Mellor, S. v The Federated Liquor and Allied Industries Employees Union of Australia, Queensland Branch

[1992] FCA 274

Re: SHIRLEY MELLOR
And: THE FEDERATED LIQUOR AND ALLIED INDUSTRIES EMPLOYEES UNION OF AUSTRALIA
QUEENSLAND BRANCH; BARRY GORDON LAWRENCE; SANDRA ZELDA BALDWIN; SHIRLEY
MELLOR; DOUGLAS ALFRED WILLIAM LULHAM; CAROLYN GUERIN; MAREE CHAPMAN; JENNIFER
GRAHAM; ROBERT WILLIAM RICHARDSON; JUDY CHAFFEY; STEVEN KING; MERVYN WILLIAMS;
MARC WALL; JIM ROGERS and RAY FULLER
No. Q I3 of 1992
FED No. 274
Industrial Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
INDUSTRIAL DIVISION
French J.(1)

CATCHWORDS

Industrial Law - organisation - rules - performance and observance - elected officer - removal from office - alleged gross misbehaviour - misappropriation of Union funds - power of special meeting of Branch - whether rule provides for finding of guilt by special meeting - absence of rule so providing - finding of guilt pre-condition to power of removal - proposed special meeting lacking relevant authority - restraining order made.

Industrial Relations Act 1988 s.209, s.195

Conciliation and Arbitration Act 1904

HEARING

BRISBANE

#DATE 1:5:1992

Counsel for the Applicant: Mr R.N. Chesterman QC and

Mr S. Couper

Solicitors for the Applicant: Cooper Grace and Ward

Counsel for the Respondent: Mr R.I. Hanger QC and

Ms D. Linnane

Solicitors for the Respondent: Hill and Taylor

ORDER

The Court orders that:

1. The first respondent be restrained from taking any further steps pursuant to the Resolution of the Committee of Management passed 21 April 1992 that a Special General Meeting of the Branch be held at 3pm on Wednesday, 13 May 1992 for the purpose of considering the removal from office of the applicant.

2. The application is dismissed as against the second respondents.
Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

Shirley Mellor is a member and the State Secretary of the Federated Liquor and Allied Industries Employees Union of Australia (Queensland Branch). She was elected to that office in June 1985 and re-elected in November 1989. By virtue of that office and r.3 of the Branch Rules she is a member of the Branch Committee of Management. That Committee comprises the President, Vice President, Secretary, Assistant Secretary, Treasurer, Guardian, two Trustees and eight members (r.16).

1. At a meeting of the Committee held on 21 April 1992, a resolution was carried in the following terms:
   

"That a Special General Meeting of the Branch be held at 3pm on Wednesday 13th May 1992 for the purposes of considering:-

1. The removal from office of Mrs Shirley Agnes Mellor - State Secretary and:

2. The removal from office of Mr Barry Gordon Lawrence - President of the Union and Organizer."

1. A further motion was carried requiring the publication of a notice of the meeting in four named newspapers.

2. On 28 April, the Branch Trustee, Douglas Lulham, and the Branch Vice President, Sandra Baldwin, signed a notice directed to Mrs Mellor which informed her of the resolution and set out what were called "Particulars pursuant to Rule 18 in relation to such meeting". Those particulars were as follows:
   

"Douglas Alfred William Lulham a member and a trustee of the said Branch charges that you have been guilty of gross misbehaviour in that on or about the 22nd day of November 1989 you did sign a cheque drawn on the account of the said Queensland Branch of the said Union with Commonwealth Savings Bank of Australia Spring Hill Qld in the sum of one thousand five hundred and ninety-two dollars and eight-six cents

($1.592.86) in favour of Cooper Grace and Ward solicitors in the following circumstances, namely:-

(a) No authority had been given by the Branch Committee of Management of the said Queensland Branch for such an expenditure pursuant to Rule 16 of the said Queensland Branch Rules;

(b) The payment to Cooper Grace and Ward solicitors of the said sum of one thousand five hundred and ninety-two dollars and eighty-six cents ($1,592.86), being an amount exceeding $1,000.00 and being in the nature of a loan, grant or donation to Barry Gordon Lawrence was made without the approval of the Committee of Management of the Branch and without the Committee of Management of the Branch having satisfied itself of the matters recited in Subrule

(a) of Rule 16A of the said Queensland Branch Rules;

(c) That the said payment was made for a private purpose."

The notice concluded by:

"TAKE NOTICE that you are invited to attend at the said special meeting of the Branch in order that you be granted the opportunity to be heard as to whether or not you are guilty of gross misbehaviour as set out above and if so as to whether or not you ought to be removed from office as Branch Secretary of the Queensland Branch of the said Union."

1. Mrs Mellor contends that under the Branch Rules the question of her removal from office for misappropriation of Union funds cannot be decided by a special general meeting until the question whether she has engaged in such conduct is heard and determined by the Branch Committee of Management on a charge properly laid before that Committee pursuant to r.35. She seeks an order under s.209 of the Industrial Relations Act 1988 restraining the Branch and the members of the Committee from further convening or holding the special meeting on 13 May 1992.

2. The nature of the application is such that the applicant regarded it as expedient to bring it on for hearing on notice without first seeking a show cause order. The application was filed on 30 April 1992 and made returnable today. The Union was represented by senior counsel and was content that the application be heard and determined as an application for final relief today. The application relies upon s.209 of the Industrial Relations Act 1988. The restraining order is sought upon the basis that the proposed consideration or determination by the special meeting of the question whether Mrs Mellor has been guilty of gross misbehaviour is contrary to the Rules which require a hearing and determination of that question by the Branch Committee of Management. The members of the Committee, who are named as second respondents, were not represented and do not appear to have been individually served. In the circumstances, I would not consider making a final order against them. Senior Counsel for the Union, however, has assured me that notwithstanding the absence of the second respondents the Union will be able to give effect to any order made in relation to the meeting. In the circumstances I am satisfied that all necessary parties are properly before me and that I can proceed to hear and determine the matter as against the First Respondent.

3. The point at issue is one which involves the proper construction of the Rules of the Queensland Branch of the Union. They need to be considered in the light of the rule making requirements and powers in s.195 of the Industrial Relations Act 1988. That section provides in the relevant parts:
   

"195(1) The rules of an organisation: .

.

.

(b) shall provide for:

(i) the powers and duties of the committees of the organisation and its branches and the powers and duties of holders of offices in the organisation and its branches;

(ii) the manner of summoning meetings of members of the organisation and its branches, and meetings of the committees of the organisation and its branches;

(iii) the removal of holders of offices in the organisation and its branches; .

.

.

(c) may provide for the removal from office of a person elected to an office in the organisation only where the person has been found guilty, under the rules of the organisation, of:

(i) misappropriation of the funds of the organisation;

(ii) a substantial breach of the rules of the organisation; or

(iii) gross misbehaviour or gross neglect of duty; or has ceased, under the rules of the organisation, to be eligible to hold the office;"

1. There was no equivalent provision in the Conciliation and Arbitration Act 1904, although reg.115 of the Conciliation and Arbitration Act Regulations provided as a condition of registration that organisations be regulated by rules providing, among other things, for the powers and duties of the committees and of officers, the manner of summoning meetings of members and the removal of members of committees and of officers. There was no equivalent of para.195(1)(c).
   The Branch Rules

2. The removal of branch officers and Members of the Committee of Management is dealt with by r.18 of the Branch Rules, which provides:
   

"18 - REMOVAL OF BRANCH OFFICERS AND MEMBERS OF COMMITTEE OF MANAGEMENT Any officer, organiser, or member of the Committee of Management may be removed from office by a special meeting of the Branch called in accordance with Rule 31 at which not less than one per cent of the financial members of the Branch are present, if he has been found guilty, in accordance with the rules, of:

(i) misappropriation of the funds of the Union, or

(ii) a substantial breach of the rules of the Union, or

(iii) gross misbehaviour, or

(iv) gross neglect of duty, or

(v) has ceased, according to the Rules of the Union, to be eligible to hold the office. The Officer, Organiser or Committee member shall be given particulars of his alleged failure at least two weeks before the special meeting called to deal with his case.

The removal motion to be effective must be carried by a majority of two-third of members present at the meeting at the time of voting."

Rule 31 specifies the circumstances in which special meetings of the Branch shall be held and the manner in which they are to be called. It provides as follows:

"31 - SPECIAL MEETINGS

(1) Special Meetings of the Branch shall be held when decided by the Committee of Management or upon receipt of a request in writing, in the case of a Branch with more than two thousand financial members, from one hundred (100) financial members, and in the case of a Branch with less than two thousand members from twenty-five (25) financial members, provided that such request sets out the purpose for which it is desired that the meeting shall be called. Such meeting shall be held within twenty-one days after receipt of such request, provided that if an ordinary meeting of the Branch is to be held within one month after the receipt of such request, the Branch Secretary may, if he considers it convenient, direct that the Special Meeting shall be held at the time and place of the next ordinary meeting of the Branch. In such case, no part of the business of the ordinary meeting shall be commenced until the business of the Special Meeting is completed, unless the members there present otherwise decide.

(2) All Special Meetings shall be called by the Secretary by inserting an advertisement, stating the nature of the business to be submitted to the Special Meeting, in all daily newspapers published in the capital city of the State in which the Branch is situated, at least 7 days before the date of the proposed Special Meeting.

Notice of Special Meetings shall also be given by sending to delegates at least seven (7) days before such meeting is to be held a notice setting out the time, date and place of meeting and the objects for which it is called.

(3) At any Special Meeting the number of financial members to form a quorum shall be twenty-five (25).

(4) Subject to Sub-clause (1) above, no business shall be dealt with at a Special Meeting other than the business appearing on the notice calling the meeting.

(5) Any member signing a request for a Special Meeting and failing to attend may be fined the sum of one dollar ($1.00) unless an apology shall have been presented to and accepted by the meeting. The names and members signing the request shall be read to the meeting."

Rule 35 deals with the power of the Committee of Management to hear and determine charges of misconduct. The rule is in the following terms:

"35 - MISCONDUCT

(1) The Committee of Management shall have power to hear and determine charges under this Rule.

(2) Any member may charge any other member with:-

(a) Committing any Breach of Rules;

(b) Working in contravention of an award, order or agreement;

(c) Knowingly failing to comply with any resolution or direction lawfully passed or given under any rules of the Union or Branches;

(d) Failing to attend a meeting of the Committee of Management when summoned by the Secretary;

(e) Committing any fraudulent or unlawful act in relation to the funds or property of the Union or Branch or in relation to any election held under its rules;

(f) Wrongly holding himself out as occupying any office or position in the Union or any Branch thereof, or as being entitled to represent the Union or any Branch in any capacity;

(g) Behaving in a drunken, disorderly or offensive manner at any meeting held under the rules of the Union or Branch or in the office of the Union or of any Branch;

(h) Knowingly giving false or misleading information or refusing to give information to any officer, representative or employee of the Union or Branch or any person acting as or on behalf of a Returning Officer conducting an election under its rules relating to any union business or election or any matter affecting the interests of the Union or Branch or its members;

(i) Knowingly working with a non-unionist doing work covered by the constitution of the Union, without having reported the situation to the Union or Branch;

(j) Knowingly making a false statement to become a member of the Union;

(k) Aiding or encouraging any other member in any offence under this Rule;

(l) Fails to account for any monies collected by him on behalf of the Union.

(m) Owes contributions or levies and/or fines equal to or greater than six months and one day, and does not after fourteen

(14) days' notice pay the same or make satisfactory arrangements with the Secretary.

(n) Claims expenses not incurred by him on behalf of the Union or in any way misappropriates any of the Union's funds.

(o) Having given reports of the Union business to the press other than the General Secretary, Federal President, Branch Secretaries or persons authorised by the General Secretary or Branch Secretaries."

The Question of Construction

1. It is immediately apparent from a reading of r.18 that the power of a Special Meeting of the Branch to remove an officer is conditioned upon a finding that the officer has been guilty of one of the categories of misconduct there specified or upon the fact that he or she is no longer eligible to hold the office. The question agitated before me is whether, in respect of misconduct, the finding of guilt can be made by the meeting or must have been made by the Committee of Management under r.35.

2. Rule 18 contains an obvious drafting error in that it appears to treat cessation of eligibility to hold office as a species of misconduct requiring a finding of guilt. To so construe the rule would be absurd. It is to be read in accordance with its plain intention which was to adopt and incorporate as part of the rules of the Branch the language of s.195(1)(c) of the Industrial Relations Act. On that basis I would construe it as though it read:
   

"18 - REMOVAL OF BRANCH OFFICERS AND MEMBERS OF COMMITTEE OF MANAGEMENT Any officer, organiser, or member of the Committee of Management may be removed from office by a special meeting of the Branch called in accordance with Rule 31 at which not less than one per cent of the financial members of the Branch are present, if he has been found guilty, in accordance with the rules, of:

(i) misappropriation of the funds of the Union, or

(ii) a substantial breach of the rules of the Union, or

(iii) gross misbehaviour, or

(iv) gross neglect of duty, or has ceased under the Rules of the organisation to be eligible to hold the office."

That reading gives a clue to the proper construction of the rule in the area of concern. The rule and indeed the statutory provisions from which it was derived could have conditioned the power to remove a person from office in the Branch on the fact of misconduct in the same way that that power, in the case of a person whose eligibility has ceased, is conditioned upon the fact of ineligibility. The latter basis for removal clearly requires that the meeting be satisfied that the officer is not eligible to hold office. Such a finding is implicit in the decision to remove an officer on that basis. Were the other part of r.18 to authorise removal from office because of the commission of one of the four categories of misconduct, then it would similarly be necessary for the members of the Special Meeting to be satisfied that the misconduct had occurred.

1. The requirement under r.18 that the officer be "found guilty" suggests a two stage process which is not merely a matter of logic but also contemplates a distinct and identifiable procedure for such a finding to be made. The words "in accordance with the Rules" which qualify the requirement for such a finding put that beyond doubt. Such rules are not to be identified with r.18 which, in my opinion, merely empowers the meeting to remove the officer when a finding has been made. It may be the case that the Union could make a rule or rules setting up a procedure by which a finding that an officer had been guilty of misconduct could be made by resolution of a special meeting. I am satisfied, however, that it was not the intention of s.195(1)(c) that a rule which provides only for the removal of a person from office for misconduct can, without anything more, answer the description of a rule of the organisation under which a person may be found guilty of misconduct. Rule 18, in my opinion, does no more than provide for the removal of a person from office when a finding of guilt has been made. It is not a rule which, of itself, authorises the meeting to make such a finding. I should add that on any view of its construction the requirement for a two-thirds majority applies only to the removal motion. The fact that it does not apply to the finding of guilt again suggests that the rule does not contemplate the meeting making such a finding. I conclude therefore that r.18 as it presently stands does not contain within it rules under which an officer may be found guilty of any of the specified categories of misconduct. If there were no such provision elsewhere in the Rules of the Branch, then r.18 would be inoperative.

2. In this case there is a rule providing for findings of misconduct and that is r.35. I am inclined to think that although some of the categories of offence specified in that rule will fit within the classes of misconduct defined by r.18, the latter casts a wider net, as one might expect, having regard to the standards of responsibility and conduct reasonably to be expected of those holding high office in the Union. To the extent that r.18 covers a wider range of misconduct than r.35, then it is to that extent inoperative unless and until the rules are amended to provide for a procedure by which findings of guilt can be made.

3. Relevantly to the present case, r.35 provides for a charge to be laid by one member against another for misappropriating Union funds (see r.35(2)(g)). The Committee is given the power to find a person so charged guilty and to impose a fine not exceeding $20, remove him or her from any position, suspend membership or deprive him or her of any right or benefit of membership. It is, in my opinion, a rule under which a finding can be made that an officer was guilty of misappropriation of funds. Such a finding could form a basis for removal of the officer from office by a Special Meeting convened under r.18.

4. It has been suggested that because of the provisions of s.195(1)(c) of the Industrial Relations Act 1988, r.35 could not validly authorise the removal of a person from office by the Committee. It is arguable that r.35 is itself a rule which, so far as it relates to conduct within the categories specified by s.195(1)(c), provides for the removal from office of persons elected to office. However, it may be debateable whether it does so as a matter of construction and in particular, whether the term "the power to remove a member found guilty of misconduct from any position" extends to the removal of a person from elected office. The specific provision of r.18 may also militate against such a construction. However, it is not necessary on this application that that question be determined.

1. I am satisfied that r.18 does not authorise the removal of Mrs Mellor from her office without a prior finding in accordance with the Rules that she has been guilty of misconduct which falls within one of the four categories specified in r.18. Rule 35 appears to be the only rule which provides a procedure under which such a finding can be made. In the circumstances, the Special Meeting would not have the authority to make the decision which it is to be asked to consider. I find therefore that the resolution of the Committee to call such a meeting is not in accordance with the Rules and will make an order under s.209.