Loh, J.M. v F. O'Grady
[1991] FCA 916
•16 DECEMBER 1991
Re: JOHN MAXWELL LOH
And: F. O'GRADY and OTHERS
No. V I82 of 1991
FED No. 916
Industrial Law
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Gray J.(1)
CATCHWORDS
Industrial Law - registered organisations - rules - performance and observance - petition by members for referendum - rule permitting referendum on matter determined by Divisional Branch Council - whether referendum limited to matter previously so determined or Divisional Branch Council bound to determine subject matter of referendum after petition - whether rule offended requirement for control by members - preliminary question of construction of rule determined against applicant - whether proceeding should be dismissed - whether applicant should be allowed to pursue claim that rules failed to make a provision required by statute.
WORDS AND PHRASES - "matter determined".
Industrial Relations Act 1988 ss. 195, 196, 208, 209.
HEARING
MELBOURNE
#DATE 16:12:1991
Counsel for the Applicant: Mr M. Bromberg
Solicitor for the Applicant: Harry Nowicki and Co.
Counsel for the Respondents: Mr K. Bell
Solicitors for Respondents: Holding Redlich
JUDGE1
The ATAIU and BWIU Amalgamated Union ("the Union") is an organisation, registered pursuant to the Industrial Relations Act 1988 ("the Act"). It appears from his affidavit in this proceeding that the applicant is a member of the Union, in what is called its BWIU Victorian Divisional Branch ("the Branch"). The respondents, who are numerous, constitute the divisional branch council of the Branch.
Not all of the respondents have appeared today, but some of them have appeared by Mr Bell of counsel. Mr Bromberg of counsel has appeared for the applicant. The proceeding is concerned primarily with the provisions of rule 41 of the rules of the Branch, which provides as follows:
" 41 - REFERENDA
(a) On receipt of a petition signed by not less
than 1000 financial members of the Divisional
Branch, Divisional Branch Council shall take a
referendum of the whole of the financial members of the Divisional Branch in respect of any matter
determined by Divisional Branch Council.
Such referendum shall take place within 2 months of the receipt of the petition.
The decision reached by majority of the actual votes recorded shall be binding on the Divisional Branch Council and the members of the Divisional Branch.
(b) Divisional Branch Council may at any time, by
its own motion take a referendum of the whole of the financial members of the Union upon any matter it thinks fit.
(c) The referendum referred to in this rule shall
be conducted as follows:
The Divisional Branch Council shall:
Determine the question to be submitted to the
members and the form of the ballot paper.
Fix the times for the dispatch and return of ballot papers and give the necessary instructions for
printing of same.
Appoint a Divisional Branch Returning Officer and Divisional Branch Scrutineer to conduct the ballot. In all other respects the referendum shall be held as nearly as practicable in the manner provided for the holding of elections of Divisional Branch Officers."
On 8th November 1991, a petition was lodged with the branch secretary of the Branch. The petition purported to bear the signatures of 1420 financial members of the Branch. It sought that a question be submitted to a referendum under what was erroneously referred to as "rule 42". The question on which a referendum was sought was as follows:
"Should the BWIU Division, Victorian Divisional Branch Council amend the BWIU Divisional Branch Rules to provide that:
(i) the term of office of all current office
holders in the BWIU Division, Victorian Divisional Branch expire on 14 January 1992;
(ii) an election be held as soon as practicable to
fill all offices in the BWIU Division, Victorian Divisional Branch for a term of office from 14
January 1992 until 2 January 1994; and
(iii) if the above election is not concluded by 14
January 1992 the current office holder shall remain in office until the election is declared."
The petition was followed by a letter from the applicant's solicitors to the branch secretary, referring to the petition and threatening proceedings if no reply was received by 22nd November 1991. The letter was dated 21st November 1991. In reply, the solicitors for those respondents who have appeared sent a letter by facsimile transmission, dated 22nd November 1991, denying the applicability of rule 41 of the Branch rules on the basis that the petition did not relate to a matter determined by the divisional branch council.
On 27th November, a rule to show cause was granted to the applicant by Heerey J. By that rule to show cause, the applicant seeks an order that the respondents and each of them perform and observe the rules of the union by taking a referendum of the whole of the financial members of the Branch on the question the subject of the petition. The rule to show cause also seeks such further or other orders as the Court deems fit.
On 6th December at a directions hearing, Olney J. fixed 16th December as the date for the hearing of a preliminary issue, the question whether upon the proper construction of the divisional rules the petition relates to a matter within the scope of rule 41. The matter therefore came on before me for determination of that preliminary issue. It is common ground between counsel that the divisional branch council of the Branch has not met since it was created by rules that came into force consequent upon an amalgamation of two previously registered organisations. That council has therefore made no determination on any matter.
Mr Bell sought to raise as an issue preliminary to the preliminary question of construction, the proposition that rule amendments, effected by certification by the Industrial Registrar on 6th December and 13th December respectively, had removed from the divisional branch council its power, which was expressed in the rules previously as a power to amend rules. The point of this submission was to suggest that, even if the preliminary point were to be decided against the respondents, the divisional branch council would have no power to amend rules and could not therefore carry out the objects which the petitioners apparently desired. I am by no means certain that that would be the case, if indeed the council had the power to amend rules at the date when the petition was lodged. There may be a real question whether an amendment to remove that power was effective to stultify the process commenced by the lodgment of the petition. However, on the view which I take of the preliminary point, it is unnecessary for me to determine that issue.
An examination of rule 41(a) of the Branch rules, without the instruction of counsel and without an examination of the rest of the rules of the Union, suggests very strongly that a referendum consequent upon a petition may only take place upon or in respect of a matter which has already been determined by the divisional branch council. That is to say the terms of the rule appear to create a situation in which it is possible for the members by referendum, consequent upon a petition, to overturn some decision of the divisional branch council but not to initiate action by that council.
Mr Bromberg's submissions against this position fall into two streams. In the first place, he suggests that rule 41 should be read in the context of various other referenda provisions found in the rules of the Union. His argument is that, when all of these provisions are examined, there will be seen to be a consistency in the way in which the framers of the rules have tackled the question of referenda, a consistency which leaves always to some deliberative body or deliberative bodies the task of determining upon what matter a referendum will be held.
In order to deal with this submission, it is necessary to examine the terms of the other provisions of the rules of the Union relating to referenda. Rule 20 in the national union rules contains the following provision:
"1. On a decision of a majority of Divisions or Branches or Branches whose membership constitutes a majority of the members, or on receipt of a petition signed by not less than 10 per cent of the financial members of the Union, the National Executive shall take a referendum of the whole of the members of the Union, upon a matter or matters submitted by the Divisions or branches."
Rule 10 of the branch union rules contains the following provision:
"On a decision of a majority of Divisional Branches in the Branch area, or Divisional Branches in a Branch area whose membership constitutes a majority of the members of that Branch, or on receipt of a petition signed by not less than 10% of the financial members of the Branch, the State Executive shall take a referendum of the whole of the members of the Branch upon a matter or matters submitted by the Division or Branches or by the petition."
Rule 11 of the BWIU divisional rules contains the following provision:
"On a decision of a majority of Divisional Branches, or Divisional Branches whose membership constitutes a majority of the members of the Division, or on receipt of a petition signed by not less than 10 per cent of the financial members of the Division, Divisional Executive shall take a referendum of the whole of the members of the Division upon the matter or matters submitted by the Division or Branches."
A provision in similar terms to that appears in rule 10 of the ATAIU national division rules. Those rules also contain a provision in rule 40 similar to that found in rule 41 of the Branch rules with one significant difference. That provision is as follows:
"On receipt of a petition signed by not less than 10% financial members of the union, the Division or Branch Management Committee shall take a referendum of the whole of the financial members of the Division or Branch, in respect of any matter determined by the Division or Branch Management Committee and/or Executive."
It will be seen that the various provisions of the rules of the Union relating to referenda are consistent in that they do make provision limiting the matters upon or in respect of which a referendum is able to occur. They do not, in my view, make provision for some determination subsequent to the receipt of a petition by some deliberative body or deliberative bodies in respect of such matters. It is plain from the first four of the provisions to which I have referred that there is an intention to limit the matters upon which referenda can be taken to those which have been submitted by the divisions or branches lower in the hierarchy than the decision-making body, which is bound to cause a referendum to occur. By a curiously illogical step, perhaps an undesired omission, this deprives those who petition under those provisions of the rules of any opportunity to determine upon what matter a referendum shall take place. It really seems to render the provisions for petitions by ten per cent of the financial members in each case otiose, because ex hypothesi there will already be in existence some matter or matters submitted by the relevant divisions or branches to which the petitioners will be limited in seeking a referendum.
I do not think that the alternative construction for which Mr Bromberg contended can be valid. Where the rules provide that referenda are to be limited to matters determined by divisions or branches, no machinery exists for determining how such matters are to be crystallised, and in particular by which divisions or branches, or by what majority of divisions or branches. In my view, the rules cannot have been intended to impose between the receipt of the necessary requests or petitions for a referendum and the conduct of a referendum a step, wholly unprovided for in their text, for the determination of such a question. The presence of specific provisions, such as that found in rule 41(c) of the Branch rules, for the formulation of the question to be submitted in a referendum and the form of the ballot paper, suggests strongly that there is no implied machinery for the determination of the matter to be submitted. The still unpalatable alternative of the exclusion of the petitioning members from a determination of the matters upon which a referendum should be taken is the preferable one.
The provision which perhaps stands most strongly against Mr Bromberg's contentions in this regard is that from the ATAIU divisional branch rules. That provision is obviously designed to be similar to the provisions of rule 41 of the Branch rules and makes it clear that the referendum provision in each case is intended to operate by way of review of the divisional branch council or divisional branch management committee, as the case may be, and not by way of compelling that decision-making body to initiate action.
The second area of Mr Bromberg's submissions relied upon the provisions of s.195(1)(b)(iv) of the Act, which provides as follows:
"195(1) The rules of an organisation:
...
(b) shall provide for:
...
(iv) the control of committees of the
organisation and its branches respectively by the members of the organisation and branches;"
In brief, the contention was that, unless rule 41 were construed as allowing the petitioners to obtain a referendum on whatever matter they chose, the provisions of rule 41 would in some way infringe that provision of the Act. It is well established that the question whether the requirement that the rules contain provisions as to the control of committees is satisfied is a question which can only be decided by looking at the rules as a whole, to see whether they provide adequately for the subject matter of the statutory provision. Rules such as those dealing with referenda are certainly part of such an examination of the rules. So also are rules dealing with elections and perhaps provisions of other types. It must be emphasised that the question is not whether some particular rule contravenes a provision of the Act, but whether the rules, viewed as a whole, make provision or fail to make provision in accordance with the requirements of the Act. Such a determination can only be arrived at on a review of the rules as a whole. The individual provisions of the rules may continue to be perfectly valid, even if the rules as a whole do fail to make the necessary provision.
Having said that, it is by no means apparent that referenda provisions, limited as those of the Union's rules are, would by themselves cause the rules as a whole to fall foul of the Act. It is not necessarily apparent that a referendum provision limited to a review of the decisions of a decision-making body will necessarily fail to provide adequate control. The question, as I have said, is one for the examination of the rules as a whole.
A point which Mr Bromberg did make was made by reference to rule 16 of the Branch rules, which deals with the powers of the divisional branch committee of management. Those powers are as broad as those of the divisional branch council and are exercised between the meetings of the divisional branch council, which is not required to meet any more frequently than biennially. Mr Bromberg's argument was that, unless a petition could be brought with respect to something which the divisional branch management committee had done or failed to do, there would be insufficient control. It should be noted that, under rule 16(c), the divisional branch management committee acts subject to review of its actions by the divisional branch council. It is possible that a petition could be founded on such a review of the decision. It is likely that, in relation to a controversial matter, there would be at least one person on a divisional branch council keen to raise the question whether the divisional branch management committee had performed its tasks correctly. If the divisional branch council refused to discuss such a matter, that would amount to a determination, which would be sufficient to found a petition under rule 41(a).
For these reasons, I regard it as clear that the provisions of rule 4l(a) are available only in respect of a matter already determined by the divisional branch council. It follows from that that I must determine the preliminary question against the applicant in this proceeding.
The question then arose as to what should be the proper fate of the proceeding as a whole. Mr Bromberg conceded that the applicant would not be entitled to the relief which is presently sought in the rule to show cause, if the preliminary question of construction were determined against him. He did, however, contend that it would be open to the applicant to rely on s.209(7) of the Act and to seek in this proceeding a declaration that the rules of the union contravene s.196 of the Act in a particular respect. It should be noted that s.209(7) of the Act empowers the Court to make a declaration as to the validity of a rule of an organisation, in considering an application under s.209. Section 209 relates to applications seeking orders for the performance or observance of the rules of an organisation, by a person who is under an obligation to perform or observe those rules. It is only in considering such an application that the Court may exercise the power under subs.(7), to make a declaration that the rules contravene section 196. As the applicant is not entitled to the relief sought under s.209, it is not possible that the Court could, in considering an application for that relief, make a declaration such as is contemplated by subs.(7) in the present proceeding.
Even if it were jurisdictionally possible to make such a declaration, I should be most unwilling in effect to convert the proceeding from one under s.209 to one under s.208. To do so would require that the applicant be called on to specify the order or orders which he seeks, that he be required to justify those orders by affidavit material and by appropriate points of claim and that the Union, which is the body which is interested in upholding the validity of its rules, be served with notice of the proceeding and given an opportunity to participate. In the meantime, the respondents to the proceeding, who would not be parties if the matter were heard under s.208 of the Act, would be put to the expense of continuing to resist in some way the granting of relief to the applicant. In my view the proper course, if the applicant wishes to challenge the rules of the Union, is for him to seek a further rule to show cause under s.208 of the Act, naming the union itself as a party and not burdening the present respondents with the requirement to participate in such a proceeding.
For these reasons, I have reached the conclusion that the proper order to make is to discharge the rule to show cause granted on 27 November 1991. I make that order.
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