In the matter of an application by Patrick James Brophy for an inquiry into an election in the Federated Clerks Union of Australia and in the matter of a reference of such application by the Industrial Registrar to..

IN THE FEDERAL COURT OF AUSTRALIA )

)

QUEENSLAND DISTRICT RDGISTRY	)	No. Q 3 of 1986
)
INDUSTRIAL DIVISION	)

IN THE MATTER of an

application by

Patrick

James Brophy for

an inquiry

into

election

the

Federated Clerks Union	of
Australia

(R No. 107 of 1986)

AND IN THE WATI'ER of a

reference

such

application

the

Industrial Registrar to the Federal Court of Australia

5 JUNE, 1987

K E U Y J.

REASONS FOR JUDGMENT

This is an

application by

Patrick James Brophy (the

applicant) for an inquiry under Part IX of the conciliation

and

Arbitration

Act

1904

(the

Act)

into

alleged

irregularities which he claims occurred in or in connexion

with the 1985 Branch triennial election, the results of which

were declared on 20 November 1985, (the election) for various

offices (set out on page 1 of the application) includipg,J~,,,,

those of the President, Vice-President and Secre

Central and Southern Queensland Branch (the Br

Federated Clerks' Union of Australia. The retur

2 .

for the election, which was conducted under S. 170 of the Act, was Mr. K. J. Fitzgerald, a member of the staff of the Australian Electoral Commission.

Mr. Tracey appeared for the applicant and

Mr.

Crooke

P.C. appeared with Mr. Amerena for twenty-three

persons,

named in a list filed in the court on

5 May 1987, which

included Bernadette Callaghan, the Branch Secretary.

On 16

December 1986, Spender J. granted leave to Mr. Fitzgerald to withdraw from these proceedings. The case was heard immediately after an application by Barry TKeVOK Linsket for an election inquiry into the election in respect of different

offices (matter number Q 2 of 1986).

By consent the material

admitted in evidence in each matter was treated

as being also

evidence in the other

matter.

The application claimed that a very large proportion

of the members of the Branch were

not financial in accordance

with the requirements of the Branch rules and were therefore

not	eligible to vote in the election in accordance with

Branch

Rule 21.

also

contained a claim

that

some

(unnamed) persons who were nominated

for

election

were

unfinancial and accordingly not eligible for nomination; however, no evidence was led in the course of proceedings in

support of the latter

claim and no argument was advanced in

support of it.

Accordingly, the question for determination

is limited to the financiality

possible voters and does

not extend to the financiality of the candidates.

Financiality is determined in accordance with

Branch'

Rule 15 which

provides (in sub-rules 1 and 3 ) as follows:-

"15 - Contributions

(1) The annual contributions payable to the Union, in advance, from the first day of January, 1978 shall be -

(a)

Senior Males and Females (21 years

age and over) .EO% of the annual

rate

of salary prescribed for a clerk at

years of age by the

Clerks

and

Switchboard Attendants' Award - State, as applicable on the first day of November in the preceding year.

(b) Junior

males

and

females

(Under

years of age) 50% of contributins determined from year to year in

accordance

with

the

provisions

sub-clause l(a) of this Rule.

....

(3)	The annual contribution shall be due

and payable on the first day	of January each
year.

Provided that Branch Council each year

may determine that there should be

Moratorium period

of not more than

three calendar months for the

payment

of contributions during which

period

members

shall

d emed

financial for the purposes	of	these
Rules.

Provided further that all members in arrears of payment of contributions upon the expiration of this MOKatOriLm Period, if any, shall cease to be

deemed

financial

members

and

shall

thereupon

forfeit

all

membership

rights and privileges until all such

arrears of contributions, or Other

outstanding fines or levies are paid.

Provided

further

that only those

members who pay all arrears of contributions, or other outstanding fines or levies, within the Moratorium

Period, if any, OK who do so on OK before the first day of January each

year, shall

be deemed to retain an

unbroken

continuity

financial

membership for the	purposes of	these
Rules. "

Branch Rule 21

provides:-

"Only members of the Union who are financial

on the 30th September in the year

which

the triennial ballot is to be held shall be

entitled to	vote	in	such	triennial
election. "

The claim that potential voters were unfinancial was

based upon the giving

of a 20% "rebate" in 1985 to a very

large proportion of the Branch members.	A Branch Council
Meeting carried the following resolution:-

"That a rebate of 20% be given to all persons who pay their Union dues prior to 31st hrch, 1985 and to all persons on a

payroll deduction scheme operated	by	their
employer for the entire year."

The application set out the terms of that resolution,

stated

to have been carried on 8 December 1984; the application was supported by a statutory declaration by the applicant and the

terms of the resolution were confirmed

by an exhibit to an

affidavit sworn by Bernadette Callaghan.

There was

evidence

in her affidavit that,

out of "some 16,929" financial members

at the time of the election, "some

15,724" had received a

rebate and that the number who did not receive a rebate

totalled only 1,205. The affidavit also contained rnaterlal

intended to demonstrate the rationale for the granting of

rebates.

Mr. Tracey submitted that the Branch Council

had

power to grant a rebate. In support of that submission he

relied

upon

three

rules.

(a) Federal

Rule

7(2)

which

provides that:

"Contributions payable to the Union by any member shall be such sum as is provided by the Rules of the Branch of which he is for

the time being

member

. . . I '

(b) Federal Rule 12(3), which states that a Branch Rule

shall, to the extent

of any inconsistency with a Federal

Rule, be void.

- the relevant provisions

of which have been set out above

- which fixes the amount

the "annual contributions payable to the Union in advance".

It is clear that there is no express power to grant a

"rebate". Mr. Tracey submitted that

a power to grant rebates

cannot be implied if it would be contrary to

an express

power. He relied upon the express provision, contained in

Federal

Rule

7(2),

requiring

that

amount

the

contributions shall be provided by the Branch Rules. On that

basis,

the

purported

granting

rebate

simple

resolution of the Branch Council

- as

distinct from an

amendment of the Branch Rules

- was contrary to the express

requirement that the amount of contrlbutions

hall

"provided by the Rules of the Branch". He Submitted that the amount of the contributions "payable ... by any member" could not be "provided" (or amended) by a simple resolution carried

by the Branch Council.

In this connexion it may be noted

that Branch Rule 60, which gives the Branch Council

power to

amend the Branch Rules, specifically requires (subject to one

exception not presently material)

"twenty-eight ( 2 8 ) days'

notice of motion in writing,

of the specific

amendment",

given to the Branch

Secretary.

Mr. Crooke submitted that there was

an implied

power

in the Branch Council to grant a rebate, as being incidental to its powers of management, and sought to rely on Branch

Rule 20(a) and Branch Rule

4 ( j ) .

Branch

Rule

20(a)

vests

" upreme

control

and

management of the Branch" in Branch Council. In my opinion that general power cannot override the express provisions in

Federal Rules	7 ( 2 )	and 12(3) and in Branch Rule 15(1) and
(3).

Branch Rule 4(j) is a statement of one of the objects

of the Branch, namely, to "assist members by financial or

other means in such circumstances as the Branch Council may

deem proper". Again,

that general statement cannot, in my

opinion, override Or contradict the express provisions in

the

rules cited.

Further, even

if there were a rule conferring

an express power to "assist members by financial ... means in

such circumstances as

the Branch Council may deem proper

. . . ' I ,

in my

opinion it would not authorize the resolution

purporting to give the

rebate of 20%.

Mr. Crooke also relied on

ss. 2(e) and (f)

of the Act

and the material

in the affidavit

of Bernadette Callaghan.

Given this material it was argued that the granting of a

rebate was properly within

the powers

of the Branch in the

ordinary

conduct of its affairs for the

benefit of the

members of the Branch.

He sought

to gain support from the

statement by Fullagar J. in Williams v Hursey (1959) 103 CLR

30 at 57 that:

... any action

which

can

fairly

and

reasonably be regarded as likely to further

the interests

of the organization and its

members is within the objects stated in the rules, and therefore within the powers of

the federation acting directly	or through
the branch. "

Although the Branch Council has certain powers in

order to further the objects of the Branch, in my opinion there cannot be an implied power to act in a manner contrary to any express provision in either the Federal Rules or the

Branch Rules; that proposition does

not in any way conflict

with any of the statements by Fullagar J. relied upon by

Mr.

Crooke. It may be added

that

Williams

is clearly

distinguishable on the facts because in that case there was an express power (In rule 3(1) of the Hobart Branch Rules of

the Waterside Workers' Federation

of Australia) to impose a

levy. When the rules in the

present case are read as a

whole, in my

opinion they did

not confer upon the Branch

Council a power to give

a rebate.

I therefore find that an irregularity has occurred in the election in that, on the material before the court, the members (more than 6,400) who voted in the election must have included members who had received a rebate and were therefore

unfinancial

and

not

entitled

vote by reason of the

provisions of Branch Rule 21.

I have formed the opinion

that,

on the basis of

the

figures contained

paragraph

Ms.

Callaghan's

affidavit,

"the

result

of the

lection may have

been

affected" ( S . 165(4)). In Re Vehicle Builders Employees' Federation of Australia, South Australian Branch; Ex parte

Noack (unreported

delivered 23 April 1987) I agreed with

the opinion expressed by Toohey J.

In Re Australasian Meat

Industry Emplovees Union, Western Australian Branch; Ex parte Ferquson (unreported - delivered 5 November 1986) that, when performing its statutory duty under S . 165(4), the court is to look "at real not merely theoretical possibilities". When the figures are such that the irregularity, found to have

Occurred in the

election,

affected

approximately

15,724

members of 16,929

members who were potential voters

the

election, and more than

6,400 of the 16,929 members voted, in

my opinion it is clear that there is a "real possibility

Cthat3 the result of the election may have been affected	...	0,.
by the irregularity.

Section 165(3) provides that, "if the Court finds that an irregularity has occurred,

the Court may ... make one or

more of the following orders . . . ' I .

Mr. Tracey submitted that

the use of the word "may" in that sub-section does

not confer

upon the court a discretion to refuse to make any order

the sub-section.

his submission the court is under a

duty, upon finding in the present case that an irregularity has occurred, to make at least one of the orders authorized by S. 165(3). He relied upon the principles discussed by the

High Court in W a r d v

Willlaw (1955) 92

CLR 496 at 505-508,

which, in his submission, applied to the court's function

under S. 165(3).

A n argument to the same effect was considered in m

v Amalqamated Metalworkers' and Shlpwrishts' Union

(1981) 56

FLR 124.

In that case Sheppard J., at 149-150, recognised

the strength of the submission

but nonetheless "reached the

conclusion that there is a residual discretion vested in

the

court to refuse to act if in all the circumstances that is

what the public interest or the interest of members or

particular groups of members requires". In Noack' S

10.

case (supra), after hearing argument on

that question,

expressed my agreement with Sheppard

J. as to the existence

of a residual discretion to refuse

to make any

orders, saying

that the court "could decline

to declare the

election invalid

if there were cogent reasons favouring that course in all the

circumstances of the case".

In the present matter Mr. Tracey has, very properly,

referred the court to the decision of a Full Court of this court in Cook and Others v Crawford and Others (1982) 62 FLR

34. In that case all members of the Court expressed the view

that the court has a discretion to refuse to make the orders

sought in an application under S. 141 of

the Act - see pp.

66, 81 and 116-120.

In Allshorn

Stapleton

and

Others

(1984) 4 FCR 236 at 241 a Full Court held that "in the exercise of its discretion under S. 141(1G) the court has power to make no order". On the other hand, Mr. Tracey

pointed out that, in relation to an application under S.

140

of the Act, Fullagar J. in

Commonwealth

Industrial

Court: Ex parte The Amalqamated Enqineerinq Union, Australian

Section (Shearer's case) (1960) 103 CLR 368 at 378 expressed

the opinion that "if the conditions of jurisdiction exist,

the jurisdiction must be exercised and the appropriate order

made" (see Cook v Crawford supra at 117-119 per Sheppard J.).

Having considered the authorities, and the section in

its context with a

view to ascertaining "the real intention

11.

of the legislature” (m

v Williams at 505), I adhere to the

opinion expressed by me in Noack’s case that the court has

discretion to refrain from making any

of the Orders sought

under S. 165(3) of the Act, but that the discretion to refuse‘

to make Orders should only be exercised where “cogent reasons

favouring that course“

exist.

Towards

the

end of the

hearing

fairly

brief

submissions were heard as to whether the court should,

in the

exercise of its discretion, refuse to make orders.

Reference

was made to the length

of time during which there had been

practice of “giving rebates” and the possibility

action

being taken under Federal Rule

9(5) to cancel those

arrears

of contributions (possibly extending over a number of years) which have resulted from the “rebate“; however, that sub-rule on its face appears to require the making of ”a proper case“,

and would possibly require

an application by a member who had

been given a rebate before the power could be exercised

“to

cancel the whole

or any part of Cthat3 member‘s arrears”.

It may be possible for the rules to be amended

by the

Branch Council in such

a way that members who had paid

the

full contributions payable except for the “rebates” given

over a period of years by the Branch Council, would not be

unfinancial by reason of taking advantage of those rebates.

It is not appropriate for the court in this proceeding to

express any opinion as to whether

that course - or any other

12.

course of action - should be followed, nor as to whether such

an amendment to the Branch Rules would provide an effective

solution as a matter of

law. If

the Branch Council decided

to amend the

rules, then any such amendment

to the

Branch'

Rules would be subject "to the approval

of the National

EEecutive" (Federal Rule 12(2)(a)); further,

it would "not

have

ffect

until

... the

CIndustrialI

Registrar

has

certified .:I

under S. 139(4) of the Act.

In all the circumstances, including in particular the

length of

time during which there has been

a practice

"giving rebates" and the large number

branch members

affected by that practice, the further hearing of this

inquiry will be adjourned until

2.15 p.m.

on Thursday,

June 1987 in Melbourne; that

is the time and place already

fixed for the further hearing

of matter Q

2 of 1986.

That

adjournment is to enable the

parties, and any other bodies

within the Union

or the branch, to consider

the situation

resulting

from

the

finding,

made

by the

court in this

proceeding, in relation to the "rebates".

The parties

shall

have liberty to apply.

They may file - and serve upon any

opposing party - on or before 2.15 p.m.

on Monday 22 June

1987 any further material upon which they may wish to rely on 25 June 1987; on that date the court will hear submissions as to whether the court should, in the xercise of its

13.

discretion, refuse to make any Orders under S. 165(3) of	the
Act.
I certify this and the preceding twelve
pages to be a true copy of the Reasons for Judgment of his Honour Mr. Justice Keely
Associate:

14.

Dates of Hearing

: 7 May, 1987

Counsel for the Applicant

: Mr. R. Tracey

Solicitors for the Applicant

: Messrs. Hullins 6 Mullins

Counsel for the Respondent

: Mr. Crooke Q . C . and

Mr.

Amerena

Solicitors for the Respondent :

Messrs. Callaghan & Reidy

[1987] FCA 288

5 Jun 1987