In the matter of an Application by the Hospital Employees Federation of Australia

[1981] FCA 74

VICTORIA DISTRICT REGISTRY	)	V. No. 4 of 1 9 8 1
1
INDUSTRIAL	D I V I S I O N	)

I N THE NATTER of t h e CONCILIATION

AND ARAITRAy?ON ACT 1 9 0 4 ; and

i

I N THE MATTER of an appllcatJ.on

under Sec t lon 1.71D o f t he A c t

NORTHROP J. EX TEMPORE JUDGMENT 25 MAY 1 9 8 1 .

:

Th l s i s an appl ica t lon brought by the Hospi ta l Employees

Fede ra t lon o f Aus t r a i i a pu r suan t t o s.171D o f t h e C o n c i l i a t i o n __-- and

A r b i t r a t i o n A c t 1 9 0 4 s e e k l n g t h e r e c o n s t l t u t i o n of a branch of t h e

i

f e d e r a t l o n . The f e d e r a t l o n is an orga.nlzat ion under the A c t

and it comprlses a number of branches lncluding two branches i n

N e w South Wales a t t h e p r e s e n t t l m e known a s t h e No. 1 branch and

l

the No. 2 branch, see r u l e 34 of t h e f e d e r a l r u l e s o f t h e

f e d e r a t i o n .

The applicat . lon i s brought under sub-sect lon (1) of

s.171D of t h e A c t s e e k l n g f l r s t l y a d e c l a r a t i o n t h a t t h e New

South Wales No. 2 branch of t h e f e d e r a t i o n h a s c e a s e d t o e x l s t

. " 2 . .

o r t o f u n c t i o n e f f e c t i v e l y a n d t h a t t h e r e a r e no e f f e c t l v e means

u n d e r t h e r u l e s o f t h e f e d e r a t l o n o r the branch by which lt can

b e r e c o n s t l t u t e d o r e n a b l e d t o f u n c t l o n e f f e c t l v e l y . N o t l c e o f

t h e a p p l i c a t i o n was g l v e n t o t h e financial members o f t h e No. 2

branch, belng 7 0 p e r s o n s , t h e names and addresses be lng ob ta ined

f r o m t h e r e c o r d s o f t h e f e d e r a l o f f l c e o f t h e f e d e r a t i o n a n d

confirmed by the deduct lon shee ts whereby the employers o f those

members deduct the unlon dues f rom the wages of those members.

No response w a s had t o t h a t n o t l c e o f t h e a p p l i c a t l o n s e e k i n g

d e c l a r a t i o n .

On t h e d i r e c t i o n s h e a r i n g o f t h e a p p l l c a t l o n , a f t e r I

r e f e r r i n g t o t h e f a c t o f t h e s e r v l c e o f t h e a p p l l c a t l o n o n t h e

members of NO. 2 b ranch , o rders were made t h a t t h e matter be set

down f o r h e a r i n g a t a time t o be f l xed by t h e R e g l s t r a r . N o t i c e

of t h e d a t e o f t h e h e a r i n g o f t h e a p p l i c a t i o n l l k e w l s e was served

on each o f t he members o f t he No. 2 branch. There has been no

communicatlon from any of those members except one who s a y s t h a t

she i s rlo l onge r a member bu t , o f more Importance, no person has

o b ~ e c t e d t o t h e form of the scheme set o u t I n th . e a p p l l c a t l o n .

I n view o f t h e n o t i c e s g i v e n t o members o f t h e No. 2 branch It

is n o t n e c e s s a r y t o make any f u r t h e r o r d e r o r d i r e c t i o n o r d l r e c t

n o t l c e t o b e g l v e n by way o f adve r t l s emen t o r o the rwise pu r suan t

t o s.171D 1 6 ) ..of t h e A c t .

The evidence l n suppor t o f the makinq of the

d e c l a r a t i o n a p p e a r s f r o m t h e a f f i d a v l t oE Leslle Georqe Butler,

sworn on 2 A p r l l 1 9 8 1 and f l l e d h e r e i n , t o g e t h e r w i t h o r a l

evidence given today. I do not propose to repeat the substance

of that materlal except to say that I am satlsfled as to the

truth of the facts sworn to and they establish the fact that
the No. 2 branch 1s not functloning at all at the moment and

also has ceased to functlon effectrvely.

Under s.l71D(l) of the Act an organlzatlon, In this

case the federatlon, may apply to the court for a declaration

that a part of	the organlzation, lncluding a branch, has
ceased to exist	or to functlon effectlvely and there are no
effectlve means under the rules of the organlzation or	I

branch by whxh it can be reconstltuted or enabled to functlon

effectively and, in those clrcumstances, the court has

4

i ~urisdlction to hear and determine the application and to

i make a declaration accordingly.

The material before the court shows that attempts

have been made to have the branch function effectively and those

attempts have extnnded over some years.	The number of flnanclal
members is small and havlng regard to the baslc requlrements	of

i

branches at the current time a membership of 70 1s hardly

sufflcient to support the vlew that a branch with that memhershlp

could function effectively. There are no office bearers and no

elections have taken place for many yeaxs and	on the material
before the court	I am satisfled of the conditions prescribed by

. . 4 .

sub-section (l) of s . 1 7 1 D .	Accordingly the court makes the
declaration in the form sought	as follows:

' I 1 _ , that the New South Wales No. 2 Branch of The

Hospxtal Employees Federatlon of Australia has ceased to exist or to functlon effectlvely and that there are no effectlve means under the Rules-of the Federatlon or the sald Eranch

by which it can be reconstituted	or enabled to
function effectively."
In the circumstances of this case there is no need	to

make the further or alternatlve declaration sought In the

appllcation Itself.

The question then arlses as to what order should be

made under sub-section ( 2 ) of s.171D.	That section reads, and
I quote from it	-

"Wnere the Court makes a declaration under
sub-sectlon (1) the Court may,by order,
approve a scheme for the takmg of actlon
by ... an officer ... of the organlzation ... to enable it to functlon effectlvely ..."

The "It" In the presentcase refers to the branch whlch has ceased

to function effectively.

What 1s belng sought by the present scheme 1s to create

what might be descrlbed as an amal.gamatlon of the No, 1 and No. 2

branches in New South Wales. The current federal rule	34 provides
as follows:

!

" ( a ) The re sha l l be a l ine o f demarcac lon of

members a s f o l l o w s : Group A - ...'I

There are then set o u t a number o f pe r sons e l ig ib l e fo r membersh ip

bu t t hese exc lude ce r t a ln employees employed i n ce r t am a reas .

Group B r e f e r s t o t h e e m p l o y e e s who are exc luded l n

GroupA, and Group C i n c l u d e s a l l p r o f e s s i o n a l o f f l c e r s and nurses .

Sub-ru le (d) p rovldes -

" I n t h e S t a t e o f N e w South Wales t h e r e s h a l l b e

two	Branches.	No.	1 Branch	s h a l l	c o m p r l s e	a l l
t h e members of	Group	A.	No.	2	B r a n c h	s h a l l

comprlse a l l t h e members of Group C."

What 1 s s o u g h t l n t h e scheme is t o create o r t o form one branch

on ly i n N e w South Wales a s f o l l o w s -

" I n t h e S ta te o f N e w South Wales t h e r e s h a l l b e

one Branch comprlslng a l l t h e members i n Groups

A and C . "

A t t h e p r e s e n t time t h e r e are some 1 , 1 0 0 members i n b r a n c h No, 1

and some 6 9 members i n branch No. 2 .

By t h e r u l e s o f t h e f e d e r a t l o n t h e n a t i o n a l c o u n c i l i s

c o n s t i t u t e d u n d e r r u l e 1 2 and under ru le 13 h a s t h e management

and con t ro l o f t he a f f a i r s o f t he f ede ra t1 .on and one o f t he

1	p a r t i c u l a r p o w e r s c o n f e r r e d	upon	it	1s	a	power	t o r e p e a l , a l t e r
l

and add t o t h e r u l e s o r a n y o f them. Rule 31 p r e s c r i b e s t h e

p r o c e d u r e t o b e f o l l o w e d t o e n a b l e t h e n a t l o n a i c o u n c l l t o

. . 6 . .

- G -

e x e r c l s e i t s power o f a l t e r l n g r u l e s , a n d I read ou t sub - ru l e (1) -

"Sub jec t t o Ru les 35 (a ) and 36 of these Ru les

no new r u l e s s h a l l b e made, nor shal l any of

t h e R u l e s o f t h e F e d e r a t i o n b e a l t e r e d , amended

o r r e s c m d e d , e x c e p t by and a t a meetmg of

the Nat lonal Councl l . Not lce of any proposed

new r u l e , a l t e r a t l o n o r r e s c i s s l o n s h a l l b e

s e n t t o a l l Branch Sec re t a r l e s a t least s1x

weeks	p r l o r	t o	the mee t lng o f t he Na t iona l
Council	a t whlch	t h e matter	1 s t o be dlscussed.

Branches sha l l be bound t o i n f o r m members a t the

next General Meet lng of the proposed addi t ion,

a l t e r a t l o n s o r r e s c i s s i o n o f R u l e s and members

s h a l l b e e n t i t l e d t o l n s t r u c t t h e i r d e l e g a t e t o N a t i o n a l C o u n c i l a s t o how t h e y s h a l l v o t e o n

the subml t t ed p roposa l s ..."

Prov i s ion	i s	then	made	f o r t h e c a l l i n g o f s p e c i a l m e e t i n g s I f	'
no	genera l meet ing	1 s	t	o	be he ld w l th ln t he pe r lod o f s ix weeks

p r l o r t o t h e n e x t m e e t i n g o f n a t l o n a l . c o u n c l l t o d e t e r m i n e t h e

ques t lon .

The scheme which 1 s proposed is d l r e c t e d t o a u t h o r i z i n g

a n a l t e r a t i o n t o r u l e 3 4 m t h e fo rm a l r eady i nd ica t ed by

s u b s t l t u t l n g a new s u b - r u l e ( d ) , b u t b e c a u s e o f r u l e 31 t h e

p r o p o s e d a l t e r a t i o n c a n n o t b e d e a l t w i t h e f f e c t l v e l y s i n c e t h e

N o .	2 branch of	New South	Wales	has	ceased	t o e x l s t o r t o f u n c t l o n
e f f e c t l v e l y .	To	overcome t h i s	d i f f i c u l t y	t h e	scheme	proposed

1s as fo l lows - .

" ( a ) Within 28 days o f t he da t e o f t he Orde r o f

t h l s C o u r t , thne N a t l o n a l S e c r e t a r y o f t h e

F e d e r a t i o n s h a l l g i v e n o t l c e t o t h e S e c r e t a r y of each Branch of t h e F e d e r a t l o n ( o t h e r t h a n

t h e New South Wales No. 2 s ranch) and to each

member o f t he	New South	Wales	NO.	2 Branch
t h a t a t I ts nex t mee t inq t o	he	he ld	m	October

1 9 8 1 , the Nat ional Counci l shal .1 consider a

r e s o l u t i o n t h a t F e d e r a l Rule 3 4 ( d ) b e a l t e r e d

so as t o r e a d -

'(d) I n t h e S t a t e of N e w South Wales there

sha l l be one Branch compr lsmg a l l t h e

members I n Groups A and C . '

Wi th ln the	6	weeks	preceding the meet ing of the
Nat lona l Councl l	a t	w h i c h t h e s a i d r e s o l u t i o n	1s

t o be	consldered,	each	Branch	(other	than	the
N e w	South	Wales	No. 2 Branch)	sha l l	ho ld	a

genera l meet lng of	members	a t whlch the Secre ta ry
o f t he Branch sha l l l n fo rm the	members	p r e s e n t
o f t he p roposed a l t e r a t lon t o t he Ru les and	a	t
whlch the members p r e s e n t s h a l l b e e n t i t l - e d t o i n s t r u c t t h e d e l e g a t e o r d e l e g a t e s o f t h a t B r a n c h

t o t h e N a t l o n a l C o u n c l l as t o how such de l ega te

o r d e l e g a t e s s h a l l v o t e on t h e p r o p o s a l .

I n t h e event t h a t t h e s a l d r e s o l u t i o n 1s c a r r l e d

N a t i o n a l S e c r e t a r y s h a l l f o r t h w i t h a p p l y t o t h e	a t t h e m e e t l n g o f t h e N a t l o n a l C o u n c l l , t h e a l t e r e d R u l e .
Upon c e r t l f i c a t i o n of t h e a l t e r e d R u l e -
(i) t h e members o f t h e New South Wales

No. 1 Branch and the N e w South Wales

No. 2 B r a n c h s h a l l become t h e members

o f t h e New South Wales Eranch,

(ii) the funds and p rope r ty o f t he N e w

South Wales No. l Branch and the N e w

South Wales No, 2 B r a n c h s h a l l become

the funds and p rope r ty o f t he	N e w
South Wales Branch,

(ili) t h e O f f i c e r s , t h e members o f t he

Commlttee of Management, t he De lega te s

t o N a t l o n a l C o u n c i l a n d a l l o t h e r

de l ega te s ,	r ep resen ta t ives	and	employees
o f t h e	New South Wales	No.	1 Branch

s h a l l b e t h e O f f i c e r s , t h e members of

t h e Commlttee of Management, t h e

de l ega te s t o Na t lona l Counc l l and o the r

d e l e g a t e s ,	r ep resen ta t ives	and	employees
of t h e New South	Wales	Branch,	and,

( i v ) t h e O f f i c e r s o f t h e F e d e r a t l o n a n d

the Branches o f t he Fede ra t ion sha l l

t a k e	a l l	s t e p s n e c e s s a r y t o g l v e e f f e c t
t o t h e O r d e r o f	t h l s	Court ."

l

The scheme as p r o v l d e d € o r i n t h a t n o t i c e , i s a scheme

wi th ln	sub-sec t lon	( 2 ) of	s.171D	and	1s d i r e c t e d t o	maklnq
e f f e c t l v e n o t	so much	t h e No.	2	h ranch bu t	t o Inco rpora t e	the

. .S. .

members who would otherwlse not	be ellglble to be members of the
No. 1 branch to become members of	the No. 1 branch thereby to

become members of an effectlve body of the federatlon once

more and thus effectlve In the affairs of the organizatlon

My only cmcern is whether sub-section ( 3 ) of s.171D

requlres further action to be taken	or action of a dlfferent
kmd.	That sub-sectlon reads -

“Before making an order under this section the

Court shall satlsfy itself that the order would

not do substantlal ~n-~ustlce to the organlzation

or to any member of the organlzation.“

Two matters call for consideratlon. Firstly, the

court was informed that at the present time an electlon	1s taking
place for the offlce bearers and delegates	in the No. 1 branch
and the new offlcers wlll take office in September of thls	year
and under the rules wlll hold office for	four years. This means
that if the rule is altered In accordance wlth	the orders sought
the 69 members of the	No. 2 branch are not able to exercise thelr
right of voting in the current election and will not have a
similar right except	by way of posslbly filling casual vacancies
untll the next general elections In four	years’ tlme.

Havlng regard to the fact that eJ.Ch of those members

has had knowledge of the form of scheme proposed and no one has

raised oblectlon to it, havlng regard also to the fact that	the
No. 2 branch is	not functloning and cannot functlon effectlvely

and havmg regard al.so to the nuntbers of members involved in the

two b r a n c h e s , t h e c o u r t i s s a t l s f l e d t h a t n o s u b s t a n t i a l - injustice

i s caused to any of t h e members o r p e r s o n s who were members of

t h e No. 2 branch by r e a s o n o f n o t h a v i n g t h e r i g h t t o v o t e a t t h e

c u r r e n t e l e c t l o n s .

The s e c o n d m a t t e r r e l a t e s t o t h e f u n d s a n d p r o p e r t y

o f t h e No. 2 branch whlch a t t h e moment comprlses some $7000 .

This i s h e l d 111 a bank account , the payments In belng t h e

deduct ions made by the employe r s o f t he members by way of dues

t o t h e f e d e r a t i o n , t h e p a y m e n t s o u t b e i n g a u t h o r l z e d by t h e

f e d e r a l s e c r e t a r y a n d t h e two n a t l o n a l t r u s t e e s . A t t h e p r e s e n t

time t h e i n d l v l d u a l members of the former No. 2 branch have nq

con t ro l ove r t hose funds and t hey will become p a r t of t h e f u n d s

o f t h e new b r a n c h t o be c r e a t e d a n d l n d l r e c t l y t h e 6 9 members

w i l l g a i n t h e b e n e f i t f r o m t h a t t r a n s f e r of funds and the power

of	t h e b r a n c h t o d e a l	e f f e c t i v e l y w l t h t h a t	p r o p e r t y .	L l k e w l s e ,
t h e c o u r t	i s	s a t i s f l e d t h a t t h e t r a n s f e r o f t h o s e f u n d s	will	n o t

d o s u b s t a n t l a l ~ n ~ u s t l c e t o any member o f t h e o r g a n i z a t i o n .

Accord lng ly , t he cou r t proposes t o make t h e o r d e r

sought and to approve the scheme proposed by t h e o r g a n l z a t l o n ,

The	c o u r t	makes	t h e d e c l a r a t i o n	111	t h e f o r m a l r e a d y i n d i c a t e d
and	appearing	In	paragraph	1	o f t h e a p p l l c a t i o n a n d t h e c o u r t