McDonald, in the matter of an application for an inquiry relation to an election for office in the Construction Forestry Mining Energy Workers Union

[1996] IRCA 322

DECISION NO:  322/96

CATCHWORDS

INDUSTRIAL LAW - Application for declaration that the applicant is entitled to remain in an office or be a candidate in an election for an office in an organisation - applicant convicted of an offence under the Criminal Code Act 1913 (WA) - whether applicant had been convicted of a prescribed offence - whether the offence involved fraud or dishonesty - "involving fraud or dishonesty".

Industrial Relations Act 1988: ss227(1), 228, 229, 230, 232(2)(b)
Criminal Code Act 1913 (WA): s338A(a)
Companies Code (NSW): s227(2)(b)
Bankruptcy Act 1966: s155(3)(B)(a)
Corporations Law: s229(3)(b)

Holt v Biroka Pty ltd (1988) 13 NSWLR 629
Mattingly v Tuckwood (1989) 88 ACTR 1
R v Austin (1989) 166 CLR 669
Pollard v Director of Public Prosecutions (1992) 8 ACSR 813
Inspector-General In Bankruptcy v Matthews, von Doussa J, 20 December 1990, unreported

No. WI 1139 of 1996

IN THE MATTER OF AN APPLICATION BY JOSEPH McDONALD

MOORE J
SYDNEY (Heard in Perth)
25 July 1996

IN THE INDUSTRIAL RELATIONS          )
  )
COURT OF AUSTRALIA                   )  No. WI 1139 of 1996
  )
WESTERN AUSTRALIA DISTRICT REGISTRY   )

IN THE MATTER OF

AN APPLICATION BY
  JOSEPH McDONALD

JUDGE:    Moore J

PLACE:    Sydney (heard in Perth)

DATE:     25 July 1996

ORDER OF THE COURT

THE COURT DECLARES THAT:

1. Joseph McDonald is not, as a result of the conviction recorded on 28 March 1996, and because of the operation of ss228, 229 or 230 of the Industrial Relations Act 1988, a person who is not eligible to be a candidate for election or to be elected or appointed to an office in an organisation or a person who has or will cease to hold office in the Construction Forestry Mining Energy Workers Union.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS          )
  )
COURT OF AUSTRALIA                   )  No. WI 1139 of 1996
  )
WESTERN AUSTRALIA DISTRICT REGISTRY   )

IN THE MATTER OF

AN APPLICATION BY
  JOSEPH McDONALD

JUDGE:    Moore J

PLACE:    Sydney (heard in Perth)

DATE:     25 July 1996

REASONS FOR JUDGMENT

This is an application by Joseph McDonald under ss228(5), 229(5) and 230(1) of the Industrial Relations Act 1988 ("the Act"). McDonald holds office as an organiser in the Construction Forestry Mining Energy Workers Union ("the CFMEU") which is an organisation registered under the Act. The application was filed on 17 April 1996.

The circumstances in which the application is made may be described briefly.  McDonald was convicted in the District Court of Western Australia on 28 March 1996 of the offence of using a threat with intent to gain a pecuniary benefit for another person: see s338A(a) of the Criminal Code Act 1913 (WA) ("the Code").  He was fined $5,000.  The facts upon which the conviction was founded were that on or about 23 February 1994 McDonald spoke to a Mr Paul Kiely.  Kiely was a builder who, at the time, was in dispute with a Mr Cameron Carr about a claim by Carr for payment of approximately $2,500. Kiely was then undertaking building work and was employing one or two members of CFMEU.  The evidence at the trial was not entirely clear as to the number of members employed.  The contract, valued at $155,000, stipulated the time the building work would take and provided that, if the building work was not completed by then, there would be a daily penalty of $30,000 for each day it remained incomplete.  Work started on the site on 22 February 1994.  The next day McDonald directed the CFMEU member or members to do no further work on the site. McDonald later spoke to Kiely and said Carr was owed money and the CFMEU member or members would not resume work till Carr was paid.  McDonald demanded payment notwithstanding that he was told by Kiely there was an issue about whether Carr was entitled to payment and the matter, as to a significant portion of the amount claimed, was before the Magistrates' Court and was to be heard two days later.  Kiely and McDonald met the following day, the demand was reviewed and the money paid by Kiely.  The two CFMEU members were then permitted to return to work.

Sections 229 and 230 form part of Division 6 of Part IX of the Act. That Division creates a scheme disentitling a person from remaining in, or being a candidate in an election for an office in an organisation if they are convicted of a prescribed offence. A prescribed offence is defined in s227(1) which provides:

"S227(1) In this Division:

"prescribed offence" means:

(a)   an offence under a law of the Commonwealth, a State or Territory, or another country, involving fraud or dishonesty and punishable on conviction by imprisonment for a period of 3 months or more;

(b)   an offence against section 313, 314, 315, 316, 317, 318 or 332;

(c)   any other offence in relation to the formation, registration or management of an association or organisation; or

(d)   any other offence under a law of the Commonwealth, a State or Territory, or another country, involving the intentional use of violence towards another person, the intentional causing of death or injury to another person or the intentional damaging or destruction of property."

The scheme provides a mechanism, found in s228(5), for determining whether the condition precedent bringing about disentitlement has been satisfied. Even if the condition precedent has been satisfied application may be made under either s229(1) and s230(1) to the Court for leave to stand for office or remain in office. The CFMEU was notified of the application: see s232(2)(b), but did not appear. In a letter to the District Registrar of the Court it indicated it did not oppose the application.

In the present case the first issue is whether the offence found in s338A(a) of the Code is a prescribed offence. The only basis upon which it might be is that it is an offence involving fraud or dishonesty or an offence involving the intentional causing of injury. As to the latter, injury may, in some statutory contexts have a wide meaning: see s4K of the Trade Practices Act 1974 and Holt v Biroka Pty Ltd (1988) 13 NSWLR 629. However in s227(1)(d) the context makes plain that it is a reference to actual physical injury caused by the action of the person convicted or, perhaps, by others if a conspiracy had been proved or an offence such as aiding and abetting had been proved.

Section 227(1)(a) speaks of an offence involving fraud or dishonesty.  What might generally be comprehended by fraud and dishonesty is discussed in S. Mitchell and P.J. Richardson: Archibald Pleading Evidence and Practice in Criminal Cases 43rd edition 1988 at p1352 et seq and 1394 et seq.  However a particular statutory context might indicate some other meaning: Mattingly v Tuckwood (1989) 88 ACTR 1 at 13. The elements in the offence created by s338A(a) of the Code are that a threat was made with the intention that a person gave a benefit. It appears that the critical element is the making of the threat: see R v Austin (1989) 166 CLR 669 at 675. In the present case the trial judge said when sentencing McDonald:

"Now in the end the reasons for your conduct appear to have been or arisen out of ignorance perhaps, arrogance towards the courts and an overzealous attitude to your duties."

While it is the nature of the offence created by s338A(a) of the Code that determines whether it is an offence comprehended by s227(1) of the Act, the remarks of the trial judge nonetheless illustrate circumstances in which s338A(a) might operate.

While it is inappropriate to attempt to describe in some comprehensive way what is, for the purposes of s227(1)(a), an offence involving fraud or dishonesty, it would, in my opinion, involve some element of deception or lack of honesty.  Similar provisions containing the formulation of "involving fraud or dishonesty" were to be found, for example, in s227(2)(b) of the Companies Code (NSW) concerning directors of companies and are still found in s155(3B)(a) of the Bankruptcy Act 1966 concerning trustees. The Corporations Law does not perpetuate the formulation "fraud or dishonesty" but now speaks of "serious fraud": see s229(3)(b). As a recent consideration of the Companies Code (NSW); see Pollard v Director of Public Prosecutions (1992) 8 ACSR 813 and the Bankruptcy Act 1966; see Inspector-General in Bankruptcy v Matthews, 20 December 1990, unreported Federal Court of Australia, von Doussa J.  My researches do not disclose any case where an offence of the type created by s338A(a) has been viewed as one involving fraud or dishonesty.

As earlier stated the criminality of the conduct to which s338A(a) is directed, derives from the making of the threat.  Threat is defined in s338 of the Code:

"338  In this chapter a reference to a threat is a reference to a statement or behaviour that expressly constitutes, or may reasonably be regarded as constituting, a threat to -

(a)   kill, injure, endanger or harm any person, whether a particular person or not;

(b)   destroy, damage, endanger or harm any property, whether particular property or not;

(c)   take or exercise control of a building, structure or conveyance by force or violence; or

(d)   cause a detriment of any kind to any person, whether a particular person or not."

The making of a threat involves no deception or lack of honesty.  Indeed it is the impropriety of making what may often be a brutal, blunt and forthright statement constituting the threat to induce a person to follow a course of action that appears to be the rationale for imposing the sanctions of the criminal law.  The offence created by s338A(a) is not, in my opinion, a prescribed offence.

I therefore declare that Joseph McDonald is not, as a result of the conviction recorded on 28 March 1996 and because of the operation of ss228, 229 or 230 of the Act, a person who is not eligible to be a candidate for election or to be elected or appointed to an office in an organisation or a person who has or will cease to hold office in CFMEU.

Given this conclusion it is unnecessary to consider the applications made under s229(1) and 230(1).

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.

Associate:  ........ ........ ......
Dated:    25 July 1996

APPEARANCES

Counsel for the Applicant:          Mr A MacTiernan

Solicitor for the Applicant:              Wojtowicz Kelly

Date of Hearing:  6 June 1996

Date of Judgment:  25 July 1996