Loh, J.M. v O'Grady, F
[1992] FCA 469
•02 JULY 1992
Re: JOHN MAXWELL LOH
And: F. O'GRADY; V. RAFFA; M. INGHAM; B. OLIVER; R. WILLIAMS; R. CARTER, A.
TOOTH; D. VAN DAM; M. SANTANA; W. TORPEY; F. DOMINICK; B. GIAGNACOVO; T.
SINCLAIR; R. RYAN; J. NICOL; W. BINGHAM; P. LEEEEENNON; Z. PRAZAC; M. NEWMAN;
V. NICOLI; K. GREEN; D. BLACK and OTHERS
No. V I2 of 1992
FED No. 469
Industrial Law
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Keely A.C.J.(1), Jenkinson(1) and Ryan(1) JJ.
CATCHWORDS
Industrial Law - Commonwealth - Organizations - Rules - Construction - "Referendum ... in respect of any matter determined by Divisional Branch Council" held to mean, not any matter a question concerning which the Council had determined to be submitted to referendum, but any matter concerning which the Council had made a determination.
Industrial Law - Commonwealth - Organizations - Rules - Validity - General - Proceedings in which validity may be determined - Circumstances in which discretionary power conferred by s.209(7) of the Industrial Relations Act 1988 (Cth) to determine validity will not be exercised - Circumstances in which power not available.
Industrial Relations Act 1988 - ss. 208, 209
HEARING
MELBOURNE
#DATE 2:7:1992
Counsel for the Appellant: Mr H. Borenstein
Solicitors for the Appellant: Harry Nowicki and Co.
Counsel for the Respondents: Mr K.H. Bell
Solicitors for the Respondents: Holding Redlich
ORDER
THE COURT ORDERS THAT:
The appeal be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
Appeal from an order of a judge of the court (Gray J.) discharging an order nisi directed to the respondents, who were at relevant times the members of a governing body of a branch of a division of the ATAIU and BWIU Amalgamated Union.
The rules of the Union, which is an organisation registered under the Industrial Relations Act 1988, make provision for the establishment of Divisions as well as branches. There is a BWIU Division, of which the members are those persons whose membership of the Union is authorized by their satisfying one of two of the three general criteria of eligibility for that membership; and an ATAIU Division, of which the members are those persons whose membership of the Union is authorized by their satisfying the third of those criteria. Within each Division are branches of that Division. All members of a Division "residing or employed" in the State or territory in relation to which a Divisional Branch has been constituted are members of that Divisional Branch. Branches of the Union, as distinct from Divisional Branches, have as members every person who is a member of a Divisional Branch in the State or Territory in relation to which that Branch of the Union has been established. One of the Divisional Branches of the BWIU Division of the Union is the Victorian Divisional Branch. The rules of the Union include a set of rules for Divisional Branches of the BWIU Division. A similar, but not identical, set of rules for Divisional Branches of the ATAIU Division is included in the rules of the Union. The rule which has given occasion for the controversy between the parties to this appeal is rule 41 of the BWIU Divisional Branch Rules, which provides:
`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."
A document alleged to be a petition complying with the requirements of Rule 41 was received by the secretary of the Victorian Divisional Branch. The petition included a statement of a question on which the petitioners sought a referendum under Rule 41. The question was:
"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 holders shall remain in office until the election is declared."
The petition not having been granted, the applicant sought and obtained from a judge of this court a rule nisi directed to the members of the Divisional Branch Council to show cause why it should not be ordered that they perform and observe the rules of the ATAIU and BWIU Amalgamated Union by holding the referendum which the petitioners had sought. An order was subsequently made that there be first determined by the court the question whether such a referendum would be one "in respect of any matter determined by Divisional Branch Council," within the meaning of that phrase in Rule 41. Gray J. heard and determined that question in the negative and thereupon ordered that the rule nisi be discharged.
On the hearing of the appeal against that order it was common ground that the Divisional Branch Council had never considered, and therefore had never made any determination about, any of the matters which the question posed by the petitioners raised. Mr Bell, of counsel for those of the respondents who had appeared in the proceeding determined by the order of Gray J., submitted that the expression "any matter determined by Divisional Branch Council" in Rule 41 meant any matter concerning which the Council had made a determination. Mr Borenstein of counsel for the appellant submitted that the phrase meant any matter a question concerning which the Divisional Branch Council had determined, in performance of the obligation imposed on the Council by Rule 41(c), was to be submitted to the members. In support of his submission Mr Borenstein pointed to other provisions of the Union's Rules for the holding of referenda, each of which, he said, imposed on a particular organ or class of organs constituted by the Rules, or on a particular fraction of the number of members of an organ, the responsibility of specifying the subject matter of the referendum. In Rule 41 the phrase which concludes the first sentence of paragraph (a) should, it was said, be understood as imposing that responsibility on the Divisional Branch Council, thus maintaining consistency with the other referenda provisions and the policy which it was submitted that they disclose. But the language of those other referenda provisions is different. The rules of the registered organisation, called "National Union Rules", include Rule 20, the relevant parts of which are:
"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.
2. National Executive or National Conference may at any time of its own motion take a referendum of the whole of the members of the Union upon any matter it thinks fit.
3. The referendum referred to in this rule shall be conducted as follows:
National Executive shall:
Determine the question to be submitted to the members and the form of the ballot paper.
The "Branch Union Rules" include Rule 10, the relevant parts of which are:
"(i) 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 Divisional Branches or by the petition.
(ii) The State Executive or State Conference may at any time of its own motion take a referendum of the whole of the members of the Branch or of the whole of the financial members of the Branch upon any matter it thinks fit.
(iii) The referendum referred to in this Rule shall be conducted on the basis that the State Executive shall determine the question to be submitted to the members entitled to vote and the form of the ballot paper...."
The "ATAIU National Division Rules" include Rule 10, the relevant parts of which are:
"(i) 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, the Divisional Executive shall take a referendum of the whole of the members of the Division upon the matter or matters submitted by the Divisional Branches. A decision reached by a majority of the actual votes recorded shall be binding on the Divisional Conference Divisional Executive and the members of the Division.
Divisional Executive may at any time by its own motion take a referendum of the whole of the members of the Division upon any matter it thinks fit.
(ii) The referendum referred to in this rule shall be conducted as follows:
Divisional Executive shall:
(a) Determine the question to be submitted to the members and the form of the ballot paper."
Rule 11 of the "BWIU Divisional Rules" is in the same terms as Rule 10 of the ATAIU National Division Rules.
The "ATAIU Divisional Branch Rules" include Rule 40, which provides:
"(a) (i) On receipt of a petition signed by not less than 10% financial members of the union, the Divisional Branch Management Committee shall take a referendum of the whole of the financial members of the Divisional Branch in respect of any matter determined by the Divisional Branch Management Committee and/or Executive.
(ii) The petition shall have set out the members full name, address, signature and the date the said petition was signed by the member. In determining the 10% requirement of financial members for a referendum to be conducted, the petition shall be presented to the Divisional Branch Secretary within 30 days of the first financial member signing the aforesaid petition. Members who signed the petition in excess of the 30 days required by this sub-rule shall not be included in determining the calculation of 10% financial members.
(iii) Such referendum shall take place within 2 months of the receipt of the petition.
(iv) The decision reached by a majority of the actual votes recorded shall be binding on the Divisional Branch Management Committee and the members of the Divisional Branch.
(b) The Divisional Branch Management Committee may at any time, by its own motion, take a referendum of the whole of the financial members of the Divisional Branch upon any matter it thinks fit.
(c) The referendum referred to in this rule shall be conducted as follows:
The Divisional Branch Management Committee 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."
The description of the content of the duty imposed in the first sentence of each of the rules quoted is similar in all those rules except the rule under present consideration and the Rule 40 last quoted. Those latter two are similar. In each of them the duty is expressed : "shall take a referendum .... in respect of any matter determined by" a particular organ or one of several organs. In all the others the duty is expressed : "shall take a referendum ... upon a (or, in one case, the) matter or matters submitted by" an organ or, in one case, by a petition. In each case a separate duty is imposed to "(d)etermine the question to be submitted to the members". In our opinion a comparison of these rules provides no support for the construction of Rule 41 for which Mr Borenstein contended. The contrast which the language of Rules 40 and 41 makes with the language of the other rules strengthens the conviction, which the mere words induce, that the expression "matter determined by Divisional Branch Council" indicates a matter in respect of which Divisional Branch Council has before receipt of the petition made a determination, in the sense of a decision.
Having determined the question ordered to be determined first, Gray J. gave consideration to the further conduct of the proceeding upon the order nisi. It was submitted to him by Mr Bromberg of counsel for the applicant that he should consider whether the Divisional Branch Rules contravened s. 196(a) or s.196(c) of the Industrial Relations Act 1988. Those paragraphs provide:
"The rules of an organisation:
(a) shall not be contrary to, or fail to make a provision required by this Act or an award, or otherwise be contrary to law;
....
(c) shall not impose on applicants for membership, or members, of the organisation, conditions, obligations or restrictions that, having regard to the objects of this Act and the purposes of the registration of organisations under this Act, are oppressive, unreasonable or unjust."
Mr Bromberg referred to the requirement of s. 195(1)(b)(iv) that the rules of an organisation shall provide for the control of committees of an organisation and its branches respectively by the members of the organisation and branches, and to paragraphs (g) and (h) of s.3, which read:
"The objects of this Act are:
(g) to encourage the democratic control of organisations, and the participation by their members in the affairs of organisations;
(h) to encourage the efficient management of organisations..."
The construction of Rule 41 which Gray J. had adopted produced the result, in Mr Bromberg's submission, that the Divisional Branch Rules of which it forms part failed to make adequate provision forl the control of committees of Divisional Branches by the members of those Branches, and imposed on members of the ATAIU and BWIU Amalgamated Union conditions and restrictions that were oppressive, unreasonable and unjust, having regard to those objects of the Act to which he had pointed. Mr Bromberg sought his Honour's exercise of the jurisdiction conferred by sub-section 209(7) of that Act on the Court. Sections 208 and 209 provide:
"208.(1) A member of an organisation may apply to the Court for an order under this section in relation to the organisation.
(2) An order under this section may declare that the whole or a part of a rule of an organisation contravenes section 196 or that the rules of an organisation contravene section 196 in a particular respect.
(3) An organisation in relation to which an application is made under this section shall be given an opportunity of being heard by the Court.
(4) The Court may, without limiting any other power of the Court to adjourn proceedings, adjourn proceedings in relation to an application under this section for such period and on such terms and conditions as it considers appropriate for the purpose of giving the organisation an opportunity to alter its rules.
(5) Where an order under this section declares that the whole or a part of a rule contravenes section 196, the rule or that part of the rule, as the case may be, shall be taken to be void from the date of the order.
(6) Where:
(a) the Court makes an order declaring as mentioned in subsection (2) in relation to the rules of an organisation; and
(b) at the expiration of 3 months from the making of the order, the rules of the organisation have not been altered in a manner that, in the opinion of the appropriate authority, brings them into conformity with section 196 in relation to the matters that gave rise to the order; the appropriate authority shall, after giving the organisation an opportunity, as prescribed, to be heard on the matter, determine, by instrument, such alterations of the rules as will, in the appropriate authority's opinion, bring them into conformity with that section in relation to those matters.
(7) The appropriate authority may, on the application of the organisation made within the period of 3 months referred to in subsection (6) or within any extension of the period, extend, or further extend, the period.
(8) Alterations determined under subsection (6) take effect on the date of the instrument.
(9) At any time after a proceeding under this section has been instituted, the Court may make such interim orders as it considers appropriate in relation to a matter in relation to which the matters raised in the proceeding are relevant.
(10) An order under subsection (9) continues in force, unless expressed to operate for a shorter period or sooner discharged, until the completion of the proceeding concerned.
(11) In this section:
`appropriate authority' means:
(a) in relation to the eligibility rules of an organisation - a designated Presidential Member; or
(b) in relation to the other rules of an organisation - the Industrial Registrar.
(12) In this section, a reference to a rule, or the rules, of an organisation includes a reference to a rule, or the rules, of a branch of an organisation.
209. (1) A member of an organisation may apply to the Court for an order under this section in relation to the organisation.
(2) Before making an order under this section, the Court shall give any person against whom the order is sought an opportunity of being heard.
(3) The Court may refuse to deal with an application for an order under this section unless it is satisfied that the applicant has taken all reasonable steps to try to have the matter the subject of the application resolved within the organisation.
(4) At any time after the making of an application for an order under this section, the Court may make such interim orders as it considers appropriate, and, in particular, orders intended to further the resolution within the organisation concerned of the matter the subject of the application.
(5) An order under subsection (4) continues in force, unless expressed to operate for a shorter period or sooner discharged, until the completion of the proceeding concerned.
(6) An order shall not be made under this section that would have the effect of treating as invalid an election to an office in an organisation or a step in relation to such an election.
(7) Where the Court, in considering an application under this section, finds that the whole or a part of a rule of the organisation concerned contravenes section 196 or that the rules of the organisation concerned contravene that section in a particular respect, the Court may, by order, make a declaration to that effect.
(8) Section 208 (other than subsections
(1) to (4) (inclusive)) applies in relation to an order made under subsection (7) of this section as if the order had been made under section 208.
(9) In this section:
`election' includes a purported election that is a nullity;
`order under this section' means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules."
Gray J. was of the opinion that, after he had adopted a construction of Rule 41 which, as the appellant conceded, precluded the making of the order absolute, the jurisdiction conferred by sub-section 209(7) did not remain available to him for exercise in the proceeding then pending before him. But he concluded that, in any event, the circumstances did not warrant the exercise of the discretionary jurisdiction conferred by the sub-section. His Honour pointed out that the proper exercise of the jurisdiction would require the formulation of points of claim, the adduction of evidence, consideration of the whole of the Divisional Branch Rules and probably other parts of the National Union Rules, and the giving to the Union itself of an opportunity to be heard. None of those things had been done in the proceeding. The proper course, in his Honour's opinion, was to bring the proceeding to a conclusion by discharging the order nisi, and leave the appellant to institute a proceeding under s.208, if he were so advised. That is what his Honour did.
Mr Borenstein advanced as a ground of his appeal the contention that Gray J. erred in refusing to exercise the jurisdiction conferred by sub-section 209(7), supported by the same submissions as were addressed to Gray J.
We assume, but without deciding, that the jurisdiction was available. We agree, for the reasons his Honour gave, with his discretionary judgment against exercising the jurisdiction.
The appeal will be dismissed.
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