, Federal Court of Australia, Northrop J., 27 July 1981, unreported except in (1981) IAS Current Review 570, quoted in Wright v. McLeod, above, per Evatt and Northrop JJ. at 222- 224; 509-511. See also R. v. Dunphy; Ex parte Maynes (1978) 139 CLR 482 per Mason J. at 489-490.
In order to understand the submissions made with respect to these two questions, it is necessary to refer to the precise form of the orders sought by the appellants. Those orders, as amended during the course of the hearing before the trial judge, are as follows:

1. a declaration that rr 13(b), 31 and 34(c) of the rules of the Federation contravene s.140(1)(c) of the Act;

2. a declaration that the rules of the Federation contravene s.140(1) of the Act in a specified respect in that they fail to make a provision required by s.140(1)(d) of the Act, namely, provision for the autonomy of a branch in matters affecting members of the branch only.
It is necessary to set out those parts of s.140(1) relevant for present purposes:

"140(1) The rules of an organization -

(a) 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;

. . .

(c) 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

(d) shall be such as to provide for the autonomy of a branch in matters affecting members of the branch only and matters concerning the participation of the branch in any State industrial conciliation and arbitration system."

Question 1 challenges one rule, namely r.31, and specified parts of another two rules, namely r.13(b) and r.34(c). Reference has been made already to each of those rules, parts of which are set out in full. Rule 13(b) is that part of r.13 which confers on the National Council the particular power "to repeal, alter and add to these Rules or any part of them". Rule 31 prescribes procedural matters to be followed before the National Council exercises the power conferred on it by r.13(b) and to that extent imposes restrictions on the exercise of that power. Rule 34(c) constitutes the No 1 Branch and the No 2 Branch, defines the area of Tasmania covered by each of those branches, and contains the proviso for the benefit of the No 2 Branch.
It is difficult to understand why the appellants are seeking a declaration that r.31 and those parts of rr 13 and 34 being pars (b) and (c) respectively, contravene s.140(1) since if that declaration is made, that rule and those parts of the other two rules would be deemed to be void. In the result, the rules would make no provision for their alteration and Branch No 1 and Branch No 2 would cease to exist. There would be no branches of the Federation in Tasmania.
Under s.132 of the Act and reg 115, the rules of an organisation must make provision in relation to the alteration of its rules; see reg 115(1) (d)(xiv). Rule 13(b) makes that provision. Difficulties arising from the making of a declaration in the form sought are illustrated by a reference to Wright v. McLeod, above, per Evatt and Northrop JJ. at 230;519.
In support of an affirmative answer to Question 1, counsel for the appellants relied upon the ground contained in par (c) of s.140(1) of the Act, namely that the rule, and those parts of the rules, imposed upon members of the Federation, particularly those members attached to the No 1 Branch and especially those who were replaced members, conditions, obligations or restrictions which, having regard to the objects of the Act and the purposes of the registration of organisations under the Act were oppressive, unreasonable or unjust. The nature of that statutory provision has been discussed in many cases, and for present purposes it is sufficient to refer to what was said in Wright v. McLeod, above, per Bowen C.J. commencing at 206; 488, and per Evatt and Northrop JJ. commencing at 224; 511. Those principles are to be applied.
The foundation of the complaint by the appellants is that they oppose the way in which the National Council exercised its discretion. They claim to be adversely affected by the alteration. Insofar as those rules permitted the alteration to be made, they contend that they must contravene par 140(1)(c) of the Act. The submissions were based on the concept of autonomy and the rights of branches as against the organisation itself. To that end, counsel contended that the autonomy and responsibility for government conferred upon the branches, amounted to a degree of self-government or independence from the Federation and other branches which could not be affected by the National Council altering the rules of the Federation. All these submissions, however, are really relevant to a consideration of whether the National Council had power to alter the rules of the Federation in the manner complained about. The fact that some members of the Federation disagree with the way in which a power is exercised, does not make the rule conferring the power oppressive, unreasonable or unjust. As a final resort, the rules of the Federation contain a plebiscite provision, r.29 and no submissions were directed to the absence of control of committees by the members of the Federation; see reg 115(1)(d)(v). The appellants have failed to make out this part of their case.
In reality, the contentions made by counsel for the appellants in relation to the first question are more relevant to the attack upon the rules arising under the second question. That attack is based on the second limb of s 140(5D), namely that the rules of the Federation contravene s.140(1) in a specified respect.
Before considering this question, it should be noted that the fact that the rules fail to make the provision required by par 140(1)(d), does not of itself result in specified rules or specified parts of rules being in contravention of s 140(1) of the Act; Morris v. Federated Liquor and Allied Industries Employees' Union, above, at 68-70.
The construction to be given to par 140(1)(d) of the Act has been the subject of some discussion. The relevant authorities are discussed by Gray J. in Krantz v. Federated Clerks' Union of Australia (1984) 5 FCR 416 (Krantz's case), a decision given after the conclusion of argument in the present case. That decision contains much of interest and should be read. In summary, his Honour held that par 140(1)(d) applied, even though no branch of the organisation was participating in a State industrial system. Nevertheless, his Honour held that the autonomy referred to in that paragraph amounted to no more than the autonomy conferred upon the branch by the rules of the organisation. The content of the autonomy thus conferred could vary greatly between organisations. There were no objective standards by which the degree of autonomy could be measured. Implicit in his reasons was the proposition that subject to any restrictions contained in its rules, an organisation could vary the degree of autonomy so conferred upon a branch.
In view of the conflicting opinions which have been expressed, it becomes necessary to consider whether par 140(1)(d) has any application to the rules of the Federation with respect to a branch, namely the No 1 Branch, which is not participating in any State industrial system. Paragraph 140(1)(d) was inserted into the Act in October 1974 by s.9 of Act No 89 of 1974. Prior to that date, s.140(1) contained negative requirements only in the form that rules of organisations "shall not". The positive requirements of what should be in the rules of organisations appeared in the other provisions of the Act introduced by the words that conditions to be complied with by organisations were that rules "shall" make provisions for specified matters. Those positive requirements were made enforceable by that part of par 140(1)(a) which provides that the rules of an organisation shall not fail to make a provision required by other provisions of the Act. The insertion of par (d) into s.140(1) made that subsection resemble the Ten Commandments of the Old Testament made applicable to the rules of organisations. Nevertheless, the positive requirement was there, the only difference being that that requirement did not depend, necessarily, on par 140(1)(a) to be enforceable. Act No 89 of 1974 was enacted to give effect to the report and recommendations of the Committee of Inquiry on Co-ordinated Industrial Organisations. The Committee was constituted by a Judge of the Australian Industrial Court, the late J B Sweeney J. who had extremely wide knowledge of and experience in industrial matters in the Commonwealth area and in the areas of the States, particularly of New South Wales. The Committee was assisted by two eminent counsel with wide knowledge of and experience in industrial matters, namely Mr R E McGarvie QC and Mr K D Marks, each of whom has since been appointed to judicial office. The terms of reference of the inquiry were as follows:

"The Committee will inquire into -

a. The desirability of a system of organisation and/or registration of employee and employer organizations which would enable the one body to represent in terms of legal personality, structure, organisation and otherwise its members in both Australian and State arbitration systems.

b. Means by which such a system if desirable may be achieved.

c. The systems of registration of organisations of employees and employers under the Australian Conciliation and Arbitration Act and of trade or industrial unions and associations under statutes providing for conciliation and arbitration in the States and the effects of such systems on the operations of these bodies and their branches.

d. Problems and difficulties arising from the fact of registration under one or more of such systems and the operation thereunder of the same group of members of employer and employee organisations and steps appropriate to be taken.

The Committee will conduct its inquiries with a view to recommending such action as is necessary and desirable in the light of its inquiry so as to enable the efficient functioning of employer and employee organisations under systems of Australian and State conciliation and arbitration and the efficient functioning of such systems."

It is noted that the terms of reference were limited, namely to the problems arising from branches of an organisation participating in State industrial systems where the State legislation required registration of that branch within the State system resulting in the incorporation of that branch under the State legislation. The incorporation of branches of an organisation was incompatible with the concept of organisations being incorporated under the Act and branches of an organisation being part of that corporate body. The terms of reference were not directed to the relationship generally between organisations and branches of organisations. It must be assumed that J B Sweeney J. and counsel assisting him all knew of and fully understood the nature of organisations and the relationship between an organisation and its branches. It is unlikely, therefore, that the recommendations contained in the report were intended to have any effect except insofar as they related to the limited nature of the terms of reference.
The report contained a full and careful consideration of the problems and possible solutions. The solution recommended was that in order to enable the branches to participate in a State industrial system, a new concept should be adopted whereby the branches should obtain registration without incorporation in the State system, that the general control of the branches should remain with the Commonwealth, but that special provisions should apply to enable the industrial procedures operative in the State system to be used effectively against the branches. The solution depended upon the Commonwealth and the States passing complementary legislation. The report contained a recommended form of legislation to be passed by the Commonwealth to give effect to the recommendation of the Committee. Act No 89 of 1974 is in a form almost identical with the recommended form contained in the report.
The relevant recommendation contained in the report is included in the chapter headed "Solution proposed to the present problems". Paragraph 17 of that chapter contains a summary of the recommendations and is quoted in full:

"17. I contemplate then that the present difficulties, invalidities and inherent future problems could be avoided if the respective State Acts were amended to provide:

1. For a system of non corporate registration of branches of federal organisations.

2. That a federal body may apply to a State Court for registration of a branch or branches in a particular State.

3. That there was reposed in the State tribunals a discretion as to registration exercisable in the general manner I have indicated above.

4. That there was reposed in the State tribunal a discretion as to the geographical and/or industrial areas in which it would allow the federal branch to operate for purposes of the State Act.

5. That the State statutory provisions as to requirement of rules and requirements as to alteration of rules, the power to make orders directing performance of rules, powers in respect of disputed elections and the power to require a registered union to admit an applicant were not to apply to registered branches of federal organisations.

6. That the federal branch lodge with the State Registry the records required to be kept and lodged in respect of the branch under the Australian Act.

7. That there should remain within the State system a power to deregister the federal branch as a non corporate registered body within its system on the same grounds as now exist with respect to other unions in that system.

8. That in exercising its discretion to register the State system should satisfy itself that there is sufficient autonomy within the branch as to matters arising in its participation in the State system and that there are funds available within the State and in the branch. It should also satisfy itself that there are officers within the State of the branch to conduct the affairs of the branch within the State system. The current requirements as to attendance at conferences and the like should apply to such officers and the branch. 9. That the branch when registered should have the same rights as to the making and enforcement of awards, demarcation, objections to registration and the like as other registered unions."

Particular reference is made to subpar 8 of that paragraph.

The complementary provision for the Commonwealth system was that the control of organisations, including branches, should be retained in the Commonwealth system, not the State systems. Thus, the directions for performance of rules and disputed elections should remain with the Australian Industrial Court. The position is made clear by par 11 of the chapter headed "Solution proposed to the present problems";

"11. Some State Acts have provisions based on the Act for the disallowance of rules; others have more limited powers. The provision in the Act is in Section 140. Again I think it preferable that one tribunal only should have this power in the case of federal branches.

There should be added to Section 140 a further ground for disallowance that the rules do not provide a sufficient degree of autonomy for a branch. This may well be covered already (cf. O'Mara J. 56 CAR 592) but it is preferable to provide for it specifically."

The authority referred to is Barney Thornton v. J M Mackay; Re Federated Ironworkers Association of Australia (1946) 56 CAR 561, a decision of the Commonwealth Court of Conciliation and Arbitration. That decision was given before the High Court had fully explained the concept of organisations being party principals in the creation and settlement of industrial disputes; see the Dunlop Rubber case, above, and the VEF case, above, and before the decision of the Commonwealth Industrial Court in Moore v. Doyle (1969) 15 FLR 59. The latter authority highlighted the difficulties facing an organisation attempting to participate, through its branch, in a State industrial system. O'Mara J. explained the concept of the autonomy of a branch of an organisation by reference to the autonomy conferred on the branch by the rules of the organisation in a manner similar to the opinions expressed by Gray J. in Krantz's case (supra). Having regard to what appears in authorities after 1946, and especially in Williams v. Hursey, above, it is difficult to give legal meaning to the concept of "statutory autonomy" in relation to branches of an organisation. It is apparent that from the Report that the Committee did not consider the then existing statutory provisions adequate to enable an organisation, through its branches, to participate effectively within a State industrial system. The report of the Committee makes it clear that the amendment suggested to s 140 of the Act was in relation to the limited purpose of permitting organisations, through their branches, to participate effectively within State industrial systems.
The Report recommended that a new s.136A be inserted in the Act. This was done by s.7 of Act No 89 of 1974, the only difference in form being that the form of the recommendation was in a single section, while the form as enacted was divided into two subsections. The section reads:

"136A. (1) Where it is not contrary to the rules of an organization to do so, it may participate in the systems of conciliation and arbitration or of wages boards or like systems established under the law of a State, and for that purpose a branch of an organization may become registered under a law of a State so long as that registration does not involve the branch in becoming incorporated, or otherwise becoming a legal entity, under the law of a State.

(2) Where an organization so participates, its rules may provide that the Secretary of the branch of the organization in the State shall be the person to sue or to be sued under the law of the State in respect of any acts or omissions arising from that participation."

It is to be noted that under this section, the organisation itself may participate in the State industrial system.
The Report recommended that a new s.133A be inserted in the Act. This was done by s.5 of Act No 89 of 1974, the only difference being that an additional subsection, being now subs (4), was inserted. That provision did not appear in the form recommended. Section 133A contains conditions to be complied with by organisations divided into branches, namely the setting up of two funds, the Federal Fund under the control and management of the organisation as a whole, and the Branch Fund under the control and management of the branch. Subsections (4) and (5) are set out:

"(4) Rules relating to a Branch Fund shall not be altered except with the consent of the branch concerned.

(5) The Registrar may grant to an association or organization exemption from this section or any provision of this section on the ground that its rules make adequate and reasonable provision for its funds, including branch funds, having regard to its functioning under this Act and its participation in any State system of industrial conciliation and arbitration."

It is clear that s.133A is designed to give effect to that part of par 17(8) of the Report which relates to funds of a branch being available to satisfy the requirements of the State industrial system. Section 133A(5) is of importance since that subsection assumes a major premise that the purpose of s.133A is to enable the recommended solution to work. If s.133A is to apply generally to all organisations, there would be a curious result, namely an organisation, a branch of which participates in a State industrial system, could obtain an exemption from the requirements of s.133A, including subsection (4), while an organisation, no branches of which participate in a State industrial system, could never obtain such an exemption.
The Report recommended that a new par (d) be added to subs 140(1) of the Act. This was done by par 9(1)(b) of Act No 89 of 1974 in the identical form to that contained in the recommendation. It is equally clear that par 140(1)(d) is designed to give effect to that part of subpar 17(8) of the report which relates to the autonomy of branches of organisations which are to participate in State industrial systems. The autonomy extends beyond direct participation of the branch in the system to matters arising out of or in connection with that direct participation.
Having regard to the Report and the content of the recommendations contained therein, and the provisions of s.15AB of the Acts Interpretation Act 1901 (Cth), it is our opinion that par 140(1)(d) applies only with respect to organisations which, through branches, participate or seek to participate in a State industrial conciliation and arbitration system. This construction overcomes the difficulty of determining what the word "autonomy" means in an abstract sense. It overcomes the difficulty of construing the word "autonomy" as meaning that degree of autonomy conferred upon a branch by the rules of an organisation. It enables the word "autonomy" to be construed on the facts of any particular case having regard to the requirements of the relevant State legislation applicable to the system within which the organisation, through its branch, is participating. This may well vary from State to State.
A number of opinions have been expressed that par 140(1)(d) contains two limbs and should be read as follows:

"First limb:

The rules of an organization shall be such as to provide for the autonomy of a branch in matters affecting members of the branch only.

Second limb:

The rules of an organization shall be such as to provide for the autonomy of a branch in matters concerning the participation of the branch in any State industrial conciliation and arbitration system."

That is the view expressed by Gray J. in Krantz's case (supra), and by Fitzgerald J. in Mapstone v. Maynes (1983) 4 IR 198 at 205. In Nucifora v. Mapstone, Federal Court of Australia, 3 November 1983, unreported, being an appeal in Mapstone v. Maynes, a Full Court did not find it necessary to express an opinion on that issue.
We have given serious consideration to those expressions of opinion, but with the greatest respect do not agree with them. Fitzgerald J., in coming to the view he did, made no reference to the report by J B Sweeney J. on which the legislation was founded. He did not give any detailed consideration of the nature of organisations and the relationship between organisations and branches. He did not have the benefit of being able to rely upon the provisions of s.15AB of the Acts Interpretation Act 1901. Gray J. considered the matter in far greater detail and came to the same conclusion. Nevertheless, a reading of his reasons for decision in Krantz's case disclose the strange result that followed, namely there are no criteria by which to judge the degree of autonomy to be given to a branch in order to satisfy the requirements of the paragraph.
Most importantly, however, par (d) was not enacted for any purpose to affect relationships between an organisation and its branches, except to a limited extent where an organisation, through its branches participated, or desired to participate, in State industrial systems. Further, it is difficult to visualise situations where matters affecting members of a branch can affect those members only and not members of the organisation generally, except in cases where the branch is participating in State industrial systems. Even then, what occurs in that State system may well affect members of the organisation in other branches of the organisation. What is intended, however, by this paragraph is that all matters arising out of 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.
Our view is supported by the language used in par 140(1)(d). The legislation is not in the normal form of requiring the rules of an organisation to provide for specified matters; see s.132(1), opening words, s.132(2) and reg 115(1)(d), s.133, s.133A(1) insofar as it may be relevant in this context, and s.133B(1). Further, in par 140(1)(d), the first limb relates to matters affecting members of a branch while the second limb relates to a branch, a non-corporate body but, of necessity, having registration but no incorporation under State industrial legislation. The branch remains a group of members of a corporate body locally organised on an industry or an area basis, or on both for the purpose of convenience. Further, the word "in" does not appear before the word "matters" in the second limb. On ordinary principles of syntax, if the two limbs were to have separate and distinct effect, one would expect the word "in" to appear in the second limb before the word "matters".
In our opinion, par 140(1)(d) does not impose two separate and distinct conditions to be contained in all rules of organisations which make provisions for branches. Experience shows that where rules do make provisions for branches, the rules confer powers on branches, their members and their committees of management. Those powers can vary greatly between organisations. The nature of those powers is referred to by O'Mara J. in Barney Thornton v. J M Mackay; Re Federated Ironworkers Association of Australia (supra). If a branch is to participate in a State industrial system, the nature of its powers, having regard to the requirements of the relevant provisions of the State system, must comply with the requirements of par 140(1)(d). In that paragraph the word "and" appearing between the two limbs is to be construed conjunctively as meaning joining together or uniting the two limbs into a single requirement. That requirement operates in respect of the branch itself, even though not corporate, and the members of the branch. It is in relation to the participation of that branch in a State industrial system that the requirements must be fulfilled. In that paragraph, the word "and" should not be read disjunctively and is not to be construed as creating two separate and distinct conditions, the first of which is to apply to all organisations and all branches of organisations, while the second limb is to apply only to those organisations a branch of which is participating or desires to participate in a State industrial system.
Finally, in our opinion, it is most unlikely that the legislature would have attempted to have made such a radical change to the relationship between organisations and branches in legislation which was designed for a more limited purpose, namely, the participation by organisations, though branches, in State industrial systems. The legislation is in force. The fact that complementary State legislation has not been passed does not affect the operation of the section, except in the way already discussed, namely that there cannot be any branches of any organisation presently participating in State industrial systems pursuant to the recommendations contained in the report by J B Sweeney J.
Act No 89 of 1974 contained specific provisions allowing a period of twelve months for an organisation to bring its rules into conformity with the requirements of s.133A and s.140 respectively. Those specific provisions do not affect our opinion, since they are neutral in operation and would have applied only to the case where a branch was participating or intended to participate in a State industrial system when the Federal legislation was enacted.
It follows that the appellants have failed in this part of their case.
In any event, even if par (d) of s.140(1) of the Act did apply, in our opinion the appellants have failed to make a case. On the assumption that that paragraph applies, in our opinion, the No 2 Branch is entitled to that degree of autonomy which is conferred upon it by the rules. The rules of the Federation grant a very large degree of autonomy on the branches. Aspects of this have been referred to already, in particular r.35, the Standard Branch Rules and in particular r.24 thereof which enables a branch to secede from the Federation. Very little use has been made of the power contained in r.36(b) which enables a branch to make rules applicable to itself and its members. During the hearing before us, debate took place as to what was to prevail in the event of conflict between a rule made by a branch and a rule made by the National Council. This debate centred around an apparent discrepancy and conflict between r.36, and particularly par (d) of r.36, and r.31. We do not find it necessary to express any opinion on that matter.
There remains to consider the position of the appellant Walker who had been elected to and held office in the No 1 Branch. Before the trial Judge, the appellants sought a declaration that the rules of the Federation, and in particular rr 13(b), 31 and 34(c) contravene s.140(1) of the Act in a specified respect in that they permitted a person elected to an office within the No 1 Branch to be effectively dismissed from office otherwise than in accordance with s.133(1)(f) of the Act. There are obvious difficulties in the form of that declaration. At the hearing before the Full Court, counsel for the appellants did not seek this declaration.
In the result the appeal must be dismissed.

JUDGE2

BEAUMONT J. I have had the advantage of reading the joint reasons for judgment of Evatt and Northrop JJ. and need not repeat what they have said in relation to this appeal.

The impact of the change to the boundaries of Branch No 1 sought to be effected by the resolutions now challenged by the appellants is conveniently indicated by the following maps which were in evidence before the learned trial judge:

Maps Omitted.

The appellants' challenge to this change is based on two alternative submissions: first, that as a matter of construction of the National Rules of the Federation (the Rules), in the absence of the consent of Branch No 1, the resolutions were beyond power; secondly, that even if the Rules did purport to authorise such a change, the Rules thereby offended the provisions of s.140(1)(d) of the Conciliation and Arbitration Act 1904 (Cth) (the Act) so far as those provisions require the Rules "to provide for the autonomy of a branch in matters affecting members of the branch only".
In order to understand the appellant's first submission, it is necessary to refer to the relevant Rules. Admission to membership of the Federation is effected by an applicant's forwarding an application to the secretary of the Branch to which he would, if admitted to membership, be attached under r 34 (r 6(a)). Every member is deemed to be attached to the Branch to which he applied for membership and no member can be attached to more than one Branch (r 6(d)). Rule 34, which is, of course, central to the present dispute, provides:

"(a) There shall be a line of demarcation of members as follows:

Group (a): Will include all persons eligible for membership of the Federation, other than Mental Hospital Employees, Department of Health Mental Hygiene Employees, Penal Department Employees and Children's Welfare Department Employees and Professional Officers and Nurses.

Group (b): Will include all Mental Hospital Employees, Department of Health Mental Hygiene Employees, Penal Department Employees and Children's Welfare Department Employees and other Government Employees.

Group (c): includes all Professional Officers and Nurses.

(b) In the State of Victoria there shall be two Branches: No 1 Branch shall comprise all the members in Group (a) and (c); No 2 Branch shall comprise all the members in Group (b).

(c) In the State of Tasmania there shall be two Branches which shall be known as the Hospital Employees' Federation Tasmanian Branch No 1, and the Hospital Employees' Federation Tasmanian Branch No 2.

The area covered by Branch No 1 shall be the whole of that portion of the said State south of and including Oatlands and westwards from Deloraine. The area covered by Branch No 2 shall be that portion of the said State north of Oatlands and eastwards from and including Deloraine. Notwithstanding anything contained elsewhere in these Rules, this sub-clause shall not be amended or altered in any way affecting Branch No 2 unless at least two-thirds of the financial membership of Branch No 2 agree to such amendment or alteration by ballot duly conducted for the purpose.

(d) In the State of New South Wales there shall be one Branch comprising all the members in Groups A and C (sic).

(e) In the State of South Australia there shall be one Branch comprising all the members in Groups (a) and (c).

(f) In the State of Queensland there shall be one Branch comprising all the members in Groups (a), (b) and (c).

(g) In the Australian Capital Territory there shall be one Branch comprising all the members in Groups (a), (b) and (c).

(h) In the State of Western Australia there shall be one Branch comprising all the members in Groups (a), (b) and (c).

(i) The National Council shall have the power with consent of financial members in any State to constitute other Branches upon the line of demarcation set out in paragraph (a).

(j) Paragraph (a) shall not be altered without the approval of a two-thirds majority of the National Council.

(k) Each Branch may form Sub-Branches for different sections for the purpose of meeting the convenience of members.

(l) It shall be competent for Branches in any State to form a State Council or Conference, the Rules of such Council or Conference to be drawn up by the participating Branches and submitted to National Council for adoption. The State Council or Conference may recommend matters to the Branches, but shall have no power other than that of recommendation.

(m) Members residing in a State or Territory in which there is no Branch, desirous of forming a Branch, shall request the National Council by a petition signed by not less than twenty-four members, to take the necessary steps to form a Branch. The National Council shall, upon receipt of such petition, take immediate action to comply with the request."

Members desirous of transferring from one Branch to another may apply to the Secretary of his or her branch for a transfer certificate (r 9).
The National Council of the Federation consists of the Officers (as defined) of the Federation (r 12(a)(i)) and delegates elected by and from each Branch on the basis of one delegate for every 500 members or part thereof (r 12(a)(ii)). No alteration may be made to r.12(a)(ii) unless approved by a two-thirds majority of National Council (r 12(c)). Subject to the "supreme control" of the Federation which is vested in the members and subject also to the Rules, the National Council has vested in it the management and control of the affairs of the Federation and has the power, inter alia, to repeal, alter and add to the Rules (r 13(b)). Subject to rr 35(a) and 36, the power to make new Rules or to add to, amend, rescind or otherwise alter the Rules may be exercised by and at a meeting of the National Council (r 31(a)).
Rule 35(a) provides:

"(a) All Branches shall be completely and absolutely autonomous within the ambit of these Rules, and shall be responsible for their own government and administration. The Branch shall be the basic unit of the Federation and shall possess full and adequate powers to conduct its own affairs and to seek its objectives under the Rules. The control of the Branch resides exclusively in the members of the Branch, who shall be bound by these Rules. This Rule can never be altered except by a Ballot of all financial members of the Federation. Such alteration to be carried must receive a majority vote of two-thirds of the financial members of the Federation."

Each Branch is governed in accordance with the Standard Branch Rules set out in the Schedule to the Rules. Each Branch has power through its Committee of Management or by referendum of Branch members, to make Rules from time to time for its own internal management, and may therefore add to, rescind or alter any of the Standard Branch Rules (r 36). The Standard Branch Rules provide that the Branch is not to be dissolved unless the financial membership of the Branch falls below twenty (Standard Branch Rule 22). Those rules further provide that if at any time not less than 20 per cent of the members of the Branch petition the Committee of Management of the Branch requesting the withdrawal of the Branch from the Federation, the Committee is to hold a ballot of financial members to decide the question. If a simple majority votes for secession, the Committee is to take steps to effect the Branch's withdrawal from the Federation. With certain minor exceptions, the funds and effects of the Branch are the absolute property of the Branch (Standard Branch Rule 24).
The Federation is not to be dissolved unless a majority of the Branches of the Federation demand that the question be submitted by ballot to all the then financial members of the Federation (r 33).
The Rules should, of course, be construed against the background of the Act and its Regulations. Whilst the Act affords to registered organisations the choice of adopting either a unitary or a federal structure, if a branch is established, the Rules of the organisation:

"shall be such as to provide for the autonomy of a branch in matters affecting members of the branch only and matters concerning the participation of the branch in any State industrial conciliation and arbitration system" (s 140(1)(d)).

In its report recommending the introduction of s.140(1)(d), the Committee of Inquiry on Co-ordinated Industrial Organisations proposed two requirements as a solution to the problems then under inquiry: first, that a system of registration be adopted for federal organisations within the States which does not involve them being incorporated under the State Act (Report at 28); secondly, a satisfactory system for control over the rule-making powers of a branch (Report at 28, 29, 30). The Committee said (at 30):

"11. Some State Acts have provisions based on the Act for the disallowance of rules; others have more limited powers. The provision in the Act is in Section 140. Again I think it preferable that one tribunal only should have this power in the case of federal branches.

There should be added to Section 140 a further ground for disallowance that the rules do not provide a sufficient degree of autonomy for a branch. This may well be covered already (cf O'Mara J. 56 CAR 592) but it is preferable to provide for it specifically."

The reference by the Committee to a decision of O'Mara J. was a reference to Barney Thornton v. J M Mackay; Re Federated Ironworkers Association of Australia (1946) 56 CAR 561 in which an application was made under ss 56D, 58D and 58E of the Conciliation and Arbitration Act 1904 for orders directing compliance with the Rules of the Association and for an order disallowing certain Rules of the Association. O'Mara J., in disallowing certain Rules, said (at 592-593):

". . . I will discuss the question of whether the Branches have any statutory autonomy in the way of rights which may not be abrogated or diminished by powers exercisable by the organization or by the Committee of Management of the organization. On this aspect I am of opinion that when a union functions with branches there are certain rights reserved to the members of the branches by regulation 6 of which they cannot be deprived and that any rule empowering the organization or a committee of the organization to encroach upon, interfere with or diminish those rights is a rule which is in conflict with the prescribed conditions and is therefore contrary to law. . . . I take the election of a Committee of Management and of officers of a Branch and the control of committees of Branches. Although clause 6(1)(a) of regulation 6 does not expressly provide by whom the committee and officers of a Branch are to be elected clause 6(1)(e) expressly provides that in the matter of control the rules must provide for control of committees of Branches by the members of the Branches. Read together paragraphs (a) and (e) vest a measure of autonomy in a Branch and so read the regulation requires that the committee of management and officers of a Branch shall be elected by the members of a Branch or by those appointed by the members of the Branch for that purpose and that when elected the committee is subject to control by the members of the Branch. Any rule which purports to come between the members of a Branch and their right to a committee and officers of their own election or to supersede them in the control of their committee while it remains in office is inconsistent with the regulation and contrary to law."

Regulation 115 of the present Regulations under the Act is similar to reg 6 referred to by O'Mara J. (cf Morris v. Federated Liquor and Allied Industries Employees' Union of Australia (1978) 35 FLR 60 at 65, 71).
It is submitted on behalf of the respondents that, on their proper construction, the Rules invest the National Council with power to amend r 34(c) so as to alter the geographical boundaries of Tasmanian Branch No 1. The respondents point to r.13(b) as the source of the Council's power to make this alteration. They rely, in a general way, on the reasoning in Williams v. Hursey (1959) 103 CLR 30 to the effect that a branch has no separate legal existence apart from the registered organisation of which it forms part. Moreover, the respondents contrast the treatment of Tasmanian Branch No 2 in the provision in r.34(c) that:

"notwithstanding anything contained elsewhere in these Rules, this sub-clause shall not be amended or altered in any way affecting Branch No 2 unless at least two-thirds of the financial membership of Branch No 2 agree to such amendment or alteration by ballot . . .".

It is convenient to consider the matter in the first instance apart from the impact, if any, of this proviso.

The power to alter the Rules is expressed in r.13(b) to be vested in the Council "subject to" the Rules. The question thus arises of determining whether the Rules, read as a whole, import some relevant limitation on the exercise of this power. This in turn requires an examination of the basis upon which implications, if any, should be made in the Rules.
To assess the presumed intention of the parties for the purpose of making implications in the Rules, it is necessary to have regard to the genesis, and objectively, the aim of the association of members with each other in the Union (see Porter v. Dugmore (1984) 7 IR 120 per Smithers J. at 130). In this respect, the entrenched provisions of r.35(a) are, I think, significant when they speak of the branches as the "basic unit" of the federation in the context of a grant of autonomy in their own government and administration. In my opinion, it is proper to infer from this Rule and the Rules as a whole an implied limitation on the Council's power to alter the Rules to the effect that this power will not be used for the purpose of elimination of a Branch or for the purpose of inhibiting or impairing its capacity to function (cf Commonwealth of Australia v. State of Tasmania (1983) 57 ALJR 450 per Mason J. at 487).
To put the matter another way, in the language of the club cases, the alteration will be beyond power if it is incompatible with the fundamental objects of the organisation (see Halsbury's Laws of England (4th ed, Vol 6) par 222 at 65; Lloyd, The Law Relating To Unincorporated Associations at 102-103; Hole v. Garnsey (1930) AC 472 per Lord Atkin at 496; Metropolitan Gas Company v. Federal Commissioner of Taxation (1932) 47 CLR 621 per Rich J. at 635; cf Finlayson v. Carr (1978) 1 NSWLR 657). In short, even if the alteration be within the literal power to alter the Rules, the Rules on their true construction should be read down so that the power is not used for the ulterior purpose of destroying or debilitating a fundamental element of the Federation.
The general position is explained by Smithers J. in Allen v. Townsend (1977) 31 FLR 431 at 441:

"The capacity of the branch to operate as an instrument of the federation, both in administering its affairs and in engaging in conduct of various but well-known kinds, including activity in business affairs to promote the interests of its members and the federation, is not to be doubted.

There is a large measure of control in federal council of branch policy and action. But the existence of the branch and its power and duty, subject to the rules, to conduct affairs designed to promote the objects of the federation are essential features of the federation as established by the rules.

It follows therefore that the power of the federal council to control the branch is itself subject to the implied qualification that it is exercisable only for the purpose of achieving the objects of the federation in accordance with the rules. Accordingly a resolution of federal council imposing upon a branch conditions incompatible with the exercise of its functions as a branch or merely for the purpose of impeding the branch therein or to supplant it in the exercise of the essential functions conferred on it by the rules would not be authorized by the relevant rule.

This is but an example of the dominant principle relating to all powers of the federation at federal or branch level that that only is authorized which is genuinely done to promote the objects of the federation. All else is ultra vires."

In my opinion, territorial considerations are to the forefront of the capacity of a branch to function in the manner contemplated by the Rules of the Federation. The territorial imperative is emphasised by Fullagar J. in Williams v. Hursey, (supra) at 81:

"But in truth, as has been said, the branch has in law no existence separate from that of the federation. It is merely an aggregate of members which is an integral part or section of the whole federation, having that degree of autonomy which is permitted to it by or under the constitution of the federation. It represents the federation in the port of Hobart. In and for the port of Hobart it is, so to speak, the federation. It is forbidden by rr 2 and 4 of Pt 11 of the federal rules to strike or to take any step to 'enforce any wages, hours, or conditions of labour' without prior approval of the governing body of the federation. But, subject to those limitations, and perhaps one or two others, it is set up and organized in the port of Hobart to do in that port whatever the federation may do in any Australian port. Because it has that character and those functions, it seems to me that acts of the branch within its local limits are prima facie acts of the federation itself."

In the same sense Smithers J. in Allen v. Townsend, (supra) at 443 spoke of a sub-branch "carrying the flag" in its territory.
Not every change of boundary constitutes a threat to the continued existence of a Branch or of its capacity to function. The question is necessarily one of degree. But in the present case, the change of boundary was, on any view, significant: it altered the character of the Branch beyond recognition. The Branch lost the whole of the north-west sector of the State and more than a quarter of its membership. In my opinion, the effect of the resolutions under challenge was thus to destroy the identity of Tasmanian Branch No 1 as it then stood. In this way, the resolutions undermined both the existence of the Branch and its capacity to function. It follows that, apart from the impact, if any, of the proviso to r.34(c), the resolutions were beyond power, absent the consent of the Branch.
Further, in my view, the proviso to r.34(c) cannot assist the respondents. Again, the question is one of construction only. In my opinion, the presence of the proviso is equivocal on the point now in contention. Although it requires a majority of two-thirds of Branch membership in order to effect an alteration to r.34(c) in respect of Tasmanian Branch No 2, such a provision is not necessarily inconsistent with the concurrent existence of an implied limitation on the power to alter the Rules of the kind I have described in the absence of the Branch's consent to that alteration. Ordinarily, that consent could be given by a resolution passed by a simple majority at a meeting of members of the Branch: no special majority would be required.
It follows, I think, that the resolutions were void as beyond the powers of the National Council to alter the Rules.
In the circumstances, it is unnecessary for me to consider the appellant's second argument.
I would allow the appeal and set aside the order of the learned judge. In lieu thereof I would declare that the resolutions now challenged are beyond power to the extent that they purport to change the boundaries of the Tasmanian Branch No 1 without the consent of that Branch. I would reserve liberty to the applicants to apply for further relief if necessary on such notice as a judge of the court may direct.

ORDER

Appeal dismissed.

[1985] FCA 168

23 APRIL 1985