In the matter of the Conciliation and Abritration Act 1904-1980 Hibbert, Maureen Faye & Ors v Federated Clerks Union of Australia

[1984] FCA 468

+C% / a?-

JUDGMENT No. ........ ........ ..

,.HpJ... COURJ. OF. PUS.T.RPL.1.A ) N0.S.A.	1 of 1981
:PL-IPN p.ISTqICT REGISTRY) N0.S.A.	3 of 1981

DJUIS.ION ) N0.S.A. 4 of 1981

No.S.A.17 of 1981

r4o.S.A. 4 of 1983

r4o.S.A. 1 of 1981

N 0 . S . A . 3 o f 1981

r4o.S.A. 4 of 1981

r4o.S.A.17 of 1981

IN THE-HpTT-ER of t h e C o n c i l i ~ t i o n

and A r b i t r a t i o n Act 1904-1980

B E T Y E E N :

MAUWEEN FPJE- H l & B E k T , - f l I C H A E L

JpMES- KN-IGHT. and H I C H A E L A N T H O F ( J

PR.ICHAR#,. PLEXANIP. H-ILNE

RO-BERTSON,. F R E D E R - I C K - WILL.IpH

H IGG INS. .a.r~!A. J A.MES- LESL-IE- @ A 1LE.Y

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ANI) :

B E I - U E E N :

H ICHPEL P N T H O N Y fR.ICHAHI),

FREI)ERICY,- W.1LL.lAM- H IG!i.INS -anp

JPHES LESLIE HA-ILEJ

Applicants

ANP :

FEPERATED. CLEHKS UN-ION OF

AUSl'RpL 14,. H-ARRY- DAW-ID- .K;HANTZ,

LESL-IE- .U ICHARI). HPSELPINE, PETER

DfiU.ID SUMHE.RTOfl,. J O H N . COSHUS

LESSES- .ar~d. .ALHEJ( . FELLOWS H e s p o n d e n t s

IHE- COURT- ORDERS. THAT:

1 . T h e a d o p t i o n by t h e b r a n c h o u n c l l of

t h e S o u t h A u s t r a l i a n B r a n c h of t h e

F e d e r a t e d C l e r k s Union of A u s t r a l i a of

e a c h s u c h r u l e o r r u l e a m e n d m e n t 3s

t h e case may b e as s e t o u t in t h e

f o r e g o i n g d e t e r m l n a t i o n b e validated.

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2 . I n m a t t e r N 0 . S . A . 1 of 1 9 8 1 t h e o r d e r

nisi be d l scha rged .

3. I n m a t t e r N 0 . S . A . 3 of 1 9 8 1 t h e o r d e r

n i s i be d i scha rged .

4 . I n m a t t e r N0.S.A. 4 of 1 9 8 1 t h e o r d e r

n i s i g r a n t e d b e d i s c h a r g e d o t h e r t h a n

t h e order nisi i n r e s p e c t of r u l e l 5

a n d t h a t m a t t e r b e s t o o d o v e r sine d l e

t o b e r e s t o r e d or1 seven days ’ n o t l c e

b y a n y p a r t y .

c J . In m a t t e r No.S.A.17 of 1 9 8 1 t h e o r d e r

n i s i be d i scha rged .

b. I n m a t t e r No.S.A.4 of t h e 1 9 8 3

a p p l i c a t i o n b e d i s m i s s e d .

IN EBm COURT OF AUSTRA_LJA )

SOUTH AUSTRAL IAN DISTRICT REGISTRY) No.S.A.17 of 1981 and

INDUSTRIAL DIVISION N0.S.A. 4 of 1983

.	No. S.A.17 of 1981
IN THE MAD- of the Conciliation

and Arbltration Act 1904-1980

EErwEEN:

MABEEN FAYE HIBBERT, MICHAEL

JAMES KNIGHT and MICHAEL ANTHONY

PRICHARD. ALEXANDA MILNE

ROBERTSON, FREDERICK WILLIAM

BIGGINS and JAMES LESLIE BAILEY

Applicants

AND :

Respondents

. '	- 2 -
AND :
N0.S.A. 4 of 1983

.. .. . . . . . . . ..

. BETWEEN:

M L A E L ANTHONY PRICHARD

FREDERICK WILLIAM HIGGIN; and

JAMES LESLIE BAILEY

Applicants

m:

Respondents

m a t t J. 30 November 1984

REASONS FOR JUDGMENT

The Federated Clerks' Union of Australia (the federal Organization) is and has been for many years an organization of employees registered under the Conciliation and Arbitration Act 1904 (the Act). The federal Organization has several branches within the various states of Australia including South Australia.

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Since the beginning of 1981 there have been several

actions commenced out of the South Auatralian Registry of

the Federal Court by a group of members of the federal

Organization attached to the South Australian Branch (the

Branch.) Included in such group was one -+lichael Anthony -

Prichard who was up and until August 1983 a member of the federal Organization attached to the Branch. It is clear that Mr Prichard was the dominant applicant in the various matters brought by the said group of applicants.

For many years prior to 1981 several of the

officers of both the federal Organization and of the Branch

had been officers duly elected in accordance with the rules of the Organization and of that Branch of the federal Organization. Indeed, Mr Harry Krantz, the Secretary of the Branch, had been elected to that office in the mid 1940’s and had held that office for almost forty years until his recent retirement. Other Branch officials had also held

various official positions within the Branch over	many
year S.

For many years prior to 1981 there was registered under the South Australian Industrial Conciliation and Arbitration Act a trade union whose registered name was the “Federated Clerks’ Union of Australia South Australian Branch. I’ It would appear that each of the off icials of that trade union also held the name office in the Branch of the

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federal Organization and that over the years prior to 1981 one election for the filling of, for example, the office of Secretary of the Federated Clerks' Union South Australian

Branch, would be held. Further, it would appear that over

.. . .. . .. . -

.	the years prior to 1981 meetings of the Branch Council, the
governing body of the Federated Clerks' Union of Australia
South Australian Branch, were held without any clear
indication in the minutes of such meetings as to whether a
particular meeting was a meeting of the registered state

trade union or the Branch of the federal Organization.

The applicants were at the time of the commencement

of the two subject matters members of the federal

Organization whilst the personal respondents were either

officials of	the federal organization or officials	of the
Branch.

In 1978 Mr Prichard commenced employment with the

Branch as a full time organizor, the rules at that time

making no provision that such an organizor be elected. In

or about September, 1980. Hr Prichard's services as such

organizor were dispensed with by the Branch. It is clear

that at or shortly after this time he became aware that

certain federal Branch rule amendments which had been

adopted by the rule-making body (the Branch Council) of the

Branch in 1975 had not in fact been certified by the Federal Industrial Registrar pursuant to S 139 of the Act with the

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consequence that such amendments had not become effective

(s.139(4)). In fact the amendments having been adopted had

been forwarded by the Secretary of the Branch, both to the

Industrial Registrar of the South Australian Industrial

.	Commission for registration pursuant to the South Australian
Industrial Conciliation and Arbitration Act and to the

Secretary of the federal Organization for approval by the federal Executive in accordance with federal r. 12(2) prior to them being lodged with the Federal Industrial Registrar

for certification under S 139 of the Act. Following such

delivery of the said amendments to the State Industrlal

Registrar, those amendments were registered under the South

Australian Industrial Conciliation and Arbitration Act and

consequently became part of the registered rules of the

South Australian trade union. But the amendments forwarded to the federal Executive for approval prior to lodging for certification by the Federal Industrial Registrar had not

received such approval prior to January 1981 and

consequently had never been lodged for certification in

accordance with S 139(4) of the Act with the result that

such amendments did not become effective rules of the Branch

of the federal Organization. Apparently it was and had been

the practice of the Branch to have printed a set of rules of

"The Federated Clerks Union of Australia. South Australian

Branch" which made no reference as to whether the rules were

those of the Branch oi the federal Organization or were the rules of the State registered trade union of the same name.

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In fact, following this practice (after the 1975 amendments

had been registered by the State Industrial Registrar.) a

new rule book was printed including the amendments so that

for some years prior to 1981 there was in circulation and

. use within

the Branch a printed set of rules incorporating the amendments which had been adopted by the rule-making body of the Branch in 1975.

As stated above, this anomaly was known to Mr

Prichard some time before January 1981. At that time the

certified federal Branch rules provided that nominations for

the filling of the offices of the officials of the Branch

other than the Secretary and Assistant Secretary were due to

close during the third week in January. In fact, the rule

book as printed by the Branch indicated that the nominations for such offices closed in the third week of February, this later date being the month provided for in an amendment

adopted by the rule-making body in 1975. Mr Prichard and

certain of the applicants in the various matters referred to

above nominated for particular offices in the Branch of the

federal Organization on the day in January 1981 when,

according to the then certified federal Branch rules such

nominations closed, and lodged those nominations with the

person who had been the Returning Officer in	an earlier
election.

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The fact that such nominations had been lodged

brought to the attention of the Branch that the certified

federal Branch rules were not in accord with the rules as

-set out in the printed rule book for use within the Branch.

. As a consequence certain of the rule amendments which had

been adopted in 1975 and then forwarded to the federal

Executive of the Organization for approval were immediately

lodged with the Federal Industrial Registrar and received

certification on 23 January 1981. The rules amendments then

so certified were not the totality of the rule amendments

which had been adopted by the Branch Council in 1975. The

balance of those amendments were in fact certified by the

Federal Industrial Registrar on 30 September 1981.

Commencing on 13 February 1981 and throughout that

year Mr Prichard and certain of the other applicants In

subject matter S.A.No. 17 of 1981 commenced various actions

under the Act against the federal officials and the Branch Officials. It is unnecessary to detail each action but the

applicants had been granted Orders Nisi in matters S.A.No. 1

of 1981, S.A.No. 3 of 1981 and S.A.No. 4 of 1981 challenging

the constitutions of the Branch Council and Branch Executlve

and the validity of certain Branch rules. In addition,

certain of those applicants had lodged an application under

part IX of the Act (S.A.No.15 of 1981) in respect Of

elections held for the filling of the offices of the Branch,

(other than that of Secretary and Assistant Secretary),

which elections were completed on 31 March 1981.

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The Court commenced hearing matters S.A.Nos. 1, 3

and 4 of 1981 throughout the first half of 1981. Thereafter

when the application under Part IX of the Act in respect of

. the said election was referred to the Court in July 1981 it

was determined that the Orders Nisi which had been granted

pursuant to ss 140 and 141 of the Act in matters S.A.Nos. 1,

3 and 4 of 1981 should be stood over until a determination

of the application for the inquiry into the sald election as

certain of the allegations in those three matters were

raised as issues in the said inquiry.

The subject matter S.A.No.17 of 1981 commenced on

21 October 1981 with the granting of an order nisi to the

applicants herein. In this matter the applicants

challenged the validity of the Branch rules which had been certified by the Federal Industrial Registrar on 23 January

1981 and 30 September 1981. In the main, these rules had

been adopted by the 1975 Council and approved by the federal

Executive either in January or February of 1981. In

addition, certain other amendments had been adopted by the

Branch council in April 1981. The hearing of this matter

was also stood over pending the determination	of the Part IX
inquiry.

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After lengthy evidence and detailed argument in that inquiry a determination in the election dispute was made on 28 June 1983. The background history to the various

matters in dispute between the parties within the Branch are

set out in more detail in the reasons for judgment in that

inquiry and such reasons should be read as being

incorporated in the present reasons for judgment.

Very early in the hearing of matters S.A.Nos. 1, 3 and 4 of 1981 (which were being heard together) it was clear to the Court that there was a serious question as to whether

the Council of the Branch since at least 1973 had been validly constituted. "his query arose (inter alia) in the

following circumstances. The membership of the Branch

belonged to various nominated Sections. The Branch Council, the governing body of the Branch, was constituted by the officers of the Branch and Councillors from the various Sections. The problem was whether the rules of the Branch made provision for valid elections of the Section Councillors and if so whether such Councillors during

relevant periods had been validly elected.

Accordingly, the Court early in 1981 indicated to the parties (including the federal Organization which

appeared in the various proceedings) that it was of the view

that the mituation "cried out" for a scheme pursuant to

s 171D of the Act being approved by the Court so that any

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query as to the validity of the constitution of the Branch Council and its Recutive and of the acts done by the Branch Council or Executive or by persons holding or purporting to hold off ice .within .the Branch might be overcome. The applicants through their counsel then indicated that they would not be seeking orders for any such scheme. It was not until many months later when he was giving evidence and was asked by the Court why he opposed the adoption of a scheme that Mr Prichard stated that it was his belief that federal r. 12(5) prevented the Court from exercising jurisdiction under S 171D. This rule is set out:-

Where a Branch is unable to validly make rescind alter or add to its Rules by reason of its not having a validly elected appointed or constituted person or body of persona (by whatever name called) empowered to make rescind alter or add to its Rules, then the Federal Executive or Federal Council may make rescind alter or add to the Rules of such Branch for the purpose of enabling the Branch to have Rules:-

For its own internal management;

To comply with these Rules;

To comply with the requirements of the

Commonwealth Conciliation and

Arbitration Act and the Regulations made thereunder;

To enable it generally to function as a

Branch of the organization;

AND in so doing the Federal Executive or Federal Council may provide in any such Rules lade by it as aforesaid for the mode in which the objects referred to in clauses (a),(b),(c) and (d) hereof may

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be effectuated, provided that any Rule

so made by the Federal Council shall not

be inconsistent with these Rules or the

Commonwealth C ciliation and

Arbitration Act and Regulations made

thereunder, and shall not prevent a

validly elected appointed or constituted

person or body of persons (by whatever

. name called) thereafter altering in

accordance with the rules of the

organization and of such Branch, any

rules so made for it by the Federal

Executive or the Federal Council."

In fact, in the latter half of 1981 at the request

of the officials of the Branch the federal Executive in the

exercise of its powers under federal r. 12(5) amended Branch

r. 21(d) to make provision for elections in accordance with

the provisions of the Act of section councillors and

inserted a new Branch r. 21A. These two amendments were certified by the Federal Industrial Registrar pursuant o S

139(4) on 3 December 1981.

New r. 21A reads:-

"(1) Subject to 5ub rule ( 2 ) hereof those

persons who at the date of the

certification of this rule are acting as Councillors elected by Sections pursuant to Rule 15 hereof shall be Councillors

notwithstanding any alleged invalidity

in their election and shall be and may

act a5 Councillors until the election of

Councillors pursuant sub o clause

(d)(vi) of rule 21. The term

"Councillors" in thia rule includes

"Alternate Councillors."

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( 2 )	By the 31st March, 1982 or within one
month of the certification of this rule,
whichever is the later, (hereinafter
called the due date), nominations shall
be called for an election of Councillors
in each Section which has not in the ordinary course between the date of

certification of this rule and the due

. date held such election. In such case

the Returning Officer shall declare the

result to the Secretary and advise the

Section Committee and the persons

elected shall take office forthwith In

lieu of at the Annual General Meeting of

the Section as required by Rule

2l(d)(ix) and shall hold offlce untll

the Annual General Meeting of the

Section held in 1983 notwithstanding

that the term is or may be greater than

that provided by Rule 32(b)."

Immediately following the certification of these

two amendments, purported elections of Branch Councillors

were held and thereafter on 19 January 1982 the Branch

Council resolved to "ratify" the several rule amendments

adopted by the Council in 1975 and November 1980 by giving

"full validity and effect" to the earlier resolutions. The

applicants claimed that the January 1982 resolutions were

void and of no effect as the purported rule amendments then

made were contrary to the provisions of Branch r. 41, the

rule-amending rule. Additionally, they challenged the

validity of Branch rr. 21(d) and 21A claiming that those

rule amendments, which had been made by the federal

Executive pursuant to federal r. 12(5), were beyond power.

Further, they challenged the validity of	the	January 1982
Branch Council.

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Thereafter during 1982 the Court continued to hear

the Part IX inquiry.

On 2 2 August 1983 subsequent to the Court's

. determination in the Part IX disputed election inquiry, one Frederick Edward Priest, one of the personal respondents in the various matters, through the office of the solicitors

who had appeared for the various respondents attached to the

Branch, filed a Notice of Motion in matter S.A.No.17 of 1981

being, in effect, an application under S 171C of the Act

seeking a declaration that an invalidity had occurred in the

making of the 1975 rule amendments together with certain

amendments adopted in April 1981 and seeking orders

validating the various Branch rules which had been certified

by the Federal Industrial Registrar on 23 January 1981 and 30 September 1981 as stated earlier herein. These are set

out in the said Motion as being Branch rr. 3 , 8, 15, 16,

16A. 21, 24, 25, 30, 31, 32, 38, 41 and 44A.

Meanwhile, on 28 July 1983 Mr Prichard and two of

the other applicants in the various matters, namely, Mr

Higgins and Mr Bailey, had filed an application in matter

S.A.No.4 of 1983 seeking a declaration that the Branch had

ceased to function effectively and that there were no

effective means under the rules of the federal Organization

or the Branch by which it could be reconstituted or enabled

to function effectively and seeking an order approving a

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scheme for the taking of action set out in a proposed scheme

to enable it to so function.

The relevant parts of ss 171C and 171D are set

. out : -

"171C(1) An organization, a member of an

organization or any person having a

sufficient interest In respect of an

organization may apply to the Court

for a determination of the question

whether an invalidity has occurred in

the management or administration of

the organization or of a branch of

the organization or in an election or

appointment in, or the making or

alteration of the rules of, the

organization or a branch of the

organization a d the Court has

jurisdiction to hear and determlne

the application and to make such

declaration as it thinks proper.

(2) Where, proceedings in under

sub-section (l), the Court finds that an invalidity of the kind referred to

in that sub-section has occurred,	the
Court:

(a)

may make such order as it thinks

fit to rectify or cause to be

rectified the invalidity, or to

negative, modify or cause to be

modified the consequences in law

of the invalidity, or to validate

any act, matter or thing rendered

invalid by or as a result of the

invalidity;

(b)

shall, before making such order,

satisfy itself that such an order

substantial	do	would	not
injustice to the organization or to any member or creditor of the
organization or to any person
having dealings the with
organization;

(c) where any such order is made. may

ancillary	such	or	give
consequential directions as it
thinks fit: and

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(d) may determine what notice,

summons or rule to show cause is

to be given to other persons of

the intention to make such	an
order, and whether and how	it
should be given or served and

whether it should be advertised

in any newspaper.

. ( 3 ) . . . . . ..

171D(1) An organization, a member of an

organization or any person having a sufficient interest in respect of an organization may apply to the Court

for a declaration that:

(a) a part of the organlzation,

including:-

(i) a branch or part of a branch of

the organization. or

(ii)a collective body of the

organization or of a branch of

the organization,

has ceased to exist or o

function effectively and there

are no effective means under the

rules of the organization or

branch by which it can be

reconstituted or enabled	to
function effectively; or

(b) an office or position in the

organization or in a branch of

the organization 1s vacant and

there are no effective means

under the rules the of

organization or branch to fill

the office or position.

and the Court has jurisdiction to

hear and determine the application

make	to	and	a	declaration
accordingly.

( 2 ) Where the Court makes a declaration

under sub-section (l), the Court may,

by order, approve a scheme for the

taking of action by a collective body

of the organization or of a branch of

the organization or by an Officer Or

officers of the organization or of a

branch of the organization for the

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reconstitution of the branch or part of the branch, or of the collective body, or to enable it to function effectively, or for the filling of the office or position.

(3) Before making an order under this

section the Court Shall satisfy

itself that the order would not do

substantial injustice to the

organization or to any member of the

organization.

( 4 )	......
( 5 )	......

(6) ......

(7) . . . . . . ' I

The applications under ss 171C and 171D coming on

for hearing before the Court as presently constituted it was

determined that the two matters should be heard together.

After hearing evidence and lengthy argument as to the proper

course to be adopted, the Court reserved its decisions.

During argument early in the hearing of these two matters it was submitted by Dr Jessup, Counsel for the federal Organization, that the federal Organization was not then in favour of the Court making orders under B 171C in view of the provisions of certified Branch rr. 15 and Zl(d)(vI).

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Branch r . 15 made provision for the number of

councillors from the various Sections within the Branch. As

stated earlier herein the Branch consisted of nine Sections covering different industries. The federal Organization was

. of the view that the formula provided for in r. 15 under

which the number of councillors from the various sections

was calculated was such that an imbalance resulted in

respect of the ratio between the number of members attached

to each section and the number of councillors representing

each section, (cf McLeish v. Kane (1978) 22 ALR 547). Dr

Jessup's complaint concerning Branch r. 2l(d)(vi) was that

the rule could permit unsynchronlzed elections of Branch

Councillors within the varlous Sections of the Branch which

could possibly bring about unfair advantages to particular

members.

Dr Jessup had put the above submisslons at a time

when it was known that the Court would have to adjourn for

some weeks owing to its other commitments. On resumption

after such adjournment, the Court was informed by Dr Jessup

that discussions had taken place between officials of the

federal Organization and officials of the Branch resulting

in undertakings being given by the Branch officials that

amendments to rr. 15 and Zl(d)(vi) would be adopted by the

Branch in accordance with the wishes of the members of the

federal Executive, who, in accordance with federal r. 12(2)

had to approve such amendments before the same could be

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lodged for certification by the Federal Industrial	Registrar
pursuant to S 139(4).

consequence the federal Organization through its counsel then indicated to the Court that

As a

. it could see no

objection to the Court making proper orders under S 171C and

that consequently a scheme pursuant to	S 171D would be
unnecessary.

After a full examination of all matters presented

to the Court by the parties, it is determined that an invalidity has occurred in the making or alteration of the rules of the Branch of the Organization, namely, that the

Branch Councils which adopted the rule amendments the

subject of the S 171C application by Mr Priest were invalidly constituted In that certain purported members of

those Councils had not been validly elected thereto.

Further, the Court has made a full examination of the facts

leading up to such invalidity and of the facts subsequent to

the adoption of the said amendments. As stated, the Court

has had the advantage of hearing counsel representing the

applicants other than Mr Prichard in matter S.A.No. 17 of

1981 and Mr Prichard (who, when the two subject matters were

argued appeared in person); Dr Jessup who appeared on

behalf of the federal Organization and Mr Heywood-Smith who

appeared for Mr Priest and the other officials of the Branch

who had been named as respondents in the two matters.

. .

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accordance with the undertakings referred to earlier herein and if 80 whether there I s any doubt as to the validity of the then constitution of the Branch Council which adopted such amendments.. - .. -

.

Further, on such adjourned date, the Court will hear submissions, if any, as to the final disposition of the part-heard matters, S.A.Nos. 1, 3 and 4 and 17 of 1981.

When formal orders are made under S 171C in

accordance with the above, the Court proposes to dismiss the

application made under S 171D (S.A.No. 4 of 1983).

I certify that this and the

T d J preceding pages are

a tru copy of the Reasons for Judgment herein of his

Honour Mr Justice Evatt.

Dated 30 November 1984