Ludwig, W.P. v Hodder, E.R.

[1990] FCA 174

CATCHWORDS

INDUSTRIAL LAW - Registered organisations - Amendment of rules by Executive Council when Convention not sitting - Sufficiency of notice of motion - Whether notice given of intention to vary or rescind previous resolution - Implied variation or rescission of previous resolution - Adoption of "central funding rules" - Whether within power of Executive Council or whether they effected a fundamental alteration to the structure of the organisation - Whether they prevented the rules from providing for control of a committee by the members of the organisation - Whether they imposed on members conditions, obligations or restrictions that are oppressive, unreasonable or unjust.

Industrial ~elations	Act 1988 (Cth) ss 195(l)(b)(iv) and 196(a)
and (c)

William Patrick Ludwig v Err01 Raymond Hodder and The Australian

Workers' Union

Ryan J

Nelbourne

30 April 1990

IN THE FEDERAL COURT OF AUSTRALIA	) )
QUEENSLAND DISTRICT REGISTRY	) NO Q1 5 of 1989
)
INDUSTRIAL DIVISION	1

BETWEEN: WILLIAM PATRICK LUDWIG

(Applicant)

AND :  ERROL RAYMOND HODDER

(First Respondent)

AND :  THE AUSTRALIAN WORKERS' UNION

(Second Respondent)

Judge Making Order: Ryan J

Date of Order:	30 April 1990
Where Made:	Melbourne

MINUTES OF ORDER

THE COURT ORDERS:

1.     That the rule nisi be discharged.

NOTE: Settlement and entry of orders is dealt with in 0.36 of

the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA	) )
QUEENSLAND DISTRICT REGISTRY	) NO Q1 5 of 1989
1
INDUSTRIAL DIVISION	1

BETWEEN: WILLIAM PATRICK LUDWIG

(Applicant)

AND :  ERROL RAYMOND HODDER

(Flrst Respondent)

AND :  THE AUSTRALIAN WORKERS1
UNION

(Second Respondent)

Coram: Ryan J
Date: 30 April 1990

Place: Melbourne

REASONS FOR JUDGMENT

The Australian Workers' Union ("the AWU") 1s an

organisation of employees registered under the Industrial

Relations Act 1988 ("the Act"). Before the Act came into	operation, the AWU had, since 16 May 1905, been registered as
an organisation of employees under the Conciliation and Arbitration Act 1904. There has also been registered since 23 March 1917 under the Industrial Conciliation and Arbitration Act 1961-1988 (Qld) a body known as "The Australian Workersr Union of Employees, Qld", ("the State Union").
It seems that until 1971, the rules of the AWU and of the State Union were substantially identical. As well, the two bodies were administered as if they were one and the same entity. An application by a member in Queensland for membership of the AWU was treated as an application for membership of the State Union and vice versa. One membership fee was paid and a single membership ticket was issued attesting to membership of the Queensland Branch of the AWU. Funds and property were held and administered without differentiating between the Queensland Branch of the AWU and the State Union. Only one election was held, from time to time, and the successful candidates were treated as being entitled to act as officers and executive members of both the Queensland Branch of the AWU and the State Union. At meetings of those officers and executive members, no distinction was drawn between the two entities which they were entitled to administer. One set of books and financial records was maintained to produce a single balance sheet, one copy of which was filed with the Commonwealth Industrial Registrar to discharge the obligation under the Conciliation and Arbitration Act in respect of the Queensland Branch of the
AWU. Another copy of the same balance sheet was filed with the State Industrial Registrar in Queensland to meet the
requirements of the laws of that State with respect to the State Union.
From early 1988, the Executive Council of the AWU has been in negotiations with the Federated Ironworkers' Association ("the FIA") with a view to amalgamation of the two organisations. One of the administrative features which has been seen to be necessary or conducive to that amalgamation is a concept designated as "central funding". A document indicating how that concept has been implemented within the
FIA was referred to the varlous Branch Executives of the AWU
under cover of the following resolution of the Executive Council of the AWU of 28 January 1988:

"That this Document be referred to the respective Branch Executives for their consideration and for examination by the accountst clerks and officers, and each of the Branches to assess as to what impact Central Funding administration will have upon the respective Branches and where possible or necessary, that changes be made to the FIAts outline to more appropriately meet the needs of the Australian Workers' Union."

At a further meeting of the Executive Council of the AWU, it was unanimously resolved on 1 march 1988 that:

"The Executive Council of the Australian Workers' Union supports in principle Central Funding appropriate to the administration of a Federal Union. "

At a later meeting of the Executive Council of the AwU on 31 May 1988, it was resolved, again unanimously:

"That Executive Council commence procedures to establish a Central Funding system appropriate to

such system not be implemented until the Branches	the administration of a Federal Union. However,
are satisfied with the style of such procedures."

On 5 July 1988, mr G. Barr, the then General Secretary

of the AWU, sent a circular letter to all Branch Secretaries
enclosing the following memorandum:

"(a) (i) At the 31st July 1989 all accumulated funds appearing in Branch Balance Sheets be transferred to the Head Office Administrative Fund.

(ii)   On transfer of Branch funds to the Head Office Administrative Fund all current liabilities and provisions appearing in Branch Balance Sheets at the 31st July 1989 become the responsibility of the Head Office Administrative Fund.

(iii)   In addition to current liabilities and provisions, the Head Office Administrative Fund be responsible for payment of Branch commitments for the Long Service Leave Fund, Guarantee Fund and Bereavement Grants Fund.

(iv)   As from the 1st August 1989 all Branch income from all sources be deposited in a Branch of the Commonwealth Bank for transfer to the Head Office Administrative Fund.

(v)   Each Branch to have the estimated operational expenditure for the period of two months transferred from the Head Office Administrative Fund to a Branch Account.

(vi)   At the end of each month each Branch forward to Head Office an audited account of the month's expenditure and be reimbursed the amount of expenditure from the Head Office Administrative Fund.

(i)   Fix the salary of its Branch

Secretary, District Secretaries,

Divisional Secretaries and Organisers.

(ii)   Determine the number of Organisers to be elected or employed.

(iii)    Purchase and sell freehold property.

(iv)    Lease property to tenants.

(v)    Rent property for use of the Branch.

(vi)   Do alterations and repairs t o property.

(vii)   Branches to forward building reports stating condition of all Union owned property.

(viii)   Set conditions of payment of superannuation, long service leave, annual leave, sick leave, etc. for officials and industrial and clerical staff.

(ix)   Determine number of industrial and clerical staff to meet Branch requirements and determine rate of salary to be paid.

(X) Determine number of motor vehicles

required and purchase and sell
vehicles.

(c) Branches shall have authority to determine the following v1 thout Executive Council authority:

(i)  Fixation of fees payable to auditors, Branch Returning Officers and Local Agents .

(ii) Determine travelling and other

expenses to be paid to members on the Branch Executive and any member or employee when deputed to transact business on behalf of the Union.

(iii)   Set expenses and fares for delegates attending Delegate Meetings.

(iv)   Purchase office equipment up to an amount of $10,000 annually."

By the circular letter, each Branch Secretary was
requested to go through the memorandum and provide comments on

each paragraph by 22 July 1988, so that the General Secretary

might prepare a report to be presented to the Executive

Council meeting to commence on 15 August 1988. By letter dated

26 July 1988, M R . . Boscacci, the Acting Secretary of the Queensland Branch of the AWU, provided on behalf of his Branch, a detailed response of some eight pages to the circular and accompanying memorandum of 5 July 1988. That letter included observations about the impact of specific aspects of the scheme espoused in the central funding memorandum and the reaction of the Queensland Branch to those aspects. Not all of Mr Boscaccirs comments were critical of some aspect of the scheme. For example, comments in respect of some particular aspects indicated that they raised "no problem" or "no real problem". Mr Boscacci's letter concluded with the following general comments:

"I make the following general comments and

recommendations:

1. There needs to be a general standardisation of

the way the financial accounts are prepared.

If there is to be a smooth consolidation of all

Branches, standardisation is essential.

2. The new federal body would need to keep
separate state and federal registration.

In Queensland, for example, a good deal of our property is still in the name of the State Registered Union (The Australian Workers' Union of Employees, Queensland).

To transfer this to the name of the federal body would cost hundreds of thousands of dollars in stamp duty and legal fees.

3. Each state will have their own particular problems. In Queensland, for example, we must comply with a law stating that any money spent for political reasons can only come from income from investments. It must not come from contributions for tickets. A statement to that effect appears in our financial statements.

4. I see the need for an equipment register for

each Branch.

5. Branches must be encouraged to live within

their means, i.e. their expenditure should not

exceed TICKET INCOME.

6. I strongly recommend that there should be a

meeting of all Branch Secretaries and their accounting staff in Sydney before any thing definite is decided.

Each state will have their own particular problems and these should be sorted out before any firm decisions on procedures are made.

To cut down on the expense of air fares, etc., perhaps this could be done when Executive Council meets in the week commencing Monday 15th August 1988.

All Branch Secretaries would be in Sydney and the only additional costs would be airfares for accounting staff.

Central Funding is a major change to the Australian Workers1 Union and I feel we should make every endeavour to discuss problems before firm policy decisions are made. This will make the transition a happy and smooth one."

On 18 August 1988, the Executive Council resolved, again unanimously, that:

"The General Secretary compile a document setting out those areas in which the Branches agree as to Central Funding and outlining those areas in which there is a difference of opinion and that he put proposals as to potential ways of overcoming the differences of opinion for the consideration of Branches and then for discussion at the meeting of the Executive Council programmed to be held during the week of 24 October 1988."

In accordance with that direction, the respondent, Hodder, as General Secretary of the AWU, prepared a report containing a summary of the responses which he had received from the Secretaries of the respective Branches. That report was received by the Executive Council at its meeting of 27

October 1988 at which it was resolved:

"That the General Secretary be authorised to engage an accountancy consultant with a view to having a professionally structured Central Funding hierarchical structure and administration methods developed for the consideration of the Executive

Council. "

In accordance with that resolution, the General Secretary commissioned an accountant, Mr R.K. Aitken, of Caloundra, to provide:

"An appropriate professionally structured Central Funding hierarchical structure and administrative methods for the consideration of the Executive Council of the Union."

The retainer of Mr Aitken was ratified by the Executive Council at a meeting on 23 November 1988, and he provided his report in the form of a letter dated 18 January 1989 to the General Secretary. In the meantime, however, the Queensland Branch Executive of the AWU had, at a meeting of 6 January 1989, unanimously carried the following resolutions:

"That the resolution of the Branch Executive meeting of February 16, 1988, concerning central funding, be re-committed.

That after further consideration of the concept of central funding, the Queensland Branch has strong reservations about its suitability to the Queensland Branch."

The effect of those resolutions was conveyed to a meeting of the Federal Executive Council on 24 January 1989 at which it was resolved:

"That the report received from Mr R. Aitken be forwarded to the Branches for consideration of the Branch Executives and that reports come back to the next meeting of the Executive Council. However, if any concerns are raised by Branch Executives about the matters upon which they need	further clarification, that these be directed to	the General Secretary for him to take up with Mr
Aitken to give appropriate responses to any such enquiries prior to the next meeting of the Executive Council. In particular, the Queensland Branch Executive peruse the document to see whether or not they can reconsider their position."

At its next meeting, the Executive Council, on 9 March 1989, resolved by forty-six votes to twenty-two that:

"In view of the attitude expressed by the New South Wales, Victoria, Tasmania, South Australia and West Australia Branches indicating their support for Central Funding, and t o complement amalgamation, that this Executive Council instructs the General Secretary t o prepare appropriate rule changes to create Central Funding within the Australian Workers' Union."

The matter of central funding was next raised at a meeting of the Executive Council on 10 April 1989, the minutes of which record that:

"The General Secretary read correspondence dated 6th April 1989 from the Queensland Branch Secretary, Mr W.P. Ludwig, advising that at a meeting of the Queensland Branch Executive held on 5th April 1989 it was resolved that after consideration of the Queensland Branch's position with regards to the amalgamation with the F.I.A.

and the problems associated with Central Funding for the Queensland Branch, that the Branch Secretary confirm their position with the F.I.A. and the General Secretary and investigate the

situation with a view of accommodating the Queensland Branch amalgamation process without Central Funding."

In the course of the same meeting, which occupied several days, the respondent, Hodder, "tabled" amendments to the rules of the AWU which he considered necessary to implement the concept of central funding. That document set out in order from Rule 16 to Rule 83 the amendments which were

central funding. The relevant entries in the minutes for 12	regarded as appropriate to give effect to the introduction of
April 1989 are:

"RULES AMENDMENTS:

The General Secretary then tabled two documents regarding amendments to rules, one being amendments to Rules 91 and 92 in connection with Agreements with State Registered Unions and the other being rules that would have to be changed to cater for Central Funding.

Moved:  Keenan That the documents be received.

Seconded: Lake

CARRIED

Moved:	Hodder	That these matters be deferred for
Seconded:	Lake	consideration at the next meeting of Executive Councll.

CARRIED"

At its next meeting which commenced on 10 May 1989, the Executive Council apparently received correspondence from the applicant in his capacity as Queensland Branch Secretary confirming the opposition of that Branch to the proposed introduction of central funding. It was thereupon resolved, on 11 May 1989, that:

"That the General Secretary prepare a draft resolution for consideration of the Executive Council regarding Central Funding and the Queensland Branch representatives make contact with the Queensland Branch Executive and the Executive of the Australian Workers' Union of Employees, Queensland for them to be made aware of the proposals that are being considered by the Executive as to a compromise position as to Central Funding because of the legal complications of Central Funding in totality in Queensland.''

It was then resolved that "we now adjourn until 2 p.m.

to commence preparation of the draft proposal regarding

direction contained in the earlier resolution, the respondent, central funding and the Queensland Branch". In response to the Hodder, prepared a three-page document which was in these terms:

"This Executive Council, after considering the matters placed before it as to the Queensland Branch position on Central Funding and the concerns expressed as to the potential legal implications, resolves as follows:

A.

The Queensland Branch will participate in Central Funding insofar as all monies received by way of membership dues from those persons eligible to be members of the Queensland Branch of The Australian Workers' Union on the following basis:

1.	All property and funds of the Union shall vest in The Australian Workerst Union, directly without the intervention of Trustees.
2.	Banking and Withdrawal -

(a)	All moneys received by the National Office shall be paid to the credit of the Union on current account with such bank as may be determined from time to time by the National Executive.
(b)	No funds shall be drawn from the bank except by cheque signed by two fulltime National officers.
(c)	All moneys, books and property held by any Branch Executive, Branch, District, or Sub-Branch or officer or member of the Union for or on behalf of the Union or any Branch Executive, Branch District, or Sub-Branch thereof, shall be absolutely vested in the Union and any such Branch Executive, Branch, District, Sub-Branch, officer or member, shall be liable to account to the National Executive for the proper use thereof and in the event of any such Branch Executive, Branch, District or Sub-Branch being closed or such officer or member being expelled or suspended or removed from office, it or he shall on demand deliver any such money, books and/or property to the National
Executive or any officer authorised by
the National Executive to receive the same, anything in these rules contained to the contrary notwithstanding.

3.  Ordinary and Extraordinary Expenditure -

(a) Funds may be disbursed for ordinary purposes by such officer or officers as National Executive may authorise in that behalf and subject to such limitations as National Executive may impose.

(b) Funds may be disbursed for extraordinary purposes under the authority of a resolution of National Conference or National Executive.

\

4. Investment of Funds -

The funds of the Union shall be invested wherever possible in the name of the Union.

5. Control of Property Held in the Name of the Organisation

The National Executive shall have control of all property of the Union.

6. Each Branch Secretary shall deposit all moneys received on behalf of the Union with the Branch of the relevant bank nearest to the Branch Office for transmission by the bank, to the credit of the Union at the Head Office, or such Branch of the bank as the National Executive may from time to time direct. He shall obtain a receipt for each such deposit. All moneys shall be so deposited forthwith after receipt, and without any deduction other than delegate's commission. Each Branch Secretary shall remit to the National Secretary at least once in every month a statement of all moneys received by the Branch on behalf of the Union and a statement of all expenditure incurred by the Branch.

7. The disbursement of funds for ordinary purposes shall be made by an officer or officers authorised in that behalf by the Branch Executive and subject to such limitations as it may impose, or by the Branch Executive.

8. The disbursement of funds for extraordinary purposes shall be made only under the authority of a resolution of the National Conference or National Executive. All deposit receipt, invoices, vouchers, receipts and other financial records shall

Branch Office unless and until otherwise be kept by the Branch Secretary in the

directed by National Conference or National Executive, and shall be produced on demand to the National auditor, Branch auditor, National Secretary or any person authorised in writing by the National Secretary.

B. Monies received by way of membership dues from persons who are members of The Australian Workers' Union of Employees, Queensland only, but not members of The Australian Workers' Union Queensland Branch, along with any monies derived from property held in the name of The Australian Workers' Union of Employees, Queensland, shall be retained by The Australian Workers' Union of Employees, Queensland and

shall not be subject to the Rules governing Central Funding until any legal problems regarding this matter are resolved.

Further that the General Secretary in co- operation with the Queensland Branch Secretary obtain appropriate accountancy and auditing advice as to an equitable way by which the Queensland Branch will be reimbursed from monies paid to the Organisation and the countervailing costs of administration relating to the day to day running of The Australian Workers' Union of Employees, Queensland."

The minutes of the afternoon session of the meeting of the Executive Council on 11 May 1989 contain the following relevant entries:

"CENTRAL FUNDING :

The General Secretary then tabled a draft proposal he had prepared to assist the Queensland Branch with the difficulties it was having with going to Central Funding.

Moved:	Hodder	That the draft proposal in
Seconded:	Butler	connection with Central Funding and the problems associated with the Queensland Branch be received.

CARRIED

Moved:  Hodder That the draft proposal be

Seconded:  Kernohan forwarded to Executives of The

Australian Workers' Union Queensland
Branch and The Australian Workers'
Union of Employees, Queensland, for

their consideration and advices to

the Executive Council as soon as

possible.

CARRIED UNANIMOUSLY

Moved :	Bodder	That it be noted that the draft
Seconded:	Keenan	rules considered on the 10th May
1989 plus those matters which
require further discussion with the F.I.A. be converted into a consolidated document as soon as possible and that any matters we required to raise with the F.I.A. be raised as soon as possible, subject to further consideration and possible amendment to the Central
Funding Rules following upon advice from the Queensland Branch.

CARRIED"

On the next day, 12 May 1989, the matter of central funding was again discussed, as revealed by this entry in the minutes for that day:

"CENTRAL FUNDING RULES:

The General Secretary then drew attention of members of the Executive Council to the draft proposal he had circulated at the previous meeting in connection with alterations to the Rules regarding Central Funding and he advised that he intended to now move the Rules changes.

Moved :  Keenan That the General Secretary's report

Seconded : Kernohan (be received).

CARRIED

Moved:	Ludwig	That the matter of Central Funding
Seconded :	Boscacci	Rules changes be deferred until the next meeting of the Executive Council to be held on the 13th June 1989.

CARRIED UNANIMOUSLY"

The next meeting of the Executive Council occurred on 16
June 1989. At that meeting, the respondent, Hodder, submitted

a form of resolution which involved the adoption of the text

of proposed amendments to varlous rules from Rule 16 to Rule

83. The resolution concluded by reciting:

"Further, that the General Secretary be authorised to submit the above Rules amendments to the Industrial Registrar for certification."

The resolution embodied, essentially, the same amendments to the same rules as were set out in the document tabled by Mr Hodder at the meeting of the Executive Council on

1 0 April 1 9 8 9 . However, the text of the two documents differed

in that the earlier "Central Fundlng Rules' Changes" contained explanatory matter and the full text of some rules in the form in which they would be after the proposed amendment.

The resolution of 1 6 June 1 9 8 9 was carried by sixty votes to eight with certain minor amendments being agreed to in the course of the meeting and noted in handwriting on a copy of a typewritten draft. The relevant entry in the Executive Council minutes recites:

"That as Convention is not sitting, this Executive Council deems it necessary and expedient to amend the Rules of The Australian Workers' Union to cater for Central Funding, in the following manner, such amendments to have effect as from the 1st August 1989 and for the total transition of funds to be completed and operative from the 1st July 1990.*l

Then followed the text of amendments as adopted to Rules and 83 . Those amendments, other than that to Rule 63, were certified by the Industrial Registrar on 9 August 1 9 8 9 . In the meantime, the applicant had obtained from Spender J., on 1 7 July 1 9 8 9 , a rule nisi calling on the respondents to show

cause why the following relief should not be granted:

"1. An order giving directions for the performance and observance and continued observance and performance of the Rules of the second respondent, and in particular of Rules 16, 17,

24, 36, 44, 54, 55, 56, 59, 60 to 66

(inclusive) and 83, in the form adopted by the second respondent to take effect from 1st August, 1989 without regard to the purported amendment of those Rules pursuant to a resolution of the Executive Council of the second respondent of 19th June, 1989;

2.    A declaration that the resolution of the

Executive Council of The Australian Workers' Union passed on the 19th day of June 1989 purporting to amend the Rules of that Union was irregular and void ab initio;

3. A declaration that the Rules of that Union as in force prior to the purported amendments by the said resolution are the current Rules of that Union;

4. In the alternative a declaration that the Rules as amended, by reason of those amendments, would contravene s.196 of the Industrial Relations Act 1988;"

The rule to show cause is based on s.209 of the Industrial Relations Act which enables a member of an organisation to apply to the Court for an order giving directions for the performance or observance of any of the rules of the organisation by any person who is under an obligation to perform or observe those rules.

In support of the rule to show cause the applicant has contended first that a resolution like that of 16 June 1989 purporting to alter the rules of the AWU could not validly have been carried unless proper notice of motion had first been given in accordance with Rule 29 of the rules of the AWU. That Rule is headed "RULES OF DEBATE" and, so far as is

relevant, provides: 

'The following rules of debate shall be observed at all meetings held in connection with the Union, whether Convention, Council, Branch Executive, Delegate Meeting, or General Meetings of members:

Any member desirous of bringing on any business shall give written notice, and shall read it aloud. This notice shall state the day the member proposes to move such motion, and the member shall hand a copy to the Secretary. No notice entered on the business paper shall be proceeded with unless the member who is giving such notice, or someone authorised by the member, be present when the business is called to order. Notices not so proceeded with shall be struck out. Note: Notices of motion shall be required only for the purpose of rescinding or altering Rules or By-laws, or some previous resolution involving any departure from the usual routine of business."

It was not disputed that, where the rules of an organisation specify procedures which are to be followed in making amendments to those rules, there must be strict compliance with those procedures. See e.g. Roots v Mutton (1978) 32 F.L.R. 15 and Morris v Federated Liquor and Allied Industries Employeesf Union of Australia (1978) 35 F.L.R. 60 at 64.

Mr Gotterson Q.C., who appeared with Mr Clarke for the applicant, contended that Rule 29, in its application to meetings of the Executive Councll, required a notice to members of the Executive Council in sufficient time before the meeting to allow proper deliberation on the proposed rule change. He referred to Re Moorgate Mercantile Holdings Ltd [l9801 1 All E.R. 40 where a discrepancy between a notice of a proposed special resolution for the cancellation of the share	premium account of the company, and the actual resolution for	the reduction of the share premium account to £321.17, was
held to invalidate the resolution.
On behalf of the respondents, it was contended that notice of motion in respect of the rule amendments related to central funding was given to members of the Executive Council at its meeting on 12 April 1989 when the first respondent, as General Secretary, "tabled" the document described at p.9 of
these reasons, and moved that "these matters be deferred for consideration at the next meeting of the Executive Council". Mr Gotterson, on the other hand, argued that those events did not amount to notice of motion as required by Rule 29 because there was no evidence that the document "tabled" by Mr Hodder on 12 April was circulated to members of the Executive Council.
The primary repository of power to amend the rules of the AWU is its Convention. By Rule 30 it is provided:

"The Convention shall be held annually and shall commence no later than 14th February each year except in the calendar year immediately following each ordinary election of Executive Officers when the Convention shall commence no later than 31 January and shall be constituted as

follows	:
(a)	The President and General Secretary of the Union, neither of whom shall have a deliberative vote but the President or Chairperson shall have a casting vote.
(b)	Delegates elected by the various Branches.

(i)  Each Branch shall be entitled to one delegate for any number of members up to 4,000 and an

additional delegate for every

further 4,000 members or part
thereof.

(ii)  Branches shall be entitled t o delegates in addition to those in paragraph (1) hereof by determining the total amount of part payments received by the Branches in accordance with Rules 10, 11 and 12, as shown in the Balance Sheet of the previous July, being divided by the annual contribution in Rule 10 in that financial year for members receiving adult rates of Pay

(iii)  The number of delegates for each Branch determined in paragraph (ii) then shall be added to those as determined in paragraph (i) to determine the total number of delegates each Branch is entitled to in accordance with the scale in paragraph (i) of one delegate for each 4,000 members or part thereof.

(c)	Where any Delegate to Convention is unable to attend the Convention, the Executive of the Branch by which such Delegate was elected, shall have power to appoint some other member of the Union who qualifies for election in accordance with Rule 68 to represent that Branch as a Delegate to the Convention.
(d)	The expenses of each Delegate shall be paid by Head Office."

The powers of Convention are set out in Rule 31 which provides, amongst other things, that:

"The Convention shall be the highest deliberative body of the Union and shall have power:

(a) To decide and direct the policy of the Union in matters affecting the interests of the members in all industrial, political and municipal concerns.

(b) To make, amend or rescind Rules and to hear any appeal from a decision of the Executive Council or Branch Executive."

machinery for the submission to Convention of proposals

including those for the amendment of rules is contained in
Rule 33 which is in these terms:

"(a) Proposals for:

(i)    the making of new Rules;

(ii)   the amendment or rescission of existing Rules;

(iii) Industrial, Administrative or

policy matters,

shall be forwarded t o the General Secretary and received not later than 1st December in each year. Proposals forwarded by telex or facsimile shall be accepted provided the contents of such telex or facsimile are confirmed by signed letter posted by pre-paid post to the General Secretary within a reasonable time after the date of the telex or facsimile.

(b) Such proposals may be submitted by:

(i) The Executive Council.

(ii) A Branch Executive.

(iii)   Any Branch General Meeting or Branch Delegate Meeting.

(iv)   Any Local or Section Committee duly constituted.

(V) Any properly called meeting of members wherever held consisting of not less than 15 members who qualify in accordance with sub-clause (c), (d) or (e) of Rule

89, Definitions.

(vi) The President, Vice-Presidents or
General Secretary.

All proposals passed at meetings of members, wherever held, under this Rule must stipulate the name of the place at which the meeting was held, the date of the meeting, and must be signed by the Chairperson.

(c)	Any proposals not containing irrelevant or improper matter shall without undue
delay be published in The Australian Worker. Should any proposal contain

irrelevant or improper matter, the General Secretary may omit such matter and cause the remainder only to be published in The Australian Worker but shall in such cases preserve the original documents for the inspection of Convention.

(d) As soon as practicable after the 1st of December, the whole of the proposals shall be arranged and printed on the Convention business paper and shall be forwarded to the Branches."

When Convention is not sittlng certain of its powers are

exercisable by the Executive Council in accordance wlth Rule

36 which, so far as is relevant to the present issues,

provides:

"(a) The general management of the affairs of the Union, subject to the direction of Convention, shall be vested in the Executive Council, and at any meeting of such Executive Council at least half of the total members of the Executive Council shall form a quorum, providing members of the Executive Council from at least three Branches are present and the accumulated vote of those in attendance is at least half of those allocated to Branches in accordance with Rule 35.

The Executive Council shall meet t o transact business when required so to do by any two of the Executive Officers, providing all members are notified to attend.

(b) The Executive Council, when Convention is not sitting, shall have power:

(1) to suspend the policy laid down by Convention or any portion thereof;

(2) to make such rules and other provisions or to rescind or vary existing Rules;

(3) to impose levies upon members and

Branches ;

(4) to fix salaries for Executive

Officers;

(5) to give approval to Branch Executives to fix the salaries of

Branch Secretaries, District

Secretaries, Divisional Secretaries and organisers. Provided that such approval shall only be given by the Executive Council in session.

Provided that all acts done by virtue of paragraphs 1, 2 and 3 of this section (b) must be affirmed by no less than two thirds of the total number of votes allocated to members of the Executive Council or it shall have no effect.

(i)   Subject to the foregoing the Executive Council may by writing signed by them exercise all the powers of the Executive Council hereinbefore set out provided no less than two-thirds of the members of the Executive Council vote and further provided that more than half the votes allocated to the whole membership of the Executive Council are in favour of such resolution (except that the majority required to exercise the powers conferred in sub-rules (i), (ii) and (iii) of Rule 36(a) shall be as set out in the proviso to that Rule) otherwise the resolution shall not be carried but may be referred to the next Convention or Executive Council meeting for consideration."

The constitution of the Executive Council is ordained by Rule 34 which provides that it shall consist of a President, one Vice-President from each Branch, a General-Secretary and one Councillor from each Branch. It is further provided by the same rule that the President shall have a casting vote only at meetings of the Executive Council, but shall have a deliberative vote on all questions submitted to the members of the Executive Council in writing under Clause ( 1 ) of Rule 36. The General Secretary, pursuant to Rule 34 has the right to speak and vote at meetings of the Executive Council. A proportional or "weighted" voting system is made applicable to

the Executive Council by Rule 35 which stipulates:

"(a) The method of voting on all matters before the Executive Council shall be a 'card vote'.

(b) (i) Each Branch shall be allocated two votes for each 4,000 members or part thereof, as determined at 31st July in each financial year.

(ii)   Branches shall be entitled to additional votes t o those in paragraph (i) hereof by determining the total amount of part payments received by the

Branches in accordance with Rules 10, 11 and 12, as shown in the Balance Sheet of the previous July, being divided by the annual contribution in Rule 10 in that financial year for members receiving adult rates of pay.

(iii)   The number of votes for each Branch determined in paragraph (ii) then shall be added to those as determined by paragraph (i) to determine the total number of votes each Branch is entitled to in accordance with the scale in (i) of two votes for each 4,000 members or part thereof.

(iv)   Provided that persons not eligible under Rule 6 shall not be included on the Roll for the purpose of establishing Branch votes.

(v)   Branch votes shall be evenly allocated to the Branch Councillor

and Vice-President representing

the Branch or their respective proxies as appointed in accordance with these Rules.

(C) The General Secretary shall be allocated one-twelfth of the total of Branches' allocated votes as determined by foregoing criteria. In the event that a Vice-President is Chairing a meeting of the Executive Council the Vice-President shall be entitled to vote in accordance with the allotment of votes to the Vice-Presidential position.

(d)	To establish the quota representing the vote of the General Secretary on the
Executive Council Branch representation basis of proportional representation, the

in each financial year as determined above shall be divided by 12 to establish the voting factor and the resulting figure if not a whole number be rounded up to the next whole number.

(e) The President shall have one casting vote where the vote is equal and shall have one vote where a vote is taken of the Executive Council under Rule 36(i) of these Rules."

Power to convene meetings of Convention and the Executive Council is conferred on the President by Rule 38.

In my view, the requirements set out in Rule 29, conformably with the internal references to them which that Rule contains, are true "rules of debate". As such, they can be suspended or modified as the exigencies of a particular meeting may require. Accordingly, the rules of debate in Rule

29 must be read subject to, and not as displacing or

modifying, the specific procedural requirements which later rules like Rule 33 and 36 impose on the conduct of meetings of organs of government of the AWU including Convention and the Executive Council.

The "note" wlth which Rule 29 concludes does not introduce an added or overriding procedural requirement for the rescission or alteration of rules. Rather, it merely draws attention to the different procedure, which is specifically laid down by Rule 33(a), to be followed if the rescission or alteration is to be considered by Convention, or is implicitly ordained by Rule 36(a) to be followed if the proposed

Council. rescission or alteration is committed to the Executive I consider that, as illuminated by the "note" to Rule

29, the requirement for notice of motion to be given before

the Executive Council can rescind or vary existlng rules can be satisfied by all members of the Executive Council being given sufficient notice of the substance of the proposed rescission or variation and the date and time of the meeting

at which it is to be moved. The sufficiency of the notice will depend on what is necessary to enable Executive Councillors properly to consider the proposal and, if appropriate, to consult with their respective Branches, before determining whether to vote for or against it. I do not consider that it is a necessary implication from Rule 36(a), read in conjunction with the note to Rule 29, that the notice must always be in writing. However, it will be obvious from the formulation of the test just suggested that notice of a lengthy or complex rescission or variation will not suffice if it is conveyed to Executive Councillors only by word of mouth.

It is unclear from the evidence whether each member of the Executive Council was given a copy of the document containing proposed rule amendments when it was "tabled" by Mr Hodder at the meeting on 12 April 1989. Mr Ludwig's recollection was that he did not receive a copy then. Mr Hodder, on the other hand, believed that in accordance with normal practice sufficient copies were made to provide one to each Councillor and that they were distributed to those in attendance at the meeting on 12 Aprll. No evidence directed to

other Executive Councillor from the Queensland Branch. The

this or any other issue was adduced from Mr Boscacci, the

inference which I draw from all of the circumstances is that copies of the text of the proposed rule amendments, if not actually distributed to all Executive Councillors on 12 April, were available to be collected by them and taken from the meeting. In drawing that inference I have taken account, particularly of the statement in the minutes of the meeting of 12 May 1989, that "the General Secretary then drew attention

of members of the Executive Council to the draft proposal he had circulated at the previous meeting". It is also significant that shortly after that statement, Messrs Ludwig and Boscaccl from the Queensland Branch respectively moved and seconded the deferral to the next meeting of "the matter of Central Funding Rules changes" without any complaint that they or the Queensland Branch had not received copies of the proposed rule changes.

I conclude that by tabling the text of the proposed rule changes, making copies of it available to all Executive Councillors and moving that the matters to which the document was related be deferred for consideration at the next meeting of the Executive Council, Mr Hodder gave sufficient notice of motion for the adoption of those changes to satisfy the requirements of the note to Rule 29 and of Rule 36(a).

It was also contended on behalf of the applicant that if the text of the proposed rule change tabled on 12 April 1989 could be regarded as having been incorporated in a sufficient notice of motion, there had been a significant discrepancy

between that document and the amendments which were ultimately

adopted on 16 June 1989. The text of the document tabled on 12

April 1989 contained a proposal that Rule 59(a) should be amended to read as follows:

"(a) Subject to Rule 56 all funds of the Union held by any Branch shall be banked in the name of The Australian Workers1 Union. Any funds held by the Branches for the purposes of financing their day to day administration costs shall also be banked in the name of The Australian Workers' Union and these funds shall not be withdrawn from the bank except by cheque signed by the Branch Secretary and countersigned by the President or Vice- President.

Such funds shall be administered by a finance commit tee consisting of the General Secretary, the Federal President and the Branch Secretaries who shall meet when it is deemed necessary and appropriate by the General Secretary and the Federal President."

The minutes of the meeting of 16 June 1989 reveal that the resolution carried on that day resulted in Rule 59(a) being amended to read in a way which conformed with the text of the document tabled on 12 April except for the words from and including "necessary and appropriate" which became in the amendment as adopted: "necessary and appropriate so to do, by any two members of the Finance Committee providing all members are notified to attend".

I can discern nothing in the rules of the AWU which requires that there cannot be any discrepancy at all between the text of a proposed rule change of whlch notice has been given and the text of the amendment as actually adopted by the Executive Council. Indeed, on the view which I take of the rules it is not mandatory for the notlce of a proposed rule

change to reproduce its text.

In Boland v Munro (1980) 48 F.L.R. 66 the requirements for amendment of the rules of the Federated Liquor and Allied Industries Employees' Union of Australia were more stringently expressed than those to be gleaned from Rules 29 and 36(a) of the AWU. The relevant rule in Boland v Munro was r.39 which included these sub-rules:

"2. Any proposed new rule or alteration, amendment or rescinding shall be endorsed by a branch meeting and the secretary of such branch shall notify the general secretary in writing at least six weeks before a council meeting of the proposed alteration.

3.   The general secretary shall forward the proposed alteration to each branch at least one month prior to the meeting of the council at which the proposed new rule or rules or alterations, amendments or rescinding of rules are to be discussed. The branch secretary shall submit such proposed alteration to a branch meeting prior to the council meeting."

Nevertheless, a Full Court of this Court held that it

was open to the council to make textual amendments to a

proposed new rule or alteration which had been endorsed by a branch in accordance with sub-rule (2). In a joint judgment Evatt and Northrop JJ observed, at 74:

I'It is sufficient to say that on the facts of this case, the alterations to the rules made by the federal council are within the scope of or are incidental to the proposed new rule or alteration endorsed by the meetings of the Victoria branch and the Queensland branch respectively and circulated to all branches. The amendment to the proposed new rule endorsed by the Victoria branch meeting comes within the geniral principle of law enunciated in Halsburyrs Laws of England (4th ed.), vol. 7, par. 589: 'Amendments to Resolutions - Any amendment fairly arising on a resolution which is specified in the notice of meeting and within the scope of the notice may be proposed and passed at the meeting, and a chairman has no right to refuse to put such an amendment. ' See also vol. 9, par. 1305

and Daly v. Gallagher [l9251 Q.S.R. 1."

To similar effect, Keely J concluded, at 86:

"In my view r.39 is intended to ensure that the federal council does not alter, amend or rescind 'any of the rules for the time being of the union' or add any new rules unless the proposal that it should do so has been 'endorsed by a branch meeting' and the proposal has been forwarded 'to each branch at least one month prior to the meeting' of the federal council at which the proposal is to be discussed. The purpose of the provision i S to ensure that proposals for

alterations to the rules will be known to each branch for a sufficient time to enable them to be considered by the membership in the branches before the question of alteration is declded upon by federal council. In my opinion that purpose would not be defeated by an alteration by the federal council of the proposal so long as the nature of the proposal is not affected (see Joske, The Law and Procedure at Meetings (5th ed.), p.44).

It does not follow that the federal council is empowered to amend in any way it sees fit a proposal endorsed by a branch meeting. However, the federal council is not limited to the precise terms of the proposal endorsed by the branch meeting provided that the wording of the new rule or alteration, amendment or rescission of an existing rule decided upon by the federal council may fairly be said to have been 'proposed . . . by a branch meeting' (and provided that it has been forwarded at the appropriate time to each branch). In determining whether an alteration of the rules by council has been 'proposed . .. by a branch meeting1 regard must be had to the purpose of the rule to which I have referred. I am satisfied that r.39 was complied with in this matter."

Taking the same approach, I am led to conclude that the change introduced on 16 June 1989 to expand the class of persons who could call a meeting of the Finance Committee from the General Secretary and the Federal President to any two members of that Committee was within the scope of, or incidental to, the rule changes proposed in the document tabled on 12 April. Accordingly, the incorporation of that

carried by the Executive Council on 16 June.	change did not invalidate wholly or in part the resolution
It was next argued on behalf of the applicant that, on its proper construction, Rule 36(b)(2) did not authorise the Executive Council to amend the rules of the AWU in such a way as to effect a "fundamental alteration to the structure of the Union". The adoption of the "central funding rules", so it was contended, had that effect.

This contention of the applicant was founded on an observation of Pincus J. in Hodder v Australian Workers' Union (1985) 9 F.C.R. 498. In discussing the same rule, his Honour suggested, at 504, that:

"An exception to the universal rule-making power of the Executive is that, in my opinion, it cannot make rules fundamentally altering the structure of the union, for example by abolishing the Convention. I derive this by implication from the statement, referred to above, in r 38 that the Convention 'shall be the highest deliberative body of the Union' and from an implication in the opening words of r 39(b). It is not necessary to explore the scope of this implicit exception, for the purposes of these reasons, and I mention it merely for the sake of completeness. If I am wrong in thinking that the Executive cannot make a change in the rules such as to destroy or gravely weaken the position of the Convention, then my ultimate conclusion in the case is not vitiated - indeed, it is strengthened. It is undesirable that I attempt finally to determine the ambit of the Executive's power over the rules, although the existence of that power is most important in determination of the case, because the point was hardly touched on in argument."

(Rules 38 and 39(b) discussed by his Honour corresponded

respectively with Rules 31 and 36(b) set out above.)

The first indication, it was said, of how the central structure of the AWU was the repeal of Rule 54(a) which	funding amendments effected a fundamental alteration to the
provided:

"Each Branch of the Union shall contribute towards the maintenance of Head Office such sum as determined by the annual Convention. The maintenance contribution shall be paid monthly in

advance. "

Secondly, an amendment to Rule 64 abolished the division between property and funds "held for the use of Head Office" which had been placed under the control of the Executive Council and property and funds "held for the use of any branch" which had been under the control of the relevant Branch Executive "subject to the direction and over-riding authority of the Executive Council or Convention". As amended, Rule 64 places all property and funds "held for the use of the Union", including specified parcels of real estate, under the control of the Executive Council which may "borrow money and sell, mortgage or exchange any real or personal property held as aforesaid and give a valid discharge for any moneys raised on mortgage or otherwise". The combined effect of these amendments, it was contended, was to bring them within the category of rule changes of which Beaumont J. said in his dissenting judgment in Imlach v Daley (1985) 7 F.C.R. 457 at 480:

"To put the matter another way, in the language of the club cases, the alteration will be beyond power if it is incompatible with the fundamental objects of the organisation (see Halsbury's Laws of England (4th ed, Vol 6) par 222 at 65; Lloyd, The Law Relating to Unincorporated Associations at 102-103; Hole v Garnsey [l9301 AC 472 per Lord

Commissioner of Taxation (1932) 47 CLR 621 per	Atkin at 496; Metropolitan Gas Company v Federal
Rich .l at 635; cf Pinlayson v Carr [l9781 1 NSWLR
657). In short, even if the alteration be within the literal power to alter the Rules, the Rules on their true construction should be read down so that the power is not used for the ulterior purpose of destroying or debilitating a fundamental element of the Federation."

The structure erected by the rules of the AWU makes
Convention the paramount policy and rule making body within
the organisation. However, it is provided that Convention

shall meet only once a year and that when it is not sittlng its powers are exercisable by the Executive Council which is entrusted with the general management of the affalrs of the Union "subject to the direction of Convention". Accordingly, to place the funds and property of the Union under the immediate control of the Executive Council, instead of having them in the primary control of the respective Branch Executives subject to the direction and over-riding control of the Executive Council - or Convention", is not in a practical sense a significant dilution of the power of Convention.

It must be remembered that the "central funding rule changes" do not in terms impinge at all on Rule 31 which is the main source of the powers of Convention. The power of Convention when sittlng to make, amend or rescind rules (including the "central funding rules" themselves) is not diminished in any way. It is true that the power of Convention to fix the amount of contributions (to be paid by Branches towards the maintenance of Head Office) has been deprived of any scope for exercise by the repeal of Rule 54 and by the provisions of the new Rules 56 and 59. Those rule changes

effectively vest all income in the Executive Council under the	administration of a finance committee save for a portion held
by the Branches "for the purposes of financing thelr day to day administration costs". However, in the context in which it has occurred, the elimination of the need for Convention to fix those contributions reflects only the transfer from the Branch Executives to the Executive Council of primary control over the investment and expenditure of the bulk of Union income which, I infer, will contlnue to be collected by Branch
officials in the form of membership contributions. I do not 'regard that change as abolishing or significantly weakening the paramount position which the Convention is intended by the structure of the rules as a whole to occupy.
A related argument advanced on behalf of the applicant was that if r.36(b)(2) on its proper construction permitted the paramount position of the Convention in relation to the Executive Council to be overturned, then r.36(b)(2) itself contravened s.196(a) of the Act by permitting amendment of the rules in a way inimical to the objects of democratic control of the organisation and the participation of its members in its affairs which are enshrined in s.3(g). Specifically, it was said that, if such a construction of r.36(b)(2) were open, the rules as a whole would not provide for control of a committee of the AWU (the Executive Council) by the members of the organisation as required by s.l95(l)(b)(iv) of the ~ c t . In support of this argument reference was made to the statement of principle distilled by Bowen C.J. in Wright v McLeod (1983) 74 F.L.R. 146 at pp 152-153 and by Evatt and Northrop JJ. at 182.
The short answer to this argument is provided by my conclusion that r.36(b)(2) on its proper construction does not permit the powers of Convention to be abolished or significantly debilitated. However, as I have just indicated, that does not preclude the Executive Council from making (subject to the control of Convention) any adjustment at all between the powers directly exercisable by it and those reposed in Convention itself. The Federal Executive, when

regard is had to its composition and the provisions of r.35 as to proportional voting, is almost a microcosm of Convention. I do not consider it to be significantly less amenable than Convention to control by the members of the AWU in the sense discussed by the Full Court in Wright v McLeod. Nor do its composition and procedures inhibit participation by members in its affairs to a greater degree than if those affairs are administered directly by the annual Convention.

Another limitation on the power of the Executive Council to rescind or vary existing rules which was sald to arise from the proper construction of r.36(b), was that any rescission or variation made pursuant to that rule could not operate beyond the next meeting of Convention after it had been made. I can find nothing in the language, or the context, of the rule which supports an implied limitation of that kind. Indeed, the presence in the proviso of an express condition precedent to the effectiveness of a relevant exercise power by the Executive Council, argues against the implication of any other condition precedent or subsequent. In addition, the limitation for which Mr Gotterson contended would requlre the complex

machinery in r.33 to be activated before each annual	Convention in order to continue the life of every rule change,
however minor, adopted by the Executive Councll during the preceding twelve months. The contrary construction, on the other hand, preserves to Convention the power to set aside or modify any amendment which has been introduced by Executive Council, and which Convention does not entirely approve.
The applicant's next attack on the Executive Councilrs resolution of 16 June 1989 invoked the earlier resolution of the Executive Council on 31 May 1988:

"That Executive Council commence procedures to establish a Central Funding system appropriate to the administration of a Federal Union. However, such system not be implemented until the Branches are satisfied with the style of such procedures."

The reference to "the Branches" in the rider to that resolution was said to mean "all the Branches". Since the Queensland Branch had never indicated that it was satisfied with the style of the procedures involved in the "central funding rules" the consequence, according to the argument, was that Executive Council could not adopt those rules wlthout rescinding or altering the previous resolution. That, by reason of the note to r.29, required a notice of motion, which was never given.

There are several ambigultles in the resolution of 31 May 1988 which make it difficult to construe it as glving any one Branch a right to veto a rule change directed to the implementation of central funding. However, even if such a

construction be given to that resolution, I do not consider,	for reasons already given in respect of the proposed rule
change adopted on 16 June 1989, that notice in writing was required before a resolution could be passed by the Executive Council which in effect rescinded or altered its previous resolution. Notice that the Executive Council might, if it thought fit, proceed with the adoption of central funding rule changes even over the opposition of the Queensland Branch was implicit in the resolution of 9 March 1989 which is reproduced
at p.9 of these reasons. That implied notice was given more specific content when, on 12 April 1989, the General Secretary "tabled" draft central funding rules, and moved that consideration of them be deferred to the next meeting.
The Queensland Branch must also have been further disabused of any notion that it retained some right of veto over a proposal to adopt central funding rules by the statement of the General Secretary on 12 May 1989 that he "intended to now move the Rule changes" which he had tabled in draft form on 12 April. As I have previously pointed out, there was lmplicit in the motlon of Messrs Ludwig and Boscaccl on 12 May that "the matter of Central Funding Rules changes be deferred until the next meeting of the Executive Council" an acceptance that the Council could then proceed to deal substantively with Mr Hodder's motion.
~t was also submitted on behalf of the applicant, in the context of the resolution of 31 May 1988, that the Executive Council had never purported to rescind or alter the rider to that resolution. I am far from clear that the earlier rider,
on its proper construction, precluded the later adoption of central funding rules if any one Branch were not satisfied
with the "style" of the procedures whlch they embodied. However, on the assumption that the rider should be construed in that way, I consider that it was capable of being revoked by implication provided that any requirements of the rules as to notice of a later, inconsistent, motion were satisfied, as

I have found they were in this case. In this regard, I adopt what Gray J. said in Johnson v Beitseen (unreported, 21 March

1989) where his Honour observed, at 56:

"Further, Renton, Guide for Meetings and Organisations, 4th ed., para. 434 Imports such a doctrine of implied repeal into the proceedings of

meetings. The is as follows:

'Generally speaking, a Chair should not accept a motion which is inconsistent with a resolution previously adopted. The existing resolution should first be formally rescinded. If, however, an inconsistent motion is passed, the original resolution becomes void t o the extent of the inconsistency (unless Rules in regard to notice or other technical requirements have not been complied with). This is called rescission by implication or rescission by inference.'

As a matter of logic, implied revocation must be possible. A body such as the committee of management cannot bind its successors. A clear decision, validly made by a meeting of the commit tee of management, must prevail over an earlier resolution, especially if made in ignorance of the earlier resolution. If the meeting is aware of the earlier resolution, but takes no action to revoke it expressly, questions may arise whether the later resolution was intended to prevail.''

The passing of the resolution of 16 June 1989 over the

dissent of Councillors representing the Queensland Branch was

the clearest implied revocation imaginable of the rider to the	resolution of 31 May 1988 if that was still operative at the
time of the later resolution.
By a variation of the "control" argument discussed at p.33 of these reasons, Counsel for the applicant contended that the "central funding amendments" adopted on 16 June 1989 removed the Executive Council from the real and effective control of Convention. As a result, it was said, the rules as a whole contravened s.196 of the Act by failing to provide, as required by s.l95(l)(b)(iv) for the control of a committee of the organisation by the members of the organisation. The major premise of this argument was that a critical element of control over the Executive Council was exercised by the members through a democratically representative Convention fixing each year the amount of contributions payable by Branches towards the maintenance of Head Office. When that power in Convention was removed by the repeal of r.54, control of Executive Council by the members of the organisation was, so the argument went, unacceptably diluted. In my view, the major premise of this argument has not been established. As Smithers J. said in wright v HcLeod (supra) at 161 of the predecessor of s.196 of the Act and the counterpart in the Conciliation and Arbitration Regulations of s.l95(l)(b)(iv) of the Act:

"Section 140 of the Act is concerned with what is enacted by the rules of the organisation looked at as a whole. It provides, not what any particular rule may not do or must do but what 'the rules' shall or shall not do or be. Clearly the section contemplates that in a case where the rules contravene the provisions of s.140(1) it may be possible to identify a particular rule or even a part thereof which itself contains the offending	provision see subss(5D) and (5G) of the Act. But	it is the existence of a contravention by the
rules as a whole which is the first critical consideration. Accordingly it is impossible to determine the validity of a rule which, in its own terms, confers an unfettered rule-making power without looking at the rules as a whole. And in relation to the current problem the provisions of reg. 115(l)(d)(v) are important. That regulation states in imperative tones that the rules shall provide for the control of committees of the organisation by the membership. Clearly if there be adequate control the fact that a particular body is empowered to make and amend rules would not offend s.l40(l)(c). Control as envisaged by the regulation is directed to the protection of the members against excess or abuse of authority by governing bodies. Such bodies may be controlled by imposing conditions precedent to the exercise of their powers or by conferring on members or groups of members the capacity to institute a review of, or set aside, their decisions. According to the principle as submitted to this Court no control is adequate unless it provides as a condition precedent to the amending or making of rules some degree of membership participation at least through their branches. But reg . 115(l)(d)(v) does not specify the type or degree of control required. It leaves these matters to the membership operating according t o the constitution or the *organisation. It does not specify that the control should operate manifestly through conditions precedent to action, or as remedies after action or otherwise."

Taking the same approach, I do not believe that the power conferred on Convention by the now repealed r.54 to fix contributions for the maintenance of Head Office was essential for these rules to provide for control of the Executive Council by the members of the AWU. As has been conceded, Convention meets for only two weeks of the year. Even before the repeal of r.54, if it found that the income made available to it by Convention's fixing of contributions was inadequate, the Executive Council could supplement that income by imposing a levy upon members or Branches pursuant to r.36(b)(3).

Moreover, as I have already observed, the Executive Council by reason of its composition exclusively of elected officials and

to a degree of control by the members of the AWU very similar	the proportional voting system enshrined in r.35, is subject
to that to which Convention itself is amenable. Finally on this aspect, the provision in the new r.59 for the central funds to be administered by a finance committee does not, in my view, weaken the indirect control which the members of the organisation have over its funds. The members of the finance committee are all elected officials and, by virtue of the new r.56(b), their administration of the central funds is subject
to the control of the Executive Council which is bound to see that the funds are applied for the benefit of members generally.
The second last attack mounted by the applicant was on the amendment which purported to delete the second paragraph of r.63. However, that amendment was not certlfled by the Industrial Registrar as required by s.205 of the Act. Consequently the amendment did not take effect, and, as Mr Hampson Q.C. who appeared with Mr Martin for the respondents conceded, r.63 remains in force in the form in which it was before the resolution of 16 June 1989.
AS his final ground of attack on the "central funding rules", the applicant invoked s.l96(c) of the Act which provides that the rules of an organisation "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 purpose of the registration of organisations under this Act, are oppressive, unreasonable or unjust".
To afford an understanding of how this attack is mounted, it is necessary to summarise the factual background against which operation will have to be given to the central funding rules as applicable in Queensland. The State Union has approximately 49,000 members of whom about 30,000 are also members of the AWU. The remaining 19,000 are ineligible for membership of the AWU because its rules specifying conditions of eligibility for membership are narrower than the

corresponding rules of the State Union. However, those 19,000 members pay membership contributions at the same rate as that fixed for membership of the AWU. A payment is made on their behalf to enable each of them to receive a copy of "The Worker", the official journal of the AWU, and to participate in a mortality fund conducted by the AWU. As well, a contribution is made out of membership dues collected from the 19,000 who are members only of the State Union to a fund maintained by the AWU to provide long service leave for employees who serve, without distinguishing between the two groups, members of the AWU and of the State Union.

About ninety per cent of the members of the Queensland Branch of the AWU are employed under awards made pursuant to the Industrial Conciliation and Arbitration Act 1961-1988 of the State of Queensland. The offlcers and employees who service those awards have to date been paid from the joint or mixed resources of the Queensland Branch and the State Unlon. Similarly, the same per caplta contribution has been made on behalf of the 19,000 members only of the State Union towards the maintenance of the Head Office of the AWU as that fixed by

Convention for actual members of the AWU pursuant to the

now-repealed r.54.

When filing its annual accounts as required by the Industrial Conciliation and Arbitration Act 1961-1988 (Qld), the State Union has traditionally prepared a consolidated document in which no attempt has been made to appropriate contribution income to the State Union and the Queensland Branch of the AWU. Nor does the balance sheet differentiate between the assets in Queensland which are the sole property of either the State Union or the AWU and those the title to which is legally or beneficially held lointly by the two entities.

Against this factual background, it is submitted that the "central funding rules", by placing the administration of the AWUts interest in jointly owned assets in Queensland in a financial committee under the control of the Executive Council, will create problems which will bear oppressively on the members, especially of the Queensland Branch. In particular, it is said that to comply with the requirements for continuing registration under, and participation in, the system of industrial regulation established under Queensland law which is the paramount concern of both members of the Queensland Branch of the AWU and members of the State Union, the latter will have to dissect the previously consolidated accounts and identify its interest in each item of lointly owned property.

It is true that the initial implementation of the work for officials and employees attached to Head Office and	"central funding rules" is likely to entail some additional
to the Queensland Branch of the AWU. Some inconvenience may also be occasioned to the Queensland Branch officials in their capacity as officers of the State Union. On the other hand, even if the "central funding rules" were not applicable, it seems to me that ss.272 and 273 of the Act would still require the AWU to dissect the Queensland consolidated accounts and to identify the separate interests of the AWU and the State Union in jointly-owned property. Moreover, the evldence suggests that some financial advantages and economies of scale may accrue to the AWU from the introduction of central funding.
Section 196(c) of the Act requires the Court to assess a claimed element of oppressiveness, unreasonableness or injustice in conditions, obligations or restrictions which are imposed on members of an organisation by its rules, in their capacity as such members. It is therefore not open to have regard to the way in which the rules of the organisation affect members in their capacity as members of some other body, or a fortiori affect non-members of the organisation. As well, the conclusion that the conditions, obligations or restrictions have one or other of the proscribed elements of oppressiveness, unreasonableness or injustice must be reached having regard to the objects of the Act, and the purpose of the registration of organisations under the Act.
This task of assessment cannot proceed from an assumption that powers conferred on the Executive Council or the finance committee by the rules of the AWU as amended will
be exercised in bad faith or otherwise than for the purpose for which the powers have been glven. For an analysis of how
committees of registered organisations are subject to an implied requirement to exercise their powers bona fide and not for any ulterlor purpose, see e.g. Allen v Townsend (1977) 31 F.L.R. 431 at 483-489 and Scott v Jess (1984) 3 F.C.R. 263. That implied requirement would probably be infringed if, for example, the Executive Council of the AWU were to decide to dispose of premises in which the Queensland Branch has its

maln office without maklng arrangements to provide the Queensland Branch with adequate and appropriate alternative accommodation. However, there is nothing in the evidence to suggest that the central funding rules have been adopted to weaken or destroy the Queensland Branch in that or any other way.

Accordingly, when viewed with the focus required by s.l96(c) as I have just analysed it, the rules of the AWU, as presently certified, do not, in the circumstances which now obtain, offend that sub-section.

For all of these reasons the rule nisi must be

discharged.

I certify that this and the preceding forty-three (43) pages are a true copy of the Reasons for Judgment of His Honour Mr Justlce Ryan.

Assoclate: L - . . ,.,,l

7

Date:  - 3 s p?9 ,L i r - I 5 C

Solicitors for Applicant	: Thompson, King and Partners
Counsel for Applicant	: Mr G.W. Gotterson, QC

Mr B.J. Clarke

Solicitors for Respondent : McInnes, Wilson & Jensen

Counsel for Respondent : Mr C.E. Hampson, QC

Mr G. Martin

. .

Date of Hearing : 21 September 1989

2 and 3 October 1989

Date of Judgment : 30 April 1990