In the matter of an application by the Transport Workers Union of Australia
[1992] FCA 465
•29 JUNE 1992
AN APPLICATION BY THE TRANSPORT WORKERS' UNION OF AUSTRALIA
No. V I16 of 1992
FED No. 465
Industrial Law - Evidence
(1992) 37 FCR 16
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Gray J.(1)
CATCHWORDS
Industrial Law - registered organisation - validation - invalidities in management or administration or the making of appointments - purported delegation to federal secretary of power to appoint organisers - federal committee of management had no power to delegate power - whether validating order should be made - whether order would do substantial injustice - validation of nominations in elections - other candidates validly nominated - whether substantial injustice by deprivation of right to be declared elected - whether substantial injustice requires balance of individual detriment against benefits to the organisation and others.
Evidence - issue estoppel - finding in other proceedings that persons invalidly appointed to positions - whether those findings bind some of parties to those proceedings in validation proceedings.
Words and phrases - "invalidity", "substantial injustice".
Industrial Relations Act 1988 ss. 3, 223, 255, 256, 257, 258.
Conciliation and Arbitration Act 1904 (repealed) s.171C.
Uniform Companies Acts s.366.
Re Food Preservers' Union of Australia (1988) 79 ALR 138.
Re Australian Building Construction Employees and Builders' Labourers' Federation (1978) 46 FLR 308.
Kayne v. Banks (1978) 22 ALR 255.
Troja v. Australasian Meat Industry Employees Union (1978) 46 FLR 340.
Re Election for Office in the Transport Workers' Union of Australia, Western Australian Branch (Federal Court of Australia, French J., 12th February 1992, unreported).
Ransley v. Australian Public Service Association (Fourth Division Officers) (1985) 12 IR 55.
Re Federated Clerks Union of Australia; Ex Parte Tanner (1986) 70 ALR 79.
Re Application by McGee for an Inquiry into Elections in the Transport Workers' Union of Australia, Victorian Branch (Federal Court of Australia, Keely J., 16th March 1992, unreported).
R. v. Soothill; Ex Parte Ashdown (The Times, 2nd April 1955).
Hilton v. Brebner (1986) 13 FLR 89.
Re Carter; Re Federated Clerks Union of Australia (1989) 31 IR 470.
Re Australian Continental Resources Limited (1975) 10 ACTR 19.
Re Compaction Systems Pty. Ltd. (1970) 2 NSWLR 477.
Allen v. Laragy (1975) 7 ALR 261.
HEARING
MELBOURNE
#DATE 29:6:1992
Solicitor for the applicant: Ryan Carlisle Thomas
Counsel for the applicant: Mr J. Shaw QC with Mr M. Carn
Solicitor for Mr Keily and Mr Biltris: Harry Nowicki and Co.
Counsel for Mr Keily and Mr Biltris: Dr C. Jessup QC with Mr G. Moore
Solicitor for Mr Mauchline: Howie and Maher
Counsel for Mr Mauchline: Mr D. Staindl
Solicitor for Mr Elliot: Wilson Potter
Counsel for Mr Elliot: S. Howells.
ORDER
THE COURT DECLARES that invalidities have occurred in the management and administration of the Transport Workers' Union of Australia ("the Union") and in the making of appointments in the Union, in that:
(a) on 6th March 1990, Dennis Ronald Elliott was appointed as an organiser; and
(b) on 18th April 1990, Donald Mauchline was appointed as an organiser, each such appointment being made by the federal secretary of the Union, who had no authority under the rules of the Union to make such appointment.
Being satisfied that the following orders will not do substantial injustice to the Union, or to any member or creditor of the Union, or to any person having dealings with the Union, THE COURT ORDERS THAT:
1. The appointment of Dennis Ronald Elliott as an organiser of the
Union be validated from and after 6th March 1990, for all purposes, including the nomination of Dennis Ronald Elliott for the office of federal assistant secretary in the elections currently being conducted in the Union.
2. The appointment of Donald Mauchline as an organiser of the Union
be validated from and after 18th April 1990, for all purposes, including the nomination of Donald Mauchline for the office of Victorian branch secretary/treasurer in the elections currently being conducted in the Victorian branch of the Union
NOTE: Settlement and entry of orders is dealt with by O.36 of the Federal Court Rules.
JUDGE1
The applicant in this proceeding, the Transport Workers' Union of Australia ("the Union") is an organisation, registered pursuant to the Industrial Relations Act 1988 ("the Act"). It seeks orders pursuant to s.258 of the Act, that invalidities have occurred in the Union in the appointments of Dennis Ronald Elliott and Donald Mauchline to the positions of organiser, by reason of failure to comply with rule 24(d) of the rules of the Union, and orders to rectify those invalidities, and to cause Mr Elliott and Mr Mauchline to be treated for all purposes as having been validly appointed as organisers.
In truth, each of Mr Elliott and Mr Mauchline was purportedly appointed as an organiser by Mr Ivan Hodgson, the federal secretary of the Union, the federal committee of management of the Union having purported to authorise him to make the appointments. Mr Elliott's purported appointment occurred by letter dated 6th March 1990 from Mr Hodgson to Mr Elliott. Mr Mauchline's appointment occurred by letter dated 18th April 1990 from Mr Hodgson to him. What the Union now desires is a declaration that each of these appointments amounted to an invalidity in the management or administration of the Union, or in the making of an appointment, and orders that those invalidities be rectified and the consequences of them be negatived or modified, so that they become, in effect, valid appointments from the dates on which they were made.
Pursuant to orders made on 15th April 1992, the application was advertised in a metropolitan daily newspaper in each of the capital cities in Australia. The advertisements do not appear to have prompted any person to seek to participate in the proceeding. Apart from the applicant, the only participants were Mr Elliott and Mr Mauchline, each of whom appeared by counsel, and Christopher Keily and John Biltris, for both of whom counsel appeared.
Mr Keily is the applicant in proceeding No. V I4 of 1992 ("the election inquiry"), an application for an inquiry into elections within the Union and its Victorian branch. That inquiry is in progress before Keely J. In it, Mr Keily seeks findings that a number of irregularities have happened in relation to the elections, and consequential orders pursuant to s.223 of the Act. Among the irregularities alleged are the proposition that Mr Elliott's nomination for the office of federal assistant secretary and Mr Mauchline's nomination for the office of Victorian branch secretary/treasurer are invalid, because each was at the relevant date ineligible to nominate for the office. The ineligibility alleged stems from the alleged invalidity of the appointments of Mr Elliott and Mr Mauchline as organisers. The avowed purpose of the present proceeding is to validate those appointments, and therefore to seek to eliminate the irregularities alleged in connection with the nominations of Mr Elliott and Mr Mauchline. Mr Keily has nominated for the office of Victorian branch secretary/treasurer in the elections the subject of the inquiry. Mr Biltris has nominated for the office of federal assistant secretary in those elections. Mr Keily and Mr Biltris therefore appeared in the present proceeding to oppose the making of any orders rectifying, or negativing or modifying the consequences of, the appointments of Mr Elliott and Mr Mauchline as organisers.
The relevant provisions of s.258 of the Act are as follows:
"(1) An organisation...may apply to the Court for a determination of the question whether an invalidity has occurred in:
(a) the management or administration of the organisation...;
(b) an...appointment in the organisation...; ...
(2) On an application under subsection (1), the Court may make such declaration as it considers proper.
(3) Where, in a proceeding under subsection (1), the Court finds that an invalidity of the kind referred to in that subsection has occurred, the Court may make such order as it considers appropriate:
(a) to rectify the invalidity or cause it to be rectified;
(b) to negative, modify or cause to be modified the consequences in law of the invalidity; ...
(5) The Court shall not make an order under subsection (3) without satisfying itself that such an order would not do substantial injustice to:
(a) the organisation;
(b) any member or creditor of the organisation; or
(c) any person having dealings with the organisation."
It will be seen from these provisions that a proceeding of this kind involves three stages. The first is the determination whether an invalidity of one of the kinds contemplated by subs. (1) has occurred and the making of any consequent declaration under subs. (2). The second is the consideration whether the Court should make an order under subs. (3). If it is determined that such an order should be made, at the third stage, the Court must consider whether such an order would do substantial injustice to any of the persons described in subs. (5). It is convenient to deal with these three stages under separate headings.
WERE THERE INVALIDITIES?Rule 22(a)(I) of the rules of the Union provides, so far as is relevant, as follows:
"...a person shall not be eligible to nominate for any office in the Union or any Branch...of the Union unless, at the date of close of nominations for election to such office he or she is:-
(i) a financial member of the Union, and
(ii) either is employed in the industry in connexion with which the Union is registered and in respect of such employment is entitled to membership of the Union pursuant to Rule 4, or is a person holding office as Federal Secretary, Federal Assistant Secretary, Branch Secretary, Branch Industrial Research Officer or Organiser (whether elected or appointed) or as organiser appointed by Federal Council or Federal Committee of Management."
Among the powers of the federal council found in rule 5A(d) of the rules is "the appointment (and dismissal) of an organiser or organisers to assist in the work of the Union under the direction of the Federal Secretary." The federal committee of management is a smaller body, which meets more frequently than the federal council. It is given an express power in rule 24(d) "to appoint (and dismiss) an organiser or organisers to assist in the work of the Union under the direction of the Federal Secretary."
In the election inquiry, it is not in dispute that Mr Elliott and Mr Mauchline were not employed in the relevant industry at the date of close of nominations, and did not hold any of the offices specified in rule 22(a)(I)(ii), unless each had been appointed validly as an organiser by the federal committee of management. Issue was joined in the election inquiry on the validity of the appointment of each. All of the parties to the present proceeding were parties to the election inquiry. On 14th April 1982, Keely J. delivered reasons for judgment in the election inquiry, in which he made findings on various issues of fact and law which had arisen in relation to the irregularities alleged. After making findings of fact as to the circumstances of the purported appointments of Mr Elliott and Mr Mauchline, which are detailed below, and determining the issues of law which had been raised, his Honour said, at p 29 of his reasons "It follows that neither Mr Elliott nor Mr Mauchline was validly appointed as a Federal organiser." His Honour adjourned the election inquiry, without making orders about the further conduct of the elections. One of the reasons for the adjournment was to await the outcome of this proceeding.
Although they had fought hard to resist findings of invalidity in the election inquiry, counsel for the Union invited me to accept those findings in this proceeding, without determining the matter for myself. They recognised that, had I determined the matter for myself, it is possible that I might have reached a different conclusion from that reached by Keely J. It would be most undesirable that I should reach a different conclusion; apart from other considerations, it would leave Mr Elliott and Mr Mauchline exposed to the findings in the election inquiry, without any possibility of validation.
All parties to this proceeding are parties to the election inquiry, and the issues as to the validity of the appointments of Mr Elliott and Mr Mauchline are identical in the two proceedings. It therefore appears to me that the doctrine of issue estoppel would operate to prevent any party to this proceeding attempting to litigate again the issue which was determined in the election inquiry. Although the election inquiry has not yet reached the stage at which orders disposing of it have been made, it is clear that the issue of the validity of the two appointments has been determined, and that it has been determined against the interests of the Union and Mr Elliott and Mr Mauchline, as they have been put forward in both proceedings. Even if they had desired to do so, the applicant, Mr Elliott and Mr Mauchline would not be permitted to reopen that issue in this proceeding. I am obliged to act on the finding that the purported appointments of Mr Elliott and Mr Mauchline were invalid.
Counsel for Mr Keily and Mr Biltris submitted that, even so, the invalidities were not such as to fall within that category of invalidity upon which the Court should act under s. 258. They contended that the section exists to enable the Court to deal with matters of form, and not of substance. According to their argument, the Court was being asked to make appointments which could not have been made in the first place other than by the federal council or federal committee of management, which had not made them. For the Court to make an order, it was argued, would involve the Court in making a policy decision that Mr Elliott and Mr Mauchline should be organisers of the Union.
This argument cannot be accepted. The word "invalidity" in s. 258 is not limited by its ordinary meaning, or its context, to defects of form, rather than substance. The distinction is not drawn. An invalidity, in its ordinary meaning, is simply a lack of validity. Further, s.254 of the Act contains a definition of "invalidity". The definition is an inclusive one. It includes "nullity". A nullity is something of no legal force or validity. It has been pointed out in a number of cases that s.171C of the Conciliation and Arbitration Act 1904, which was in terms similar to s.258 of the Act, should be construed broadly, as an enabling section. In Re Food Preservers' Union of Australia (1988) 79 ALR 138, at p 144, Northrop and Ryan JJ. said:
"Section 171C of the (Conciliation and Arbitration) Act is remedial in nature. The court should form a broad view of the power conferred by that section. It should not take a narrow or technical approach to the exercise of the power."
See also Re Australian Building Construction Employees' and Builders' Labourers' Federation (1978) 46 FLR 308, at pp 312-313 in the joint judgment of J.B. Sweeney and Evatt JJ. and Kayne v. Banks (1978) 22 ALR 255, at pp 264-265 in the judgment of the Full Court. It is worth noting that, in Kayne v. Banks, the Court applied s.171C to validate a series of rule amendments which had not been adopted by the federal conference of the organisation concerned, in accordance with the requirements of the rules of that organisation. Further, in Troja v. Australasian Meat Industry Employees' Union (1978) 46 FLR 340, a Full Court validated under s.171C several amendments to the rules of an organisation which had been drawn up by its federal secretary, pursuant to what was described as a "policy decision" of its federal council. The text of the rule amendments had not been approved by the federal council, which was the body charged with the power to amend rules. Similarly, in Re Food Preservers' Union of Australia, rule amendments were validated under s.171C although, in the view of the majority of the Full Court, no rule amending power existed in the organisation at all. It would be hard to categorise any of these matters as involving "form" and not "substance". In accordance with these authorities, I am of the view that the invalidities found by Keely J. to have happened with respect to the appointment of each of Mr Elliott and Mr Mauchline are invalidities for the purposes of s.258 of the Act. The Union is entitled to a declaration to this effect.
SHOULD A VALIDATING ORDER BE MADE?
In order to answer this question, it is necessary to examine the circumstances surrounding each of the appointments. A meeting of the federal committee of management of the Union began on 5th February 1990. On the following day, the committee dealt with one of its agenda items, apparently related to the staffing of the federal office of the Union. The minutes of the meeting record the adoption of three resolutions in the following terms:
"That having regard to the increased workload in the Federal Office, the Federal Secretary is authorized to appoint one additional person either Industrial Relations Officer or Organizer (preferably an Organizer) to be employed at the Federal Office Melbourne to assist in the work of the Federal Council. That the Secretary be authorized to give leave of absence without pay to Dennis Elliott for a period not exceeding one month for the purpose of getting practical experience of the industry as it currently operates. There shall not be any loss of accrued benefits or continuity of service.
That the Federal Secretary be authorized to appoint Dennis Elliott as Federal Organizer at an appropriate time as determined by the Federal Secretary."
Mr Elliott joined the Union in 1961, when he worked for his father carting eggs. He pursued a number of occupations involving the driving of vehicles until 1977, when he applied for and was appointed to the position of industrial officer of the Union in the Northern Territory. His task was to service the needs of the Union's members in the Northern Territory, there being no branch of the Union there. In 1983, Mr Elliott nominated for the office of federal assistant secretary, but his nomination was rejected on the ground that he did not fall within rule 22(a)(I)(ii) of the rules of the Union, i.e. he was not employed in the relevant industry and did not hold one of the listed offices.
In 1984, Mr Elliott applied for an advertised position as a federal industrial officer with the Union. His application was unsuccessful, but a second vacancy for a similar position arose in 1984 and Mr Elliott was appointed to it.
Because of his concern about his lack of eligibility to stand for an elected office if the occasion arose, Mr Elliott desired to become an organiser, that being one of the offices referred to in rule 22(a)(I)(ii). At some time, he approached Mr Hodgson, the federal secretary of the Union, to obtain a period of leave without pay in order to take up employment as a driver. He did this, on the assumption that rule 22(a)(II)(ii) required that he be employed in the relevant industry in order to be appointed as an organiser. That rule provides relevantly as follows:
"...a person shall not be eligible to hold or retain any office in the Union...unless at all times of holding the office, he or she is:
(i) a financial member of the Union, and
(ii) either is employed in the industry in connexion with which the Union is registered and in respect of such employment is entitled to membership of the Union pursuant to Rule 4, or is a person holding office as Federal Secretary, Federal Assistant Secretary, Branch Secretary, Branch Industrial Research Officer or Organiser (whether elected or appointed) or as organiser appointed by Federal Council or Federal Committee of Management."
In February 1990, Mr Hodgson told Mr Elliott that the federal committee of management had agreed that Mr Elliott could take up to one month's leave without pay in order to take up employment as a driver. Mr Hodgson showed Mr Elliott the resolutions of the federal committee of management.
After his initial conversation with the federal secretary, in December 1989, Mr Elliott had had a conversation with an acquaintance of his, Mr George Hughes. Mr Hughes operated a company named S. and G. Plastic Bumper Bar Repairers Pty. Ltd. ("the company"). In the conversation, Mr Hughes said that he was intending to go on holidays for a short time and that an extra person would be needed in the company's business to do the delivery driving. Further conversations occurred in February 1990, after the federal committee of management had resolved to give Mr Elliott leave. It was agreed that Mr Elliott would do the delivery driving for the company for one week and would be paid the award rate. Mr Elliott asked Mr Hughes to provide him with a certificate that he was employed with the company, and Mr Hughes agreed.
On Monday 5th March 1990, Mr Elliott attended at the company's premises in Reservoir. As its name suggests, the company was involved in repairing plastic bumper bars. For this purpose, it used a Mazda one tonne van for collecting bumper bars for repair, and delivering the repaired articles. Mr Elliott drove this van and did the collections and deliveries around the Melbourne area. He took instructions from a Mr Steve Kos. He started work at 8.00 a.m. and finished at 4.30 p.m., taking a half hour lunch break. Mr Elliott performed this work for a full working week, i.e. five days.
On the day that he began, Mr Elliott collected from the company's premises an envelope, which contained a letter bearing the name and address of the company and the date 6th March 1990. It was addressed "To whom it may concern". The text read:
"I certify that Dennis Elliott, of 4 Rutland Avenue, Templestowe, is employed by S. and G. Plastic Bumper Repairers Pty. Ltd., as a delivery driver."
The letter bore a signature, apparently that of Mr Hughes, as general manager. Mr Elliott gave this certificate to Mr Hodgson on 6th March, the second day on which he was doing collections and deliveries for the company. By letter dated 6th March 1990, Mr Hodgson purported to appoint Mr Elliott to the position of organiser, effective from midnight on Sunday 11th March 1990. He was told that his salary and conditions of employment would be the same as existed for him on 2nd March 1990, no notice was required of him in respect of his transfer from industrial relations officer to organiser, his past service with the Union would be recognised for all purposes, such as long service leave, his employer would be the federal council of the Union, he would be subject to the direction of the federal secretary and his employment could be terminated by twenty-eight days' notice on either side.
In the week following his performance of collection and delivery duties for the company, Mr Elliott collected $290.00 in cash from Mr Hughes. The award rate for a week's work was approximately $330.00. Mr Elliott subsequently attempted unsuccessfully to obtain a group certificate from Mr Hughes.
In 1989, Mr Mauchline was elected as an organiser in the Victorian branch of the Union. Under the rules, his term of office was due to expire on 20th April 1992. The elections in the Victorian branch, which commenced in 1991, have been delayed as a result of proceedings in this Court, including the election inquiry. In any event, in February, March and April 1990, Mr Mauchline did hold office as a branch organiser, and so fell within rule 22(a)(II)(ii).
In consequence of the first of the resolutions passed by the federal committee of management on 6th February 1990, the following advertisement appeared in the March 1990 edition of "Transport Worker", a journal published by the federal office of the Union:
"VACANCY
FEDERAL ORGANISER
INDUSTRIAL RELATIONS OFFICER
A meeting of the Union's Federal Committee of Management held on February 6, 1990 determined as follows:- "That having regard to the increased workload in the Federal Office, Federal Secretary is authorised to appoint one additional person either Industrial Relations Officer or Organiser (preferably an Organiser) to be employed at the Federal Office, Melbourne to assist in the work of the Federal Council."
All applications for the position should be in writing addressed to the Federal Secretary, stating name, age, experience etc. BOX 211
CARLTON SOUTH, 3053".
By letter dated 10th April 1990, to Mr Hodgson, Mr Mauchline applied for the position of federal organiser as advertised. His letter set out his age, his current position and his experience. By letter dated 18th April 1990, Mr Hodgson responded to the application. His letter contained the following paragraph:
"Providing that you have been a financial member of the Union continuously for the previous three years (1989-1988-1987) and were financial at the date of your application and have not reached the age of sixty-five, I hereby as determined by the Federal Committee of Management at its meeting 6 February 1990 appoint you as Federal Organiser."
The remainder of the letter dealt with the conditions on which Mr Mauchline would be employed.
Because he held the elected office of branch organiser in the Victorian branch of the Union, no issue was raised as to Mr Mauchline's eligibility to be appointed as an organiser. It seems to have been assumed, both in February and March 1990, and in argument in the course of this proceeding, that the provisions of rule 22(a)(II)(ii) required that, as he did not hold one of the positions referred to, Mr Elliott needed to be employed in the relevant industry at the time of his appointment as an organiser. I am by no means certain that this conclusion is correct, but the question was not argued. On the assumption that Mr Elliott was required to be employed in the industry, counsel for Mr Keily and Mr Biltris endeavoured to argue that he was not so employed. The argument was based on the proposition that what Mr Elliott did for the company was so insubstantial as not to amount to employment for the purposes of the rule. Counsel drew attention to the fact that Mr Elliott conveyed the certificate as to his employment to Mr Hodgson on the second day on which he was collecting and delivering bumper bars, and that Mr Hodgson made the purported appointment on that day. The certificate had been drawn up no later than the previous day, and post-dated by Mr Hughes.
Reliance was placed on the judgment of French J. in Re Election for Office in the Transport Workers' Union of Australia, Western Australian Branch (12th February 1992, unreported). In that case, his Honour held that a candidate for election in the Western Australian branch of the Union had not fulfilled the requirement of employment in the relevant industry, laid down by rule 22(a)(I)(ii). The candidate concerned had attended the premises of a transport operator for a period not much in excess of four hours on one day, had helped to clean a car, helped to load a truck and done some cleaning in the yard. At p 23, his Honour said:
"Carter agreed with Allgrove to let Handmer do some work around his yard so that he would qualify for election. That agreement was clearly not contractual. And in relation to his dealings with Handmer, their lack of certainty, the lack of any evidence of mutual obligation, the absence of any need for his services or benefit to be derived from them, taken together with the transient nature of the activities and the underlying purposes of the parties, militate against the conclusion that they intended to form legally binding relationships. There was no evidence that Handmer submitted himself in any legally binding way to the direction of Carter. The payment he received was in substance a gratuity that bore no relationship to the time that he had worked. There was no mutuality of obligation. It is fair to say that the arrangement had some of the hallmarks of a sham. In my opinion, there was no contract."
The finding that there was no contract of employment in that case is sufficient to distinguish it from cases in which eligibility for membership or candidacy has been acquired by entry into short term or casual employment arrangements, albeit with the sole intention of gaining that eligibility. Such cases include Ransley v. Australian Public Service Association (Fourth Division Officers) (1985) 12 IR 55, at pp 69-71, Re Federated Clerks Union of Australia; Ex Parte Tanner (1986) 70 ALR 79, at pp 91-93 and Re Application by McGee for an Inquiry into Elections in the Transport Workers' Union of Australia, Victorian Branch (Federal Court of Australia, Keely J., 16th March 1992, unreported) at pp 18-23. In Ransley, a contract of employment as a temporary typist for a week was held to be sufficient to justify eligibility for membership of a union of public service employees, and consequent eligibility to be a candidate in an election. In Tanner, casual duties filing documents for a firm of solicitors were held to justify eligibility for membership of a union of clerical workers, when the object was to validate previous purported membership and to make the person concerned eligible to be a candidate in an election. In McGee, the casual employment of Mr Keily was held to be sufficient to enable him to be a candidate in the current elections in the Victorian branch of the Union. That work involved casual duties, servicing a vehicle, with occasional driving and loading and unloading of the vehicle, with remuneration being paid either in cash or in the form of beer.
In the present case, Mr Elliott clearly entered into a contract of employment with the company. The contract required him to work for a week, performing driving duties. He did so work and was paid accordingly, the amount of the payment being consistent with the retention by the company of group tax. It is not to the point that the certificate that he so worked, upon which Mr Hodgson was satisfied of the fact, was completed before he began to work, nor that it was presented on only the second day of the week. There is nothing to indicate that the contract was a sham; it is quite legitimate for someone to enter into a contract of employment, in order to acquire the necessary status under rule 22(a)(II)(ii). Accordingly, if Mr Elliott were required to satisfy the provisions of that rule on 6th March 1990, he did so.
The defect in each of the appointments of Mr Elliott and Mr Mauchline, therefore, was that it was made by Mr Hodgson, and not by the federal committee of management or the federal council. This conclusion is in accordance with the reasoning of Keely J. in the election inquiry. His Honour held that the power of the federal committee of management to appoint an organiser under rule 24(d) was not capable of delegation to the federal secretary and that the resolutions of 6th February 1990 involved such delegation. It must be said that these conclusions involved questions of law, the answers to which are not easy. It was no doubt arguable in Mr Elliott's case that the federal committee of management had resolved that he be appointed an organiser, and had simply left the date of commencement of his appointment to Mr Hodgson. Keely J. rejected this view but it must be conceded that the appropriateness of his Honour's conclusion was not clear beyond argument.
It was accepted that, in acting as they did, the federal committee of management, Mr Hodgson, Mr Elliott and Mr Mauchline all acted in good faith. Nor was there any secrecy about the appointments. There was evidence that Mr Hodgson reported to the federal committee of management on the duties carried out by each of Mr Elliott and Mr Mauchline as an organiser. No-one on the federal committee of management, nor indeed anyone else, raised any question as to the validity of the appointments until the election inquiry. Each of Mr Elliott and Mr Mauchline has performed the duties of an organiser, and has been paid accordingly from the funds of the Union. Further, it can be said that each acted in accepting the appointment in the belief that Mr Hodgson had authority to do what he did. Mr Elliott took leave without pay from his duties with the Union, and undertook his employment with the company. Mr Mauchline resigned an elected office in the Victorian branch, which, if he had continued to hold it, would have given him clear eligibility under rule 22(a)(I)(ii) to nominate for another office.
Counsel for Mr Keily and Mr Biltris argued that both Mr Elliott and Mr Mauchline, as members of the Union, were fixed with notice of the provisions of the rules. If they did not know that the federal secretary could not appoint them, they ought to have known that. This is undoubtedly so as a matter of strict law, but it must be emphasised that the questions of construction of the rules involved and the characterisation of the actions of the federal committee of management were not easy. In a sense, Mr Elliott and Mr Mauchline were also entitled to assume that the appointments were made on proper authority, and that the correct procedures had been followed. Counsel for Mr Keily and Mr Biltris also relied on the same arguments which they put on the issue whether there was such an invalidity as the Court was capable of validating, for the purpose of endeavouring to persuade me that a validating order ought not to be made as a matter of discretion. For the reasons which I have already given, I reject those arguments.
Weight must also be given to the current attitude of the federal committee of management. On 25th March 1992, that committee passed the following resolution:
"This Federal Committee of Management of the Transport Workers' Union of Australia:
1. Notes that the validity of the appointments of Mr Dennis Elliott and Mr Don Mauchline as organisers of the TWU has been the subject of challenge in proceedings V I4 of 1992 initiated by Christopher Keily in the Federal Court of Australia on the basis that the Federal Committee of Management did not itself appoint either of them pursuant to Rule 24(d) but purported to delegate the power of appointment to the Federal Secretary in the resolutions adopted on 6 February, 1990 and additionally, in the case of Dennis Elliott, that he was not eligible to nominate in accordance with Rule 22 as he was allegedly not employed in the transport industry at the relevant time nor was he the holder of one of the prescribed offices.
2. Notes that the Federal Secretary in these proceedings has testified that he satisfied himself that Dennis Elliott was employed in the transport industry at the relevant time.
3. Notes that the TWU on legal advice of senior counsel has contended in the proceedings that both of the appointments were valid.
4. Notes that both organisers have performed the duties of organiser, in the case of Mr Elliott since 12 March, 1990 and in the case of Mr Mauchline since April 1990, to the knowledge and with the approval of the Federal Committee of Management and the Federal Council. To the extent that this is necessary as a matter of law ratifies, endorses and authorises the appointments as organiser of Messrs. Elliott and Mauchline with retrospective effect and all administrative arrangements associated with these appointments.
5. Considers that it is appropriate that the Union now lodge applications to validate the appointments and authorises the Federal Secretary to take all necessary action accordingly."
In the election inquiry, Keely J. held that this resolution was ineffective to validate retrospectively the appointments of Mr Elliott and Mr Mauchline. Again, it is not open to anyone in the present proceeding to challenge that conclusion.
In the circumstances, I am persuaded that the making of an order validating the appointments of Mr Elliott and Mr Mauchline as organisers would be appropriate. Giving proper weight to the beneficial nature of s.258 of the Act, in the exercise of the Court's discretion, those appointments should be validated, so as to prevent the continued occurrence of invalidities in the management and administration of the Union, arising from the defective appointments. It must also be recognised that an order validating those appointments for all purposes would have the effect of validating the candidacy of Mr Elliott and Mr Mauchline in the current elections the subject of the election inquiry. Such an order can only be made, however, if the Court can be satisfied that it would not do substantial injustice to the Union, or to any persons of the classes referred to in s.258(5). That question must now be dealt with.
WOULD AN ORDER DO SUBSTANTIAL INJUSTICE?Counsel for Mr Keily and Mr Biltris endeavoured to argue that the making of an order under s.258(3) in the present case would cause substantial injustice to a number of members of the Union, particularly in the case of the appointment of Mr Mauchline. There was evidence that advertising the position to which Mr Mauchline was appointed only in the journal published by the federal office of the Union would not be likely to bring it to the notice of very many members. Reference was made to journals published by various branches of the Union, with the contention that they had wider circulation than the journal published by the federal office. Further, it was said, there was no evidence as to whether there were other applicants for the position to which Mr Mauchline was appointed, or as to whether Mr Mauchline or any other applicant was interviewed. No provision is to be found in the rules of the Union requiring the position to be advertised at all. Nor is there to be found any provision requiring that any applicant be given an interview. Even if the identity of any other applicant, or potential applicant, were known, it would be impossible for the Court to say that any such applicant or potential applicant should be regarded as a better candidate than Mr Mauchline. It cannot therefore be said that any member of the Union suffered substantial injustice by not being given notice of the advertisement of the position, or by applying and not being interviewed, or by being interviewed and not selected.
The question of substantial injustice in the present case falls to be determined by reference to the elections the subject of the election inquiry. If the appointment of Mr Elliott is not to be validated, there is only one valid nomination for the office of federal assistant secretary, namely Mr Biltris. If the appointment of Mr Mauchline is not to be validated, there is only one valid nomination for the office of Victorian branch secretary/treasurer, namely Mr Keily. Under rule 23 I (e)(i) of the rules of the Union, Mr Biltris would be entitled to be declared elected to the office of federal assistant secretary. Under rule 33(f), Mr Keily would have the right to be declared elected as Victorian branch secretary/treasurer.
There was some argument as to whether the only valid nominee in an election for an office is entitled to be declared elected. If that argument were not determined by the provisions of the rules to which I have referred, it would be determined by the common law. That was certainly the view taken by French J. in Re Election in the Transport Workers' Union of Australia, Western Australian Branch, at pp 23-24. It was also the view taken by the Divisional Court in R. v. Soothill; Ex Parte Ashdown (The Times, 2nd April 1955). It would be extraordinary if a returning officer conducting an election could decline to declare the only valid candidate elected, but instead reopen nominations after the time at which they had closed. The position is no different if there are two candidates and the returning officer finds the nomination of one to be invalid. Nor is it any different if the finding of invalidity is made by the Court conducting an election inquiry. It may be true that, in some circumstances, the Court would have power under s.223 of the Act to order that nominations be reopened. The possibility of such an order does not mean that the only validly nominated candidate has no right to be elected; it simply means that such a right can be overridden by the Court in the exercise of its powers.
Counsel for Mr Mauchline relied on a line of cases establishing that, where a ballot has taken place, and it is afterwards discovered that the candidate with the highest tally of votes is ineligible to be a candidate, the proper order is that a new election be held, including calling for nominations again. See Hilton v. Brebner (1968) 13 FLR 89, at p 92, Re Federated Clerks Union of Australia; Ex parte Tanner (1986) 70 ALR 79, at p 97 and Re Carter; Re Federated Clerks Union of Australia, Victorian Branch (No.2) (1989) 31 IR 470, at p 470. It is clear that there is a difference between cases in which a ballot has been held, and the only eligible candidate has been rejected by the electorate, and those in which no ballot has been held, and there is only one eligible candidate. In the latter class of case, the electorate has no opportunity to express its will, because no ballot is possible. It will never be known whether the voters would have rejected that candidate; he or she will simply be declared elected unopposed. The Hilton v. Brebner line of authority cannot be relied on to compel the reopening of nominations where, at the close of nominations, and without a ballot, there is found to be only one eligible candidate.
The effect of an order validating the appointments of Mr Elliott and Mr Mauchline for all purposes would be to vitiate the rights of Mr Keily and Mr Biltris to be declared elected to the offices for which they have been validly nominated. The deprivation of legal rights is very much at the heart of the concept of injustice. Where the right is one which would lead to the holding of an office, to which remuneration is attached, and which involves substantial responsibilities, as do both of the offices in question, the injustice which would be involved in the deprivation of that right would necessarily be described as "substantial". This is so, whether that word is intended to mean more than merely trivial, or considerable. If, in determining whether an order under s.258(3) would do substantial injustice to any member of the Union, it were necessary only to look at the effect of the order on Mr Keily and Mr Biltris, then I should decide without hesitation that such an order would do substantial injustice. I should then modify the order, so that the appointments of Mr Elliott and Mr Mauchline were validated for all purposes other than their candidacy in the current elections, in order to avoid that substantial injustice. An order in those terms would be "such order as it (the Court) considers appropriate", within the meaning of s.258(3).
Counsel for the Union, Mr Elliott and Mr Mauchline all argued that, in determining whether substantial injustice would be done, it is necessary to balance any detriment suffered by any person in one of the classes referred to in s.258(5) against the benefits to be achieved by the proposed order. If the benefits to the Union and its members would outweigh the detriments to the individual members, creditors etc., then no substantial injustice would be done and a validating order should be made. It was argued that the only real detriment to be suffered by Mr Keily and Mr Biltris was that each would have to go to a ballot, in one case of the members of the Victorian branch and in the other case of the members of the Union, to determine whether he should be elected to the position for which he has nominated. A ballot would be beneficial to the members of the branch and the Union respectively, in that those members would have the opportunity to decide whether they wanted Mr Biltris or Mr Elliott to be federal assistant secretary and whether they wanted Mr Keily or Mr Mauchline to be Victorian branch secretary/treasurer. It was said that there are within the Union two factions, and that the representation of each of them in a ballot for each of the two offices would be both just to the members and in accord with the object found in s.3(g) of the Act, namely "to encourage the democratic control of organisations, and the participation by their members in the affairs of organisations". These arguments are undoubtedly weighty. If it is necessary to balance the interests of the Union and its members against the individual interests of Mr Keily and Mr Biltris, for the purposes of determining whether substantial injustice would be done, then I am of the view that the making of an order under s.258(3), validating the appointments of Mr Elliott and Mr Mauchline for all purposes, including the current elections, would not do substantial injustice to any member of the Union.
A comparison of s.258(5) with s.257(1) of the Act is instructive. Section 257 enables the Court to declare that the application of provisions for the automatic validation of certain acts, found in ss. 255 and 256, would do substantial injustice, and to make orders that those automatic validation provisions do not apply. Section 257(1) requires the Court to be satisfied that the application of s.255 or 256 in relation to an act would do substantial injustice, having regard to the interests of the organisation, members or creditors of the organisation or persons having dealings with the organisation. It should be noted that these are the same classes of persons as are referred to in s.258(5). The difference is that, under s.257, the Court is required to determine whether automatic validation would do substantial injustice, having regard to the interests of the organisation and the other classes of persons; the interests of all are relevant and the question of substantial injustice is to be decided upon the consideration of the totality of those interests. A balancing process is necessarily involved. By contrast, s.258(5) requires the Court to satisfy itself that a validating order would not do substantial injustice to the organisation or to any one of the classes of persons referred to. If substantial injustice would be done to a single person from any of those classes, an order cannot be made. This suggests strongly that it is the interests of the individuals which need to be considered for the purposes of s.258(5).
Section 258 of the Act is in a form similar, but not identical, to s.171C of the now repealed Conciliation and Arbitration Act 1904. Section 171C was included in Part IXA of that Act, which came into being as a result of the recommendations of the Committee of Inquiry into Co-ordinated Industrial Organisations, which was constituted by the late J.B. Sweeney J. In turn, the provisions were adapted from the then Uniform Companies Acts of the various States. The scheme of the legislation was and is very similar to that relating to companies. In particular, s.171C corresponded with s.366(3) of the Uniform Companies Acts. By that provision, a court was enabled to make orders in terms similar to those permitted by s.258(3) of the Act, and was required, before making any such order, to satisfy itself that such an order would not do injustice to the company or to any member or creditor thereof. In Re Australian Continental Resources Limited (1975) 10 ACTR 19, Blackburn J. made a validating order under s.366(3). In the course of his reasons for that order, his Honour said at p 33:
"Some argument occurred on the connotation of the word "injustice" in this paragraph. In my opinion it necessarily implies a consideration of the relative gains or losses of the parties involved. Counsel for the respondents sought to persuade me that in effect the word "injustice" meant "loss". The word "prejudice" was the one he actually used in argument, and I use it here in the sense of "loss" or "harm". The gist of his argument was that if the order proposed would cause prejudice to the company, member, or creditor in question, that in itself was enough to preclude the making of the order, without regard to the effect of the order upon the rights of any other party. I think this construction is incorrect, and that it would make the section far less useful. In my opinion the task of the court, in complying with par (e), will not be complete merely upon its satisfying itself that the order proposed would not cause prejudice (in the sense indicated) to any person of the classes mentioned. Such an order may well do so. Prejudice is not the criterion; justice is; and justice may require that the prejudice to one party if the order were made be balanced against the respective prejudice to other parties if the order were not made."
In making a similar order under the equivalent provision of the New South Wales Uniform Companies Act, Bowen C.J. in Eq. (as he then was) said in Re Compaction Systems Pty. Ltd. (1976) 2 NSWLR 477, at p 493:
"In my view, the word "injustice" in this provision requires the Court to consider any real, and not merely insubstantial or theoretical, prejudice which will be suffered by, for example, a member by the making of an order, and to weigh this in the scales against the prejudice to the company, other members and creditors, if an order be not made. In other words, it is insufficient to show that there may be some prejudice to a member if, on a consideration of the whole matter, the overwhelming weight of justice, as it were, is in favour of making the order."
In written submissions lodged after the completion of argument in the present case, counsel for Mr Keily and Mr Biltris drew attention to several cases in which courts appear to have looked only at detriment to individual members or creditors of companies, in determining whether injustice would be done by validation orders. The question whether it was necessary to balance that detriment against benefits to others was not discussed in those cases.
It is fair to say that this Court and its predecessor, the Australian Industrial Court, in applying s.258 and s.171C have not expressly followed the reasoning of Re Australian Continental Resources Limited and Re Compaction Systems Pty. Ltd. Nonetheless, it does appear that a balancing process has been undertaken between the detriment to members of the organisation concerned and the benefit to others. In Allen v. Laragy (1975) 7 ALR 261, at pp 267-269, the Australian Industrial Court (consisting of Spicer C.J., Smithers and Woodward JJ.) dealt with an invalidity in the appointment of a trainee organiser. The Court validated the appointment, which had the effect of making the appointee eligible to be a candidate in elections due to be held soon afterwards. In determining that such an order would do no substantial injustice to any member of the organisation concerned, the Court plainly balanced the interests of the individual appointee against those of the members generally, including those who might stand for election and have to compete with the appointee whose appointment had been validated. In Troja v. Australasian Meat Industry Employees' Union (1978) 46 FLR 340, a Full Court of this Court validated the treatment as members of an organisation of persons who had not validly become members; the validation was for all purposes, including voting in elections which were the subject of the proceeding, although voting was confined under the rules of the organisation to financial members. In making that order, the Court was called upon to determine whether substantial injustice would be done to the applicant in that proceeding, who was an unsuccessful candidate in the election. It was recognised that that person had established that there were electoral irregularities which made it a matter of speculation as to whether he would have been elected to the offices for which he had stood if the elections had been conducted in accordance with the rules of the organisation. See the judgment of Deane J. at p 361. Each of the members of the Court plainly balanced the interests of that person against those of the organisation and its members in determining whether substantial injustice would be done by a validating order. See the judgments of J.B. Sweeney J. at pp 341-342, Keely J. at p 356 and Deane J. at pp 360-361, where his Honour described the case as "plainly a borderline one".
In the light of these authorities, I do not think that it is open to me to hold that the only matters which should be taken into account in determining whether substantial injustice would be done to Mr Keily and Mr Biltris are those matters which concern the interests of those two persons. The authorities dictate that I should balance the interests of those two persons against the interests of the Union and its other members. As I have said, once that exercise is undertaken, I am of the view that a validating order would not do substantial injustice to Mr Keily or Mr Biltris. In the circumstances of the case, I am also satisfied that such an order would not do substantial injustice to the Union itself, to any other member of the Union, to any creditor of the Union or to any person having dealings with the Union.
CONCLUSION.It follows from what I have said that I should make a declaration of the kind contemplated by s.258(2), namely that invalidities have occurred in the management or administration of the Union and in two appointments in the Union, being the making of the purported appointment on 6th March 1990 of Mr Elliott as an organiser and the purported appointment on 18th April 1990 of Mr Mauchline as an organiser, each such appointment having been made by Mr Hodgson, the federal secretary of the Union, without any authority under the rules to make that appointment. I should also make an order of the kind contemplated by s.258(3) of the Act, namely an order that each such appointment be validated from the date on which it was purportedly made, and for all purposes, including the purposes of the candidacy of Mr Elliott for the office of federal assistant secretary and Mr Mauchline for the office of Victorian branch secretary/treasurer in the current elections.
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