J R Tabner Pty Ltd v Motor Traders Association of New South Wales
[1992] FCA 171
•11 MARCH 1992
Re: J.R. TABNER PTY LIMITED as trustee for the Tabner Family Trust trading as
"Tabner's Roadhouse"
And: MOTOR TRADERS' ASSOCIATION OF NEW SOUTH WALES; SERVICE STATION
ASSOCIATION LIMITED and CLAUDE RAYMOND BURGESS an inspector appointed under
the Industrial Arbitration Act 1940, as amended.
No. N I32 of 1991
FED No. 171
Industrial Law
COURT
THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
INDUSTRIAL DIVISION
Wilcox J.(1)
CATCHWORDS
Industrial Law - Membership of registered employer organisation - Applicant affiliate member of registered organisation through membership of another organisation - Error in transmission of applicant's name to registered organisation - Application for determination of question of invalidity in management or administration of the registered organisation - Whether entry of wrong name constitutes invalidity - Persons erroneously named as members not qualified for membership - Declaration as to applicant's actual membership of organisation at all material times - Consideration of position of ex-employees making complaint of underpayment of wages, as calculated by reference to State awards applicable if applicant was not member of registered organisation - Declaration granted.
Industrial Relations Act 1988, s.258.
HEARING
SYDNEY
#DATE 11:3:1992
Counsel for the Applicant: P. Kite
Solicitors for the Applicant: Minter Ellison
Solicitor for the First and
Second Respondents: J. Catanzariti
Solicitors for the First and
Second Respondents: Clayton Utz
Solicitor for the Third
Respondent: D. McGrane
Solicitors for the Third
Respondent: Prosecutions Branch
Department of Industrial Relations
ORDER
The admission to affiliate membership of the Motor Traders' Association of New South Wales of J.R. and R.A. Tabner in or about January 1985 was invalid.
The invalidity be rectified by J.R. and R.A. Tabner Pty Limited being treated for all purposes as an affiliate member of the Motor Traders' Association of New South Wales as and from January 1985; and
All acts, matters and things rendered invalid by or because of the invalidity be validated.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an application under s.258 of the Industrial Relations Act 1988 whereby the applicant, J.R. and R.A. Tabner Pty Limited, seeks the determination of certain questions in connection with its membership of a registered organisation, namely the Motor Traders' Association of New South Wales. The Motor Traders' Association is the first respondent. The second respondent to the application is Service Station Association Limited, which is an affiliate of the Motor Traders Association. The third respondent is Claude Raymond Burgess, an inspector appointed under the Industrial Arbitration Act 1940 (NSW). The facts of the case illustrate once again the high price which the community pays for the division between the Commonwealth and the State governments of the law relating to, and supervision of, industrial affairs.
Mr and Mrs Tabner, who are the directors of the applicant company, have been involved in the operation of a petrol selling outlet on the Newell Highway near Narrabri since 1972. The outlet has always been known as "Tabner's Roadhouse". When they commenced operations they traded under the name "J.R. and R.A. Tabner"; that is to say, as a partnership. In 1979 they caused to be incorporated a company called J.R. and R.A. Tabner Pty Limited; that is, the present applicant. At the same time they caused to be incorporated a second company, Tabner's Roadhouse Pty Limited. That company changed its name in 1990 to Tabner's Investments Pty Limited. However, in the years when it was still known as Tabner's Roadhouse Pty Limited the company operated the service station and shop which had previously been operated by the partnership. The partnership apparently expanded the business, beyond what it was when first purchased. After Tabner's Roadhouse Pty Limited took over, it expanded further.
In April 1982 Tabner's Roadhouse Pty Limited made application to the Service Station Association for membership of that organisation. There was in existence at that time an affiliation agreement between the Service Station Association and the Motor Traders' Association. Mr Tabner has sworn that the primary reason why Tabner's Roadhouse Pty Limited became an affiliate member of the Motor Traders' Association - as it did by completing the appropriate form in 1982 - was so that it would be bound by certain federal awards. During the period until 30 June 1984 Tabner's Roadhouse Pty Limited continued to operate the business. It continued to be a member of the Service Station Association and an affiliate member of the Motor Traders' Association. There does not seem to be any problem about the situation during this period.
In early 1984 Mr and Mrs Tabner established a family trust. They caused the applicant company to become trustee of that trust and they arranged that, as from 1 July 1984, the business that had previously been conducted by Tabner's Roadhouse Pty Limited, and before that by themselves personally, would be transferred to the present applicant, that is J.R. and R.A. Tabner Pty Limited.
Mr and Mrs Tabner arranged for the services of the existing employees to be terminated and for them to be re-employed by the present applicant as from 1 July 1984. They say that, since that time, all employees of the business have been paid in accordance with the relevant federal awards. Apparently all of the formalities of the changeover were attended to except for the matter of membership of the Service Station Association and the Motor Traders' Association. Membership of the Service Station Association is by the calendar year. Members who renew their membership of that association are automatically treated as having their membership of the Motor Traders' Association renewed for the same calendar year.
Mr Tabner says that he received a notice at about the end of 1984 regarding renewal of the membership of Service Station Association. He realised that the existing membership was in the name of Tabner's Roadhouse Pty Limited, which company was of course no longer the operator of the business or the employer of the people who worked at the business. Accordingly, on 9 January 1985 he wrote a letter to the Service Station Association in the following form:
"Please change our company name in your records from Tabner's Roadhouse Pty Ltd to J.R. and R.A. Tabner Pty Ltd as Trustees for The Tabner Family Trust Trading as Tabner's Roadhouse."
It appears that the Service Station Association acted on this letter. So far as its own records were concerned, thereafter the membership entry was shown in the name of "J.R. and R.A. Tabner Pty Limited as trustees for the Tabner Family Trust trading as Tabner's Roadhouse"; that is to say, the entry was completely correct.
Unfortunately, however, the letter which the Service Station Association sent to the Motor Traders' Association, and which was designed to effect the appropriate change in affiliate membership of the latter association, was obscure and misleading. The letter was dated 25 January 1985; in its body it simply says: "Please note the changes in the membership listed below and adjust your records accordingly." After the signature of the writer appears the following: "J.R. and R.A. Tabner, Tabner's Roadhouse Pty Ltd, 33-35 Cooma Road, Narrabri 2390. Please note trading name: Tabner's Roadhouse: not Pty Ltd."
I should say that the address, 33-35 Cooma Road, Narrabri, is the correct address; this street apparently constitutes part of the Newell Highway. I think that it is possible to construe the notation on the letter in two parts. The second part seems to refer to the business name which was being used. It correctly states that the business name was "Tabner's Roadhouse" without any addition of the abbreviations "Pty Ltd". It is probably also correct, as counsel for the applicant suggests, that the intention was that the first name shown in the notation, that is, "J.R. and R.A. Tabner," was the incoming member and the second name, "Tabner's Roadhouse Pty Ltd," was the outgoing member. Certainly the latter part of that construction accords with the actual facts. The difficulty, of course, is that this construction means that the letter informed the Motor Traders' Association that the incoming member was, "J.R. and R.A. Tabner"; that is to say, the two individuals personally rather than a company which included their names in its title. The Motor Traders' Association was unaware of the error. It apparently noted in its records the name of the new member as "J.R. and R.A. Tabner".
There was no pattern of conduct in this case in relation to membership, as for example in two cases which were cited in argument by counsel for the applicant: The Australian Commonwealth Shipping Board v The Federated Seamen's Union of Australasia (1925) 35 CLR 462 and Re Porter; Re Transport Workers Union of Australia (1989) 32 IR 105. The reason for this is that the Motor Traders' Association does not have direct contact with members of affiliated bodies who are themselves affiliate members of the Motor Traders' Association. From time to time it supplies information about federal awards to affiliated organisations such as the Service Station Association. The Service Station Association passes this on to persons who are members of both associations, but affiliate members do not receive correspondence, accounts or other material directly from the Motor Traders' Association. Nor is any membership fee paid directly by affiliate members of the Motor Traders' Association to that organisation. I gather that the system is that a payment is made by affiliated organisations, such as the Service Station Association, the amount of which reflects the number of persons who are affiliated members of the Motor Traders' Association and also members of the affiliated body.
As a result of these facts there was no correspondence which would have revealed the error. The error only came to light when a complaint was made to officers of the New South Wales Department of Industrial Relations by three persons who had been employed in the business and alleged that they had not been paid their proper wages. Apparently, the business had expanded to the point where it included a bakery. These three persons were employed in the bakery. A question arose in the mind of an inspector employed by the New South Wales department as to the appropriate award. When he took the matter up with Mr Tabner, Mr Tabner told him that he was covered by relevant federal awards and explained that his company was an affiliate member of the Motor Traders' Association. However, when inquiry was made of that organisation it emerged that the affiliated member was "J.R. and R.A. Tabner"; not the company.
After a voluminous exchange of correspondence with Federal and State Ministers, and between them, extending over a period of about three years, summonses were issued out of the Industrial Magistrate's Court against J.R. and R.A. Tabner Pty Limited, alleging failures to comply with various provisions of New South Wales industrial law.
Both the Service Station Association and the Motor Traders' Association have accepted that a mistake occurred in the name of the member of the Motor Traders' Association shown on its records since January 1985. The Motor Traders' Association has purported retrospectively to validate the matter. A resolution was passed by the governing council of the Motor Traders' Association on 25 November 1991 stating that the governing council recognised the affiliate membership of J.R. and R.A. Tabner Pty Limited of Narrabri, trading as Tabner's Roadhouse, to operate from 25 January 1985 to 30 July 1991.
The resolution went on to say that the resolution was intended to rectify:
"the existence of a simple clerical error and overcomes any inconsistency of the affiliate member in payment of wages under the federal award provisions applicable to MTA members, during this particular period..."
I think that it is relevant, in considering whether the Court ought to make any order under s.285, to know the position taken by the organisation. But, of course, a resolution of the organisation's governing council cannot change the facts.
The question arises whether, in the above circumstances, there has been an invalidity capable of attracting jurisdiction under s.258 of the Industrial Relations Act. Section 258(1) provides that:
"An organisation, a member of an organisation or any other person having a sufficient interest in relation to 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 or a branch of the organisation;
(b) an election or appointment in the organisation or a branch of the organisation; or
(c) the making or alteration of the rules of the organisation or a branch of the organisation."
I do not doubt the standing of the present applicant to make an application under the section. The question is whether what has occurred amounts to an invalidity in the management or administration of the organisation.
I have come to the conclusion that it does. The rules of the organisation provide for two categories of members. The first category may be described as "full members" and the second category as "affiliate members". The latter are dealt with by rule 10 of the rules of the Motor Traders' Association. The relevant provision is sub-rule (2) which reads:
"Any member for the time being of an affiliate who is eligible for membership of the Association and is desirous of being admitted as an affiliate member of the Association may be admitted as such upon such terms and subject to such conditions as the terms and conditions of affiliation between the affiliate of which he is a member and the Association shall prescribe. Upon his admission as an affiliate member of the Association the Executive Director shall forthwith enter his name and address in the register together with the name of the affiliate to which he belongs and he shall thereupon be deemed to have become and which he belongs and he shall thereupon be deemed to have become and remain an affiliate member of the Association and bound by this Constitution and these Rules and to be entitled to all the rights and privileges of affiliate membership of the Association so long as his name remains in the register as an affiliate member thereof."
The affiliation agreement between the Motor Traders' Association and the Service Station Association is in evidence. It is not necessary to go to its provisions. It is sufficient to say that it is a condition of affiliation that a particular person be a member of the affiliated organisation. This is clear, both from the agreement and the terms of rule 10(2). The individuals, J.R. and R.A. Tabner, were not, of course, members of the Service Station Association at any relevant time. Consequently their admission as affiliate members contravened rule 10(2). It amounted to an invalidity within s.258.
Section 258(2) goes on to say: "On an application under subsection (1), the court may make such declaration as it considers proper." There is no problem about a declaration of invalidity. But, of course, the applicant desires something more. The applicant's hope is to obtain an appropriate declaration as to its membership of the Motor Traders' Association, and subjection to the relevant federal awards, at the time when the three former employees were working for it; and, in that way, to influence the presently pending prosecutions.
Subsection (3) of s.258 provides:
"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; or
(c) to validate any act, matter or thing rendered invalid by or because of the invalidity."
The power given by subs.(3) is qualified by subs.(5), requiring the Court not to make an order under subs.(3) without satisfying itself that such an order would not do substantial injustice to the organisation, any member or creditor of the organisation or any person having dealings with the organisation. For the purposes of subs.(5), in the present case the relevant organisation is the Motor Traders' Association. On the evidence it is clear that the making of an order would not do substantial injustice to that organisation or to any member or creditor of the organisation. There is no evidence suggesting prejudice to any person having dealings with the organisation.
I appreciate that the granting of the relief which is sought may affect the pending prosecutions; indeed it is designed to do so. This may have some indirect effect upon the compensation entitlements of the persons who made the complaints about under-payments. But they are not persons who are covered by subs.(5); they are not persons having dealings with the organisation. Consequently, I do not think that subs.(5) stands in the way of an order being made.
The powers conferred by subs.(3) are very wide. Parliament clearly contemplated that the Court should be able to act retrospectively to validate an invalidity. In exercising that power, I think that the Court should be cautious and, in the present case, I bear in mind the fact that the orders sought may affect the position of the three ex-employees. On the other hand, I think it is crystal clear that at all times it was the intention of Mr and Mrs Tabner that the company which was operating the business should be a member of the Motor Traders' Association and should be bound by the relevant federal awards. This is not a case where the problem has arisen from any act or omission of the employer-member; but rather because the Service Station Association misreported the name of its member when notifying the Motor Traders' Association of the change in membership. If the result of the order that I make is that the ex-employees are remitted to the position in which they would have been had the error not occurred, it seems to me that no injustice is done to them. It may be that they have been short paid even by reference to the relevant federal award. There is no evidence of that fact before me; but, if that is so, they have their rights under the federal awards. The order that I propose to make would render it impossible for J.R. and R.A. Tabner Pty Limited to deny that they were, at the relevant time, bound by the relevant federal awards. If, of course, on their proper construction and having regard to the work which the ex-employees were doing, the federal awards were inapplicable to their work, so that they fell under a residual State award, nothing that I do will interfere with that situation. All that I will be doing will be to rectify the mistake which was made, leaving the merits of the matter unaffected. If I am depriving the ex-employees of a lucky windfall because of the mistake, this does them no injustice. Accordingly, I propose to grant the relief sought.
I make the following orders: I declare that the admission to affiliate membership of the Motor Traders' Association of New South Wales of J.R. and R.A. Tabner in or about January 1985 was invalid. I order that the invalidity be rectified by J.R. and R.A. Tabner Pty Limited being treated for all purposes as an affiliate member of the Motor Traders' Association of New South Wales as and from January 1985 and I validate all acts, matters and things rendered invalid by or because of the invalidity.
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