Maguire, Frank v Chapman, A.G.

MAGUIRE v. FREND (1977) 32 FLR 160
Conciliation and Arbitration

COURT

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL DIVISION
Bowen C.J.(1), J.B. Sweeney(1) and Deane(1) JJ.

CATCHWORDS

Conciliation and Arbitration - Registered organizations - Amalgamation - Authority to sign scheme of amalgamation and application to Industrial Registrar - Rule providing for alteration of rules by two-thirds majority - Rule providing for dissolution by four-fifths majority - Rule altered to allow dissolution by two-thirds majority - Disposition of property of dissolving organization - Conciliation and Arbitration Act 1904-1976, s. 141, Pt VIIIA - Conciliation and Arbitration Regulations, regs. 146B, 146C.

HEADNOTE

A rule of an organization provided that any industrial agreement or any other document to be entered into on behalf of the organization shall be executed by the president or general secretary or such other person authorized by the executive.

Held: (1) Section 158D of the Conciliation and Arbitration Act 1904-1976 required the committee of management to "propose" the amalgamation and not to "enter into it". The proposal of the amalgamation was therefore not governed by the rule.

(2) Submission to the industrial registrar of a written scheme for amalgamation in accordance with s. 158F of the Act was not governed by that rule. The rule applied in respect of an industrial agreement or other document to be "entered into" on behalf of the organization and did not include the submission of a scheme of amalgamation.

A rule of an organization provided that its rules in force from time to time or any of them may be added to, altered or rescinded, by a two-thirds majority of financial members present at a meeting called for that purpose or (inter alia) for that purpose.

Another rule of the organization provided that, for the dissolution of the organization, the affirmative vote of four-fifths of the financial members shall be requisite, such vote to be passed at a special meeting called for that purpose. This rule was altered, by a two-thirds majority, to provide that upon amalgamation the organization would be dissolved. The effect of the amendment was to require a two-thirds majority of financial members actually present at a meeting, instead of a four-fifths majority of all financial members, to dissolve the organization.

Held, that the amended rule was valid and effective.

A clause of a proposed scheme of amalgamation provided that, upon cancellation of the registration of the de-registering organization it would dissolve itself, whereupon all its property and funds would be transferred to the amalgamated organization which would satisfy all liabilities, debts and obligations of the dissolved organization.

Section 158Q (2) (c) of the Act provides that the industrial registrar shall not fix the day on which the amalgamation is to take effect until he is satisfied as to the arrangements made for the property of the de-registering organization to become the property of, and for the liabilities of the de-registering organization to be satisfied by, the amalgamated organization. Although the provisions of s. 158Q (2) (c) of the Act made it unnecessary for the court to decide the question, it expressed the view that the effect of such a clause, where the de-registering organization had by ballot of its members given the statutory agreement necessary to its participation in the scheme, would be that, upon the amalgamation becoming effective and the organization being dissolved, the beneficial interest in the assets of the dissolved organization would automatically pass to the continuing organization.

Held, that it is for the industrial registrar, not the court, to be satisfied with such arrangements.

Obiter: (a) In the absence of either a provision in the rules of, or entitlement to, the assets of an organization upon dissolution, or any adverse claims, such assets would ordinarily be distributed among the members at the time of the dissolution. (b) There is no vesting or other provision in the Act or Regulations which would automatically transfer both legal and equitable title to all assets of a dissolved organization to the continuing organization.

HEARING

1977, October 11, 12, 24, 25, 28. #DATE 28:10:1977

RULE NISI.

A member of an organization registered under the Conciliation and Arbitration Act 1904-1976, sought orders under s. 141 of the Act against other members of the organization for the performance and observance of the rules of the organization. The material facts appear from the judgment.

J. L. Trew and F. V. Fletcher, for the claimant.

M. Cockburn, for certain respondents.

Cur. adv. vult.

Solicitors for the claimant: Harrington Maguire & Co.

Solicitors for certain of the respondents: J.W. Maund and Kelynack.

JUDGE1

October 28.

THE COURT delivered the following judgment.

The claimant is a member of the United Farmers and Woolgrowers' Industrial Association ("the United Farmers' Association") which is an organization registered under the provisions of the Conciliation and Arbitration Act 1904-1976 ("the Act"). The Graziers' Association of New South Wales ("the Graziers' Association") is also an organization registered under the provisions of the Act. The objectives and activities of the two organizations, to some extent, overlap and a scheme for their amalgamation pursuant to the provisions of Pt VIIIA of the Act has reached the stage where, subject to the matters involved in these proceedings, the industrial registrar is required to fix and notify in the Australian Government Gazette a day on which the planned amalgamation is to take effect. The scheme involves the continuation of the Graziers' Association under a new name (the "Livestock and Grain Producers' (Industrial) Association of New South Wales") and the de-registration and dissolution of the United Farmers' Association. A company associated with the United Farmers' Association (the United Farmers and Woolgrowers' Industrial Association of New South Wales) is involved in the proposed amalgamation. That company is not a registered organization under the Act and the procedural provisions of Pt VIIIA of the Act are not applicable in respect of it or its members. (at p162)

The steps involved in an amalgamation pursuant to the provisions of Pt VIIIA of the Act of two or more registered organizations are not uncomplicated and must, of their nature, involve the passage of a considerable period of time between the initial proposal of an amalgamation and its final achievement. The most important of these steps are: (1) The committee of management of each existing organization concerned in the amalgamation passes a resolution proposing amalgamation of the organization with the other existing organization or organizations concerned in the proposed amalgamation (s. 158D). (2) The existing organizations submit to the industrial registrar a scheme in writing for the amalgamation (which must comply with certain requirements and be accompanied by certain material) and the application by each such organization for the approval of the industrial registrar to the amalgamation (s. 158F). Regulation 146B (made under the Act) provides that the scheme in writing so submitted "shall be signed by two officers of each organization . . . submitting the scheme, being officers authorized to sign the scheme". (3) The industrial registrar, if satisfied that the relevant steps to that stage have been complied with, causes the publication, in the Australian Government Gazette, of a notice of the application together with a copy of the scheme submitted to him. This notice which must be in accordance with a prescribed form, calls for the lodging of objections to the proposed amalgamation with the industrial registrar (s. 158G). (4) The industrial registrar hears all "objections duly made to the amalgamation" (s. 158H). (5) After the time allowed for the making of objections (thirty-five days from the date of notification in the Australian Government Gazette) and after hearing any objections duly made, the industrial registrar (in some cases after having allowed the making of alterations to rules) decides whether to approve the submission of the proposed amalgamation to ballot of members of the existing organizations (s. 158J). (6) If the industrial registrar approves the submission of the scheme of the proposed amalgamation to ballot ((5) above) and subject to immaterial exceptions, a secret ballot of the members of each of the existing organizations concerned is organized by the industrial registrar. Involved in the ballot is the submission, to each member of the relevant organization, of a copy of the proposed scheme (s. 158J). (7) The necessary ballots are held (s. 158L). (8) If the amalgamation is to proceed, more than one-half of the members of each organization in respect of which a ballot is necessary must vote and, in the case of each organization, more than one-half of the members voting and recording formal votes must vote in favour of the proposed amalgamation (s. 158N). (9) In the event that any irregularities are alleged "in or in connection with" a ballot, this Court has jurisdiction to conduct an inquiry either before or subsequent to completion of the ballot and "if it finds that there has been an irregularity that may have affected, or may affect, the result of the ballot", order, in the case of an uncompleted ballot, that any steps in or in connection with the ballot be taken again or, in the case of a completed ballot, that a fresh ballot be conducted (s. 158P). (10) After the expiry of thirty days after declaration of the results of the ballot and disposal of any application to this Court under s. 158P (see (9) supra), the industrial registrar declares, if it be the case, that the amalgamation has been approved and, subject to certain specified conditions precedent, "shall, after consultation with the organizations concerned, forthwith fix, and notify in the Gazette, a day, not being less than two months after the date of notification, as the day on which the amalgamation is to take effect". For the purposes of these proceedings, the only relevant condition precedent is that contained in s. 158Q (2)(c), namely, that the industrial registrar is satisfied as to the arrangements made for property of the de-registering organization (i.e. the United Farmers' Association) to become the property of, and for liabilities of the de-registering organization to be satisfied by, the amalgamated organization (i.e. the Graziers' Association under its new name of the Livestock and Grain Producers' (Industrial) Association of New South Wales) (s. 158Q (1) and (2)). (11) On the day so fixed, the amalgamation becomes effective. In particular, the industrial registrar shall de-register any de-registering organization and the persons who, immediately before the day so fixed, were members of a de-registering organization become, by force of the Act and without payment of any entrance fee, members of the amalgamated organization. (at p163)
As has been said, the proposed amalgamation has reached the stage where, subject to the matters raised in these proceedings, the industrial registrar must fix and notify in the Gazette, the date upon which the amalgamation is to take effect. It is not disputed that the proposed amalgamation was submitted to a ballot of the members of each organization conducted by an Australian electoral officer pursuant to arrangements made by the industrial registrar. It is not disputed that, in the case of each organization, more than two-thirds of the members entitled to vote in the ballot actually voted. It is not disputed that, in the case of each organization, the overwhelming majority of those voting (in excess of ninety per cent) cast their votes in favour of the proposed amalgamation. No application has been made to this Court, pursuant to the provisions of s. 158P of the Act, alleging any irregularity in or in connection with either of the ballots. (at p164)
The claimant has, at all relevant times, been a vice-president of the United Farmers' Association. He has opposed the amalgamation, upon the terms proposed, of the two organizations both at general meetings and executive committee meetings of the association. He has been unsuccessful in persuading his fellow members of the executive committee and his fellow members of the United Farmers' Association to join him in his opposition to the amalgamation. He now seeks from this Court directions, pursuant to s. 141 of the Act, for performance and observance of rules of the United Farmers' Association ("the rules") which he claims have been or will be broken in the course of the proposed amalgamation. The respondents against whom those directions are sought are the members of the executive committee of that organization. The directions sought are: "(1) that the respondents (other than the United Farmers and Woolgrowers' Industrial Association of New South Wales) and each of them be directed to treat the joint submission to the industrial registrar by the Graziers' Association of New South Wales and the United Farmers and Woolgrowers' Industrial Association of New South Wales as having been submitted without the authority of the United Farmers and Woolgrowers' Industrial Association of New South Wales; (2) that the respondents (other than the United Farmers and Woolgrowers' Industrial Association of New South Wales) and each of them be directed to treat the alterations to rr. 5 and 38 of the rules of the United Farmers and Woolgrowers' Industrial Association of New South Wales; (3) that the respondents (other than the United Farmers and Woolgrowers' Industrial Association of New South Wales) and each of them be directed to refrain from transferring the property and funds of the United Farmers and Woolgrowers' Industrial Association of New South Wales to the Graziers' Association of New South Wales without first obtaining authority to do so pursuant to the rules of the United Farmers and Woolgrowers' Industrial Association of New South Wales namely by a resolution dissolving the United Farmers and Woolgrowers' Industrial Association of New South Wales and directing that the property and funds be so transferred passed by four-fifths of the financial members of the United Farmers and Woolgrowers' Industrial Association of New South Wales." If, and to the extent that, any of the directions sought is beyond the provisions of s. 141 of the Act, the claimant asks the court to grant declaratory relief pursuant to s. 171C (1) of the Act in respect of the alleged invalidity of certain purported actions of members of the executive committee (as regards direction (1) supra), of two purported resolutions of a special general meeting of members (as regards direction (2) supra) and of certain planned action of the executive committee (as regards direction (3) supra). It is clear that the proceedings are aimed at preventing or obstructing the amalgamation of the two organizations upon the terms proposed. (at p165)
The claimant's case, upon analysis, can be conveniently considered under three separate headings. These are: (i) the purported signing of the written scheme and application submitted to the industrial registrar (see step (2) supra) was in breach of the rules and the submission itself constituted a non-observance of the rules since neither scheme nor submission had been approved by the executive committee (direction (1), supra); (ii) the purported provisions of the rules of the United Farmers' Association (r. 38) providing for the dissolution of that organization upon the amalgamation becoming effective are null and void (direction (2) supra); and (iii) no proper provision has been made for the disposition of the property of the United Farmers' Association and no such provision can properly be made by the executive committee of the United Farmers' Association (direction (3) supra). (at p165)
We shall deal with the claimant's case under these three headings.

(i) The purported signing of the written scheme and application submitted to the industrial registrar (see step (2) supra) was in breach of the rules and the submission itself constituted a non-observance of the rules since neither scheme nor submission had been approved by the executive committee. (at p165)
In March 1976, a detailed explanation and summary of the proposed amalgamation between the two organizations was printed and distributed to the members of the United Farmers' Association as a supplement to the "United Farmer" which is sent to each member. It is obvious that, by that time, the details of the proposed amalgamation had been settled in principle. At a meeting of the executive committee of the United Farmers' Association held on 20th May, 1976, it was resolved that the following three motions be included in the agenda for the annual conference of the United Farmers' Association: "(1) that the association supports and endorses the proposed amalgamation of United Farmers and Woolgrowers' Association of New South Wales, United Farmers and Woolgrowers' Industrial Association, and Graziers' Association of New South Wales; (2) that the executive committee of the association take all necessary action in accordance with the Conciliation and Arbitration Act to achieve submission of the question of amalgamation of the U.F.W.I.A. and Graziers' Association of New South Wales to a referendum as detailed in sections 3 and 5 of the Report of the Working Group on Amalgamation (printed as a supplement to "United Farmer" newspaper, 17th March, 1976); (3) that the referendum be conditional upon the U.F.W.A. of New South Wales completing the necessary requirements of the New South Wales Companies Act for amalgamation and also taking any other action necessary to facilitate submission of the matter to referendum in accordance with the requirements of the Conciliation and Arbitration Act". The report referred to in the second of the motions is the detailed explanation and summary of the proposed scheme to which reference has already been made. (at p166)
On 21st July, 1976, the annual general meeting of the United Farmers' Association carried resolutions in the terms of each of those three motions. (at p166)
On 22nd July, 1976, a special meeting of the executive committee of the United Farmers' Association was held on the stage of the auditorium in the Teachers' Federation Building at 300 Sussex Street, Sydney. On that day, the "Annual Convention" of the United Farmers' Association and its associated company was being held in that auditorium. The meeting of the executive committee took place during the luncheon adjournment of that "Annual Convention". Seven members of the executive committee, including the chairman (Mr. Frend), the general secretary (Mr. Regan) and the claimant were present at this meeting. The minutes secretary (Mr. Manning) was also present. The minutes of the meeting are in evidence before us. Ignoring formal parts, they read as follows:

"GENERAL BUSINESS:

(i) Section 158D of Conciliation and Arbitration Act (at p166)

Mr. Regan read a letter from the chief executive officer of the Graziers' Association of New South Wales calling for additional formal resolutions to be adopted by the Industrial Association executive as soon as possible after the general meeting. This would clarify the procedure for amalgamation as required by the Act.
MOVED: Mr. Maguire SECONDED: Mr. Chapman

'THAT the executive committee of the United Farmers and Woolgrowers' Industrial Association of New South Wales hereby

propose the amalgamation of the United Farmers and

Woolgrowers' Industrial Association with the Graziers' Association

of New South Wales'.

CARRIED

MOVED: Mr. Maguire SECONDED: Mr. MacKillop

'THAT the executive committee of the United Farmers and Woolgrowers' Industrial Association of New South Wales resolve that the execution of all documents in relation to, or for the purpose of, the said amalgamation be made by any member of the executive committee and the general secretary or any two members of the executive committee without the general secretary'.

CARRIED (at p167)

There being no further business, the meeting concluded at 1.05 p.m." (at p167)
It is common ground between the parties that at the executive committee meeting Mr. Regan did, in fact, read the letter from the chief executive officer of the Graziers' Association to which reference is made in the minutes. That letter has been placed before us. Examination of it discloses that it requested the passage of the two resolutions which the minutes record as having been passed subject only to the qualification that the United Farmers' Association was incorrectly described in the resolutions set out in the letter as the "United Farmers and Woolgrowers' Industrial Association of New South Wales". Mr. Regan gave evidence that he indicated, when reading the letter, that the words "of New South Wales" should be deleted from each resolution. (at p167)
The chairman (Mr. Frend), the general secretary (Mr. Regan), two other members of the executive committee (Mr. Chapman and Mr. MacKillop) and the minutes secretary (Mr. Manning) all gave evidence before us to the effect that the resolutions which the minutes of the meeting show as having been carried were in fact carried. Their recollection of what was said at the meeting was, not surprisingly, in some cases vague. All gave evidence however that the resolutions which the meeting had been requested to pass were in fact passed. Without exception, all impressed us as witnesses of truth. We were particularly impressed by the evidence of Mr. Manning who was patently a meticulously honest witness. Mr. Manning was responsible for taking the minutes of the meeting. He did not trouble to record the detailed text of the two resolutions which were passed for the reason that, subject to the minor alteration of deleting the words "of New South Wales", the text of each resolution which was passed was to be found in the letter of the chief executive officer of the Graziers' Association to which reference is made in the minutes. (at p167)
It would seem that the claimant's recollection of what occurred at this meeting of the executive committee of the United Farmers' Association initially coincided with the recollection of the others of those present who gave evidence and with what Mr. Manning subsequently recorded in the minutes. At the annual meeting of the Industrial Association which was held on 20th July, 1977, that is almost a year after the meeting of the executive committee of 22nd July, 1976, the claimant referred to what had happened at that meeting of the executive committee. A transcript of his remarks is in evidence before us. That transcript, which is admitted by the claimant to be accurate, records the claimant as having said: "But the crucial thing is this, that resolution, those two resolutions which I sponsored in a lunch-hour meeting of ten minutes here last year, as the opening paragraph says, Mr. Regan read a letter from the chief executive officer of the Graziers' Association suggesting the need for these two formal motions. There was a need, we passed them" (emphasis added). (at p168)
The claimant's evidence before us was that the second of the resolutions which was sought in the letter from the chief executive officer of the Graziers' Association was not, in fact, passed at the meeting of the executive committee held on 22nd July, 1976. His account of what took place was that the letter was read, the first resolution set out in the letter was moved and passed and that the second resolution set out in the letter was never proposed but that, without comment, a different resolution was proposed by him, seconded and, without discussion, passed by the meeting. The terms of the resolution which the claimant claims was passed by the meeting (instead of the second resolution which the minutes record as having been passed) was as follows: "That the executive authorize two people, being the general secretary and one other, or alternatively, any two members of the executive to confer with the Graziers' Association of New South Wales for the purpose of drafting the rules for the amalgamation of the association and the Graziers' Association". (at p168)
The claimant's account of what occurred at the executive committee meeting of 22nd July, 1976, was unconvincing at the time he gave it. In the light of the evidence of the other five witnesses who were present at the meeting and whose evidence we accept and in the context of the contents of the minutes which were subsequently confirmed and the claimant's own account to the annual meeting of the Farmers' Association of 20th July, 1977, of what had occurred, we have no hesitation in rejecting the claimant's evidence that a different resolution to the second resolution recorded in the minutes was passed at the executive committee meeting held on 22nd July, 1976. We find that the minutes accurately record the two resolutions which were passed at that meeting. (at p168)
The joint submission of the proposed scheme of amalgamation and the application were made to the industrial registrar in October 1976. As required by s. 158F of the Act, it was in writing. It was signed by Mr. Regan who was general secretary and by a Mr. Taylor who was a member of the executive committee. It is submitted, on behalf of the claimant, that the joint submission so lodged did not comply with the requirements of the Act for the reason that neither the scheme nor the submission of it or of the application to the industrial registrar had been authorized by any meeting of the executive committee and for the further reason that it was not signed in accordance with the requirements of the rules of the organization. (at p169)
It has already been mentioned that the terms of the proposed amalgamation had been settled in principle by March 1976. That proposed amalgamation was endorsed by the annual meeting of the United Farmers' Association on 21st July, 1976. The endorsement was fortified by the resolution that the executive committee take all necessary action in accordance with the Act to achieve submission of the proposed amalgamation to a ballot of members. At its meeting of 22nd July, 1976, the executive committee, as has been seen, resolved to "hereby propose" the amalgamation. That resolution complied with the requirements of s. 158D of the Act. The "proposing" clearly envisaged the lodging of the necessary submission with the industrial registrar. Obviously some details would need to be settled and formal documents prepared and executed. The second resolution passed at this executive committee meeting was plainly intended to authorize the preparation and execution of all documents necessary to procure the amalgamation. In the view we take of them, the resolutions passed by the executive committee accorded with the decision and directions of the annual general meeting and authorized the preparation on behalf of the United Farmers' Association, of the written joint submission and its lodgment with the industrial registrar. (at p169)
It was submitted, on behalf of the claimant, that the purported signing of the joint submission on behalf of the United Farmers' Association was ineffective by reason of a failure to comply with the requirements of r. 34 of the rules of that organization. Rule 34 is, and at all material times, has been in the following form: "34. Agreements. Any industrial agreement or any other document to be entered into on behalf of the association and/or its members or any of them shall be executed for and on behalf of the association by the president and by the general secretary thereof for the time being; or such other persons authorized to act in their absence by the executive". (at p169)
It was submitted, on behalf of the respondents, that the words "or any other document" in r. 34 must, in their context, be read ejusdem generis with "industrial agreement". It is, it was argued, clear that the words do not mean all other documents whatsoever since r. 33, for example, contains express and different provisions for the signing of cheques and bills of exchange. The words "to be entered into" in r. 34 and, to the extent that it is relevant, the heading "Agreements" support, so the argument went, such a reading down of the very general words. Regardless of whether the ejusdem generis rule itself can properly be said to be applicable where only one specific class is nominated (see Allen v. Emmerson (1944) 1 KB 362, at p 367 ) there is obviously much force in the argument that the context requires that the words "or any other document" be read down in some such way. It is not, however, necessary for us to decide this question for the purposes of these proceedings. (at p170)
The provisions of r. 34 only apply in respect of an industrial agreement or other document which "is to be entered into on behalf of the association and/or its members or any of them". Under the Act, the executive committee was required "to propose" the amalgamation (see step (1) supra). This it did by the first resolution passed at the meeting of 22nd July, 1976. Thereafter, it was not for the executive committee or any of its members to "enter into" the scheme of amalgamation. That was a matter for decision by the general body of members of the organization in the ballot which was to be conducted (see steps (6), (7) and (8) supra). (at p170)
The joint submission to the industrial registrar, by the United Farmers' Association and the Graziers' Association, of the written scheme for the amalgamation with the accompanying notice that the two organizations applied for the approval of the industrial registrar under s. 158J of the Act were procedural steps required by the Act before the industrial registrar could approve the submission of the proposed amalgamation to ballots in accordance with Pt VIIIA. Regulations 146B and 146C required that both the written scheme and the application be signed by two officers of each organization. The signing of the written submission of the scheme and of the accompanying notice of application by Mr. Regan and Mr. Taylor was not an execution on behalf of the association of an industrial agreement or any other document "to be entered into on behalf of the association and/or its members or any of them" within the provisions of r. 34 but was an authentication of the documents in the manner required by the Regulations. Their signing of those documents was within the scope of the authorization given by the executive committee by the second resolution passed at the meeting of 22nd July, 1976, and in no way contravened the provisions of r. 34. (at p170)
It follows that the general provisions of the proposed scheme were approved by both executive committee and general meeting of the United Farmers' Association and that the preparation of the scheme in writing which was prepared, its execution by the persons who executed it and its submission to the industrial registrar were all properly authorized by the executive committee. The claimant must fail in this part of his case.

(ii) The purported provisions of the rules of the United Farmers' Association (r. 38) providing for the dissolution of that

organization upon the amalgamation becoming effective are null and

void. (at p170)

Rule 37 of the rules of the United Farmers' Association has, at all relevant times, provided as follows: "The rules of the association in force from time to time or any of them may be added to altered amended or rescinded by a two-thirds majority of such of the financial members as are present and vote at a special general meeting called for that purpose or (inter alia) for that purpose. This shall not apply to alterations required to meet statutory requirements which may be incorporated by decision of executive". (at p171)
Up until 4th May, 1977, r.38 of the rules of the United Farmers' Association provided: "For the dissolution of the association the affirmative vote of four-fifths of the financial members shall be requisite, such vote to be passed at a special general meeting called for that purpose or should the number of such members at any time fall below ten, the association shall then be defunct". (at p171)
At a special general meeting of the United Farmers' Association held on 4th May, 1977, the following resolutions were purportedly passed:

"THAT r. 5 of the constitution and rules of United Farmers and Woolgrowers' Industrial Association be amended by deleting therefrom the last sentence reading 'If upon winding up or dissolution of the association, there be any surplus after the satisfaction of its debts and liabilities, the same shall be distributed amongst the hospitals of the State of New South Wales as the Chief Justice thereof for the time being shall direct'.

"THAT r. 38 of the constitution and rules of the United Farmers and Woolgrowers' Industrial Association be deleted and that the following rule be substituted therefor:

"38. If the association shall amalgamate with the Graziers' Association of New South Wales the name of which is to be changed to the 'Livestock and Grain Producers' Industrial Association of New South Wales' on the amalgamation coming into force in accordance with and pursuant to a scheme for amalgamation dated 27th October, 1976, jointly submitted by the association and the Graziers' Association of New South Wales to the industrial registrar under the Conciliation and Arbitration Act 1904-1976 and shall be de-registered pursuant to the said scheme and Act then thereupon the association shall be dissolved and defunct. SUBJECT AS aforesaid for the dissolution of the association the affirmative vote of four-fifths of the financial members shall be requisite, such vote to be passed at a special general meeting called for that purpose or should the number of such members at any time fall below ten, the association shall then be defunct and dissolved". (at p171)

It has not been submitted, on behalf of the claimant, that these purported resolutions were not passed "by a two-thirds majority of such of the financial members as" were present and voted "at a special general meeting called for that purpose or (inter alia) for that purpose" as required by r. 37. Indeed, the evidence is that the first of them was carried unanimously and the second with only one dissentient. The claimant contends that the second of the purported resolutions was invalid for the reason that the proposed resolution was, upon analsis, a resolution "for the dissolution of the association" which could only be validly passed if the requirements of r. 38("the affirmative vote of four-fifths of the financial members") were satisfied and that the first resolution was invalid by reason of some process of association with the invalid second resolution. Alternatively, it is submitted, on behalf of the claimant, that the provisions of r. 37 do not authorize any alteration, amendment or rescission to the terms of r. 38. (at p172)
An analysis of the terms of the purported second resolution discloses that it involved two steps. The first step was the deletion of the then existing r. 38. The second step was the substitution of the new r. 38. If r. 37 does authorize an alteration, amendment or rescission to r. 38, it is apparent that the first step did not, on any approach, involve a resolution "for the dissolution of the association" for which the provisions of art. 38 required the affirmative vote of four-fifths of the financial members. Upon analysis, the adoption of the new r.38 occurred in a context where the provisions of the old r.38 were no longer operative. (at p172)
In any event, we are of the view that the purported resolution must properly be categorized as a resolution altering the rules of the association and was not a resolution "for the dissolution of the association" within the terms of the old r.38. (at p172)
It follows that if the provisions of r.37 are applicable in respect of a resolution altering, amending or rescinding the terms of r.38 the purported resolution was valid and effective. (at p172)
We see considerable persuasive force in the argument advanced, on behalf of the claimant, that the provisions of r.37 do not authorize the alteration, amendment or rescission of r.38. As was pointed out in argument, if r.37 applies, without restriction, to r.38, the safeguard embodied in r.38 becomes completely ineffective in that, by adopting the procedure of amending the rules, two-thirds of the financial members actually present at a meeting can procure the dissolution of the association instead of four-fifths of all the financial members for which r.38 makes specific provision. (at p172)
Notwithstanding the persuasive force of this argument, we are unable to accept it. Rule 37 expressly provides that "the rules of the association in force from time to time or any of them" (italics added) may be altered in the manner specified in the rule. We can see nothing in the provisions of r.37 or the provisions of any other rule which would justify a qualification of these clear and unambiguous words. (at p172)
It follows, in our view, that the resolution deleting the old r.38 and substituting the new r.38 was valid and effective. It likewise follows that the resolution amending r.5 was also valid and effective.

(iii) No proper provision has been made for the disposition of the property of the United Farmers' Association and no such provision can properly be made by the executive committee of the United Farmers' Association. (at p173)

Clause 12 (a) of the proposed scheme of amalgamation provides: "Upon cancellation of the registration of the de-registering organization the U.F.W.I.A. will dissolve itself whereupon all its property and funds will be transferred to the amalgamated organization which will satisfy all liabilities, debts and obligations of U.F.W.I.A.". There is no vesting or other provision in the Act or Regulations which would automatically achieve the result envisaged in that clause by transferring both legal and equitable title to all assets of the United Farmers' Association to the continuing organization upon the dissolution of the former organization. (at p173)
Pursuant to the provisions of the new r.38 of the United Farmers' Association, that organization will be dissolved upon the proposed amalgamation becoming effective. There is nothing in the present rules of that organization providing for distribution of, or entitlement to, the assets of the organization upon dissolution. In the absence of any such provision and of any adverse claim, such assets would ordinarily be distributed among the members at the time of dissolution. (at p173)
As at present advised, we are of the view that the overall effect of the provisions of cl.12 (a) of the scheme of amalgamation in the context where the United Farmers' Association has, by ballot of its members, given the statutory agreement necessary to its participation in the scheme, would be that, upon the amalgamation becoming effective and the organization being dissolved, the beneficial interest in the assets of the dissolved organization would automatically pass to the continuing organization. That question is however academic in these proceedings for the reason that s. 158Q (2) (c) expressly provides that the industrial registrar shall not fix the day on which the amalgamation is to take effect until he "is satisfied as to the arrangements made for property of the de-registering organization or organizations to become the property of . . . the amalgamated organization". It is the industrial registrar - and not this Court - who must be satisfied as to such arrangements. The industrial registrar is not a party to these proceedings. There is no evidence before us as to his attitude or as to what requirements he might impose before being satisfied of the matters referred to in s.158Q (2) (c). (at p173)

Indeed, as the claimant's case was finally put, the complaint was not so much that the executive committee (or, if necessary, a special general meeting) of the United Farmers' Association would not take steps to ensure that such appropriate arrangements were made but that neither executive committee nor special general meeting had power to take such steps without a resolution being passed by four-fifths of all the financial members of the association in pursuance of r. 38 (see direction (3) supra). (at p174)
Once the conclusion is reached that r.37 authorizes alteration to any of the rules including rr.38 and 5, it is apparent that the broad submission made on behalf of the claimant cannot be sustained. A special general meeting of the United Farmers' Association could, in accordance with the provisions of r. 37, amend either r.5 or r.38 to provide that, upon dissolution, all the assets of the organization will pass to the continuing organization. (at p174)
In ordinary circumstances, the executive committee of an organization would not possess power effectively to deal with the question of title to the property of the organization after it had been dissolved. In the present matter, as has been said, we are, as at present advised, of the view that the beneficial interest in the assets of the United Farmers' Association would automatically pass to the continuing organization. If that view be correct, it would seem apparent that the executive committee would, in the context of the statutory provisions contained in Pt VIIIA of the Act, the resolutions of the annual meeting of 21st July, 1976, and the outcome of the statutory ballot, have power to make whatever procedural arrangements were necessary to ensure the passage of the bare legal title to any assets to the continuing organization. Even if that view be found, upon full argument, not to be correct, we incline to the view that in all the circumstances the executive committee does, in any event, possess the necessary powers to enter into arrangements to ensure that the provisions of cl.12 (a) of the scheme of amalgamation do become effective. (at p174)
It is not, however, necessary for the purposes of these proceedings for us to express any final view as regards the powers of the executive committee. Once the conclusion is reached that a special general meeting of the United Farmers' Association can, pursuant to r.37, amend either rr.5 or 38 to ensure that what is envisaged in cl.12 of the scheme of amalgamation is, in fact, achieved, the claimant is clearly not entitled to the direction which he seeks. Arrangements as to the matters referred to in s.158Q (2) (c) which could quite properly satisfy the industrial registrar can, once that conclusion is reached, obviously be made without the need for any resolution being passed pursuant to the provisions of r.38.

(iv) Conclusion. (at p174)
In the result, the claimant has failed to make good any part of his case. It is, therefore, unnecessary for us to deal with the submission made, on behalf of the respondents, that, even if the claimant had succeeded in making good his allegations of invalidity and irregularity, he was not as a matter of law entitled to any relief or the submission that, even if the claimant would otherwise have been entitled to relief, the court should, as a matter of discretion, refuse it. It is also unnecessary to examine whether, if any invalidity had been established, it could or should have been rectified pursuant to the provisions of s.171C. (at p175)
The rule to show cause must be discharged. (at p175)

ORDER

Order accordingly.

[1977] FCA 75

28 OCTOBER 1977