In the Matter of an application pursuant to section 159 of the Conciliation and Arbitration Act 1904 as amended and in the matter of the Royal Australian Nursing Federation (S.A. Branch)

[1983] FCA 346

Re: IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 159 OF THE
CONCILIATION AND ARBITRATION ACT 1904 AS AMENDED
And: IN THE MATTER OF THE ROYAL AUSTRALIAN NURSING FEDERATION (SOUTH
AUSTRALIAN BRANCH)
No. 3 of 1983
Industrial law
6 IR 195

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Fisher J.

CATCHWORDS

INDUSTRIAL LAW - Election inquiry - Eligibility of candidate to nominate - Meaning of Fully Financial Member - Unfinancial member and arrears of subscription - Consequential orders.

CONCILIATION AND ARBITRATION ACT 1904 s.159(1)

HEARING

ADELAIDE

#DATE 22:11:1983

ORDER

1. The Court declares the election conducted for the office of Branch Secretary of the Royal Australian Nursing Federation (South Australian Branch) and completed on 30 October 1982, to be void.

2. The Court declares that the person declared elected to the office of Branch Secretary of the Royal Australian Nursing Federation (South Australian Branch) was not validly elected to that office.

3. The Court directs that the Industrial Registrar make arrangements for a new election to be held pursuant to s.165A of the Act and the Rules of the said Branch for the office of Secretary of the Branch to fill the casual vacancy occurring in that office consequent upon the retirement of the Branch Secretary elected in 1980 who retired in October 1982 and for the balance of her unexpired term of office. The said new election shall be conducted between 8 December 1983 and 7 February 1984 provided that the Returning Officer may call for nominations prior to 8 December 1983, and such election shall be conducted in accordance with the certified rules of the Branch as if the election was being conducted prior to 1 January 1984.

4. The Court orders that Bartholomew Brendon O'Brien hold office as Branch Secretary until the election of a person to the office of Branch Secretary pursuant to the election hereby ordered and, to the extent necessary, hereby modifies the operation of rule 7(c) of the Branch Rules.

5. The Court orders that a copy of this order be served forthwith on the Industrial Registrar.

6. Liberty is given to all parties to have the matter restored on 7 days' notice to the other parties and to the Court.

JUDGE1

On 3 May 1983 Diane Paterson, a member of the Royal Australian Nursing Federation (South Australian Branch) ("the Branch") lodged pursuant to s.159(1) of the Conciliation and Arbitration Act 1904 ("the Act") an application for an enquiry by the Court. She claimed in the application that there had been a number of irregularities in or in connexion with an election for the office of Branch Secretary in the Branch. This application was, in accordance with s.159(4) of the Act, referred to the Court, the election having been conducted under s.170 of the Act by or on behalf of the Industrial Registrar. The Branch is a branch of the Royal Australian Nursing Federation ("the Union") which is an organization of employees registered under the Act.

The election was conducted, contemporaneously with elections for a number of other offices in the Branch, by Graham John Carey, an Executive Officer of the Industrial Election Section, Australian Electoral Office, Adelaide. Nominations opened on 9 August 1982 and closed at 5.00 p.m. on 30 August 1982. Two nominations were received for the office of Branch Secretary, namely from Diane Paterson and Marilyn Kay Beaumont.

The ballot in respect of all positions including that of Branch Secretary, opened on 6 October 1982 and closed on 28 October 1982. In all 6169 ballot papers were issued. The result of the poll for Branch 'Secretary was declared on 8 November 1982 together with the results of other elections. The figures in the Returning Officer's Statement of Results of that date in respect of the office of Branch Secretary were as follows:

"Branch Secretary

Beaumont, Marilyn Kay 1085 Paterson, Diane 910

Formal Ballot-papers 1995 Informal Ballot-papers 23 Total 2018

Elected Beaumont, Marilyn Kay."

The irregularities of which Diane Paterson complained in her application for an enquiry were particularised as follows:

"1. Rule 18(b)i of the Rules of the South Australian Branch of the Organization concerning qualification for office and nomination was breached in relation to the successful candidate in the election whereby the nomination for office of the candidate was wrongly accepted and the candidate was wrongly elected.

2. The full and free recording of votes by all persons entitled to record votes was prevented and hindered by the use of certain resources of the Organization by certain officers and members of the South Australian Branch in support of the successful candidate in the election.

3. Rules 2, 6(b) and 19(e) of the Rules of the South Australian Branch of the Organization were breached in relation to the members to whom ballot papers in the election were issued."

Diane Paterson also supplied in her application the facts upon which she relied to support her allegations of irregularities. I will at this stage only set out these facts which related to the first of the three abovementioned irregularities. She stated:

"In respect of the irregularity alleged herein and numbered 1. the Applicant says:

(1) Rule 18(b)(i) provides:

'In any elections conducted for the office of Branch Secretary prior to 1st January, 1984 a candidate shall have been a fully financial member of the Association for a period of one year immediately preceding the date of nomination for office...'

(2) The election was conducted by the Australian Electoral Office pursuant to Section 170 of the Conciliation and Arbitration Act 1904 (as amended).

(3) The closing date for nominations for the office of secretary in the election was Monday 30th August 1982.

(4) As at the said closing date for nominations two nominations for the office of secretary were received. The persons nominated were myself and one Marilyn Kay Beaumont (hereinafter called Beaumont). The two nominations were accepted by the Australian Electoral Office.

(5) A ballot was conducted for the office of secretary, and subsequently on 8th November 1982 Beaumont was declared to have been elected thereto.

(6) Beaumont was not eligible to have stood for nor been elected to the office of secretary as she had not been a fully financial member of the South Australian Branch of a period of one year immediately preceding the date of nomination for office."

On the question whether persons who had nominated for offices were eligible under the Rules of the Branch to nominate, Mr. Carey had this to say in an affidavit sworn by him in the enquiry:

"6. On 1 September 1982 I called at the Kent Town Office of the Branch to establish whether each of the forty two nominations received for the various positions had been made in accordance with the Rules of the Federation, i.e. Branch Rules 18(a)(i), 18(b)(i) and 18(d). It was my purpose to check whether each of the persons nominated (nominees) had been a member of the Federation for the period 30 August 1981 to 30 August 1982, whether he/she was, as at 30 August 1982, financial in respect of the period 30 August 1981 to 30 August 1982, and whether the nominators were financial, as at 30 August 1982."

Mr. Carey came to the conclusion, based on certain membership cards maintained in the office of the branch, that both Diane Paterson and Marilyn Beaumont were eligible to nominate. In coming to this conclusion he did not consider whether at any time during the period of one year preceding 30 August 1982 either of the candidates had been unfinancial. He looked only to ascertain whether at that date each of them had paid subscriptions payable in respect to the preceding 12 months and had been a member throughout that period.

Counsel for Diane Paterson contended that Marilyn Beaumont was not entitled to nominate for the office of Branch Secretary because she failed to qualify under the provisions of s.18(b)(i) set out above. It was submitted that the correct construction, of that provision required that a candidate should be a financial member continuously throughout the preceding period of 12 months and at no time during that period an unfinancial member.

The essential questions for determination on this aspect of the enquiry are whether that is the correct manner in which to interpret s.18(b)(i) and in particular the words "fully financial member" and the ascertainment of the circumstances in which a member ceases to be a financial or fully financial member. The questions which must be decided are not easy to resolve and the relevant rules are difficult to understand and to implement.

The rules governing, these matters, in the case of the Branch, are the Federal Rules of the Union (sometimes called the Association Rules) and the standard Branch Rules which have been modified in respect of certain particular aspects. The modifications expressly supercede the standard Branch Rules. For the purpose of financial membership the following Federal Rules have to be considered:

"9. - Subscriptions

(a) Each member shall pay an annual subscription to the Branch to which he or she is attached, or its authorized collector.

(b) That the amount of the annual subscription shall be determined from time to time by the Branch Council but shall not be more than 1% of the highest third year registered nurse annual salary payable in Australia as at December 31 of the preceding year or less than the amount paid per member as capitation fee to the Federal Council.

(c) In determining the amount of the annual subscription payable by each member the Branch Council shall have regard to the categories of membership and may assess the subscription for each class of membership accordingly.

(d) Notwithstanding anything contained in these rules the Branch Council may remit the subscription in whole or in part, for such time as it decides, of any member unable to pay because of illness.

(e) Subscriptions shall be paid annually or by instalments in respect of such lesser periods as the Branch Council determines. A member paying his or her subscription annually shall be unfinancial if the subscriptions has not been paid within three calendar months of the due date and a member paying his or her subscription by instalments in respect of some lesser period than the full year shall be deemed unfinancial if an instalment is not paid within one month of the due date for its payment as determined by the Branch Council.

(f) A member who is not 'financial' shall not be entitled to any benefit of the Association except at the direction of the Branch Council and shall be liable to have his or her name removed from the Register if unfinancial for more than six months.

(g) Notwithstanding anything hereinbefore contained, the Association may arrange for the collection of subscriptions on behalf of or through any other organization or kindred body.

(h) Notwithstanding anything contained in these rules a member may authorize his or her employer in writing to deduct his or her subscription from his or her salary and pay such subscription to the Branch Council, and such member shall be financial so long as such authority remains in force.

10. - Transfer of Membership

A member changing his or her place of employment may transfer his or her membership to a more convenient Branch providing he or she requests such a transfer.

11. - Termination of Membership

(a) Membership may be terminated:-

(i) by death;

(ii) in the case of explusion for breach of the Rules;

(iii) in the case of student nurses, by termination of training before completion of same.

(b) A member may resign, if he or she wishes to resign, by notice in writing, if:-

(i) the member ceases to be employed in, or in connection with, the industry of nursing; or

(ii) the notice is given not less than three months before the resignation is to take effect and is subject to the payment of fees as previously specified;

(iii) such notice is delivered to and/or received by the Association as specified in the Rules of the Branch of which the person is a member; and

(iv) provided that notwithstanding the provision of sub-clause (ii) a notice of resignation in writing shall be deemed to be valid if the member is informed in writing by or on behalf of the organization that the resignation has been accepted."

The eligibility of a person to nominate as Secretary of the Union is provided by rule 40(c) of the Federal Rules, namely

"(c) A candidate for the position of Secretary shall have been a fully financial member of the Association for a period of two years immediately preceding the date of nomination for office . . . "

The Standard Branch Rules on those matters are as follows:

"5. (a) Each member shall pay such annual subscription as shall be determined from time to time by the Branch Council but which shall not be more than $120 or less than the amount paid per member as capitation fees to the Federal Council.

(b) Subscriptions shall be paid in accordance with the provisions of Rule 9 of the Association's Rules.

6. Unfinancial Members

(a) A member who is unfinancial in accordance with Rule 9 of the Association's Rules may be fined by resolution of the Branch Council. It shall be lawful at any meeting of the Branch Council to instruct the Secretary by resolution carried by a majority of the Council present, to sue for recovery of arrears of subscriptions, fines and levies.

(b) No unfinancial member shall be entitled to attend any meeting of the Branch or to nominate any person or to be nominated for any office in the Association or the Branch nor shall any unfinancial member be eligible to vote in any ballot conducted by the Branch. Unfinancial members shall also be ineligible to receive any of the benefits or services of the Branch, unless the Branch Council otherwise directs.

18. Qualification for Office and Nomination

(a) (i) A candidate for the Branch Council or for a position of Officer of the Branch (other than the Branch Secretary) shall have been a fully financial member of the Association for a period of one year immediately preceding the date of nomination for office.

(ii) . . .

(b) (i) In any elections conducted for the office of Branch Secretary prior to 1st January 1984 a candidate shall have been a fully financial member of the Association for a period of one year immediately preceding the date of nomination for office. In all elections conducted for the office of Branch Secretary after 1st January 1984 a candidate shall have been a fully financial member of the Association for a period of two years immediately preceding the date of nomination for office."

In the case of Marilyn Beaumont it is necessary to decide whether she has been "a fully financial member of the Association for a period of one year immediately preceding the date of nomination for office." i.e. 27 August 1982 in her case. The fact that she may have been on some occasions in arrears with her subscription is immaterial unless she became in consequence of such arrears unfinancial i.e. ceased to be a financial member. If it is difficult to comprehend, as it is, what qualification is required by the Branch Rules, it is well-nigh impossible to assess with certainty by reference to the records of the Branch whether she, or Diane Paterson for that matter, was in arrears or unfinancial at any particular time.

Counsel for the Branch contended in the first instance for the construction placed on the provision by Mr. Carey, namely as requiring 12 months membership with the subscription for that period fully paid up at the date of nomination. This interpretation accords with the view of Smithers J. and Evatt J. in Lovell's case infra when construing what I assess as a somewhat different provision. Counsel for Diane Paterson and counsel for the Union contended that the rules required that the person nominated should have been continuously throughout the preceding period of 12 months a financial member. An alternative submission by counsel for the Branch put forward in his reply was that the provision required the nominee to be a member paying throughout the period a full subscription and not a lesser subscription assessed for a different category of membership under clause 9(c) of the Federal Rules.

In the case of Lovell and Others v Federated Liquor and Allied Industries Employees Union of Australia (1978-79) 22 A.L.R. 704 the rule providing the qualifications for office which was construed by the Court was as follows:

"All Officers, members of the Management Committee, representatives of Council shall be financial members for 12 calendar months immediately prior to nomination. All officers and representatives as prescribed in this rule shall remain a financial member or forfeit all positions he or she holds."

An amendment to this rule which required "a continuous period of 24 months immediately prior to nomination and who have not been in arrears of contribution during that period" was rejected as oppressive, unreasonable and unjust.

This rule was considered by Smithers J. in that case on page 731. He said:

"If one looks at the first sentence one sees that the critical feature is that it directs attention to the situation which will exist at the moment before nomination. The rule is expressed in terms which look forward and provide a test of the qualifications of the candidate to be applied not earlier than immediately before nomination. The rule prescribes what at that time the condition of the candidates 'shall be'. It is to be implemented by inquiring, at the moment before nomination, not what the candidate's financial condition has been during 12 months previously but what it is then. The question to be asked is: 'Is the candidate today a financial member for twelve months immediately prior to this date?' If he has then paid all dues payable by him and has been a member for 12 months the answer must be in the affirmative. At that stage the candidate is financial in respect of every moment of that 12 months. It is not to the point that during that 12 months there might have been periods when he was not financial. Of course it is possible to mount an argument that the first sentence of r4 does require that the candidate should be a person who during the 12 months has never been unfinancial. But the foregoing considerations point in the opposite direction. Also it is to be observed that the subject matter of the rule is the financiality of officers and committee members, that it is only concerned with the financiality of members considerred as actual or potential officers or committee members. In that case it is current financiality and not past financiality that is in point. In this respect the provisions of the second sentence shed light on the first sentence. If one first reads the rules as though the words 'for twelve calendar months' were omitted, then clearly the only question would be: 'Is the candidate now a financial member?' When those words are inserted they are given full effect by attributing to them a stipulation as to the time 'in respect of which' the person at that date is a financial member. The expression 'for' can be read quite naturally as 'in respect of'. In a rule laying down restrictions on the right to stand for office it ought to be read as imposing only those restrictions which are unambiguously or at least clearly imposed."

Evatt J. on page 736 adopted this reasoning.

It is my opinion that the qualification rule in this matter differs significantly from that construed by Smithers J. In the first instance it indicates quite unambiguously that the inquiry is what the condition of the person nominated "shall have been" for the specified period. The rule considered by Smithers J. prescribed what the condition "shall be" immediately prior to nomination. It is quite clear that in Marilyn Beaumont's case it is her past financial state and not her present condition which is under consideration. Furthermore the rule in this matter has the additional word "fully" qualifying financial member and to this word some meaning must attach.

I reject the alternative contention of counsel for the Branch that it relates to the payment of a full rather than lesser subscription. In my opinion it relates to the financial condition of the nominee during the preceding period and not the category of membership he or she holds or the amount of annual subscription payable for that category. A 'fully financial member" in Rule 18(b)(i) must be consistent with the concept of an "unfinancial member" in Rule 6 and in particular the disqualifications of such a member under Rule 6(b). Rule 6(a) requires the condition of an unfinancial member to be determined by reference to Rule 9 of the Federal Rules. Likewise in my opinion the question whether a person has been a fully financial member during the specified period must be determined under Rule 9 and the circumstances in which under that Rule a member becomes unfinancial.

In my opinion Rule 18(b)(i) requires that a person nominated must have been a financial member throughout the preceding period of 12 months. I consider this means that that person shall not have been unfinancial at any time during the specified period. This conclusion is consistent with Rule 6 of the Branch Rules when it refers to a person being unfinancial. It receives support from Federal Rules 9(e) and (f) which use indiscriminately the expression 'unfinancial' and not financial and specify when a person who is in arrears with payments becomes unfinancial. In respect of a member paying an annual subscription, it is permissible for the subscription to be up to 3 months in arrears before' the member becomes unfinancial. So long as the subscription is paid within 3 months of the due date for an annual subscription (i.e. by 30 September in any year) the member will not have become unfinancial pursuant to Rule 9(e) and thus will have been fully financial throughout the year. In my opinion the word "fully" means that the member must be fully paid up as a financial member and has no reference to category or class of membership. Likewise the fact that this qualification relates to "financial" member indicates that arrears are immaterial unless in consequence the member loses status as a financial member and becomes unfinancial.

It is a much more difficult situation if the member with express or implied approval, pays the subscription otherwise than annually. This difficulty is compounded when it is appreciated that the Branch Council has not expressly determined, as required by Rule 9(e), in respect of what lesser periods instalments of subscriptions may be paid. The Branch Council however offers in its application for membership form the opportunity to pay a subscription half-yearly and must be held impliedly to have approved this lesser period. It may also in consequence of its office practice and procedure in relation to payment and collection of subscriptions be held to have approved other lesser periods for payments of instalments. It is not however necessary for me to rule on these difficult matters on this occasion.

What it is necessary for me to decide is the equally difficult question of 'when' a member who authorized his or her employer to make deductions ("dues deductions") under Rule 9(h) of the Federal Rules becomes unfinancial. The privileged position of a member under that Rule is acknowledged by all, and there is no dispute that such a member is financial so long as the authority to deduct remains in force. It is the existence of the authority and not the making of deductions thereunder which provides the privilege. However a problem arises when the member leaves the employment of the employer to whom the authority is directed. Does the member forthwith become unfinancial upon the umbrella of an authority to the employer being withdrawn? Or does that member have a period of grace such as provided by Rule 9(e) to members paying by annual subscription or by instalments for any lesser period determined by the Branch Council? Counsel for the Union contended for the former alternative and counsel for Diane Paterson for the latter. It was not disputed that the obligation of such a member on dues deductions is to pay in one sum the amount of annual subscription appropriate for the balance of the year or alternatively to authorize another employer to make deductions. However the problem is whether the member has any and if so what period of grace in which to comply before becoming unfinancial.

Counsel for the Union drew attention to the opening words of Rule 9(h), namely "notwithstanding anything contained in these rules" and contended that, as a consequence Rule 9(h) overrides other provisions of the Rules. I accept this submission, but as limited to the matters covered by Rule 9(h). It is only to this extent that other provisions, and in particular Rule 9(e), are overriden and have no application. In my opinion Rule 9(h) does not purport to have anything to say on the question of when a member becomes unfinancial. All it provides is that, notwithstanding other requirements of the Rules concerning payment of subscriptions, a member is financial so long as an authority in writing to his or her employer to deduct subscriptions is in force.

It is therefore open to consider whether Rule 9(e) can be used to determine when a member who has been on dues deductions becomes unfinancial. Two things are certain; Rule 9(e) does not expressly cover the situation and there is no other provision of the Federal or Branch Rules which purports to give guidance. As Rule 9(e) permits members to be in arrears for 3 months or one month, as the case may be, it would be very unfair and prejudicial to deny members ceasing dues deductions a period in which either to pay up the balance of the annual subscription or to sign another authority. It certainly has not been the practice of the Branch to treat such members as unfinancial forthwith on leaving employment. It is my opinion that Rule 9(e) should be read as providing that a member on dues deduction is deemed to be paying subscriptions in respect of a 'lesser period determined' by the Branch Council, and that the due date for the purpose of deeming such member unfinancial is the date of leaving the employment of the person to whom the authority has been given. On this basis a member on dues deductions has one month after the authority ceases to have effect in which he or she may be in arrears before becoming unfinancial. It may be said that such a construction of the Rules received little support from a critical consideration of the particular provisions. If such be the case, it discloses the existence of a complete hiatus in the Rules in respect of members on dues deductions, and the evidence is that they represent a substantial proportion of the members of the Branch. To deny these members the opportunity or indulgence of being in arrears for a short period before becoming unfinancial would seem very unfair and unreasonable. Moreover such a situation would be quite contrary to the manner in which these members are treated by the Branch in compiling its records and informing members of their obligation to bring subscriptions up to date. In my opinion the only practical and just solution is to conclude that members on dues deduction remain financial so long as within one month after the pre-existing authority expires he or she either pays the balance of the year's subscription or signs a further deduction authority.

It is in this context that it is necessary to assess the circumstances of Marilyn Beaumont. In so doing it is not essential to consider and make findings on her situation consequent upon the transfer of her membership from New South Wales. The essential matter is that after making payments whether by way of dues deductions or cash payments which were accepted as paying her subscription to 31 December 1981 she made no further payment until 16 March 1982. At this time she paid an amount purporting to be an annual subscription which was recorded as being referable to a period of 12 months from that date. However subsequently her records were adjusted so that the particular amount paid was, properly in my opinion, applied in the first instance to arrears dating back to 1 January 1982. The crucial matter however is that she was in arrears for virtually two and a half months, and on my earlier findings she was therefore unfinancial for the weeks subsequent to 1 February 1982 until 16 March 1982. It follows that she was not a financial member throughout the "period of one year immediately preceding the date of nomination for office". She was not fully financial during this period and so was not eligible to nominate or be nominated for the office of Secretary of the Branch.

I will hear the parties on the question whether I should order another election or as to what course I should now adopt. I see no need at this stage to investigate and make findings on the other alleged irregularities.