O'Connor v Setka

Case [2020] FCA 441

FEDERAL COURT OF AUSTRALIA

O’Connor v Setka [2020] FCA 441

File number(s): VID 13 of 2020
Judge(s): O'CALLAGHAN J
Date of judgment: 6 April 2020
Catchwords:

INDUSTRIAL LAW – Fair Work (Registered Organisations) Act 2009 (Cth) – application under s 164 for an order giving directions for the performance or observance of union rules – where internal membership demarcation dispute between divisions of the union involving proper construction of union rules

UNION RULES – principles of construction – where rules amended from time to time – where internal inconsistencies and redundancies – whether rules to be construed by reference to deleted provisions – where construing instruments by reference to deleted words is unsafe guide to meaning

UNION RULES – where separate rules for the operation of divisions and branches of the union – such rules are subordinate to national rules
Legislation: Fair Work (Registered Organisations) Act 2009 (Cth) ss 164, 164(3)
Cases cited:

Callaghan v Federated Clerks Union of Australia (1987) 22 IR 346

Finance Sector Union of Australia v Unimoni Pty Ltd [2019] FCA 1128

Health & Case Management Limited v The Physiotherapy Network Limited [2018] EWHC 869 (QB)

Ideal Business Centres Pty Ltd v Violin Holdings Pty Ltd atf The Violin Investment Trust [2018] NSWSC 1249

Mineralimportexport v Eastern Mediterranean Maritime Ltd [1980] 2 Lloyd’s Rep 573

Mopani Copper Mines plc v Millennium Underwriting Ltd [2008] EWHC 1331 (Comm); [2008] 2 All ER (Comm) 976

ResMed Ltd v Australian Manufacturing Workers’ Union (No 2) (2017) 249 FCR 408

R v Cohen; Ex parte Motor Accidents Insurance Board (1979) 141 CLR 577

R v Isaac; Ex parte Transport Workers’ Union (1985) 159 CLR 323

R v McKenzie; Ex parte Actors and Announcers Equity Association of Australia (1982) 148 CLR 573

R v Williams; Ex parte Australian Building Construction Employees’ and Builders’ Labourers’ Federation (1982) 153 CLR 402

Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148; (2014) 245 IR 449

Date of hearing: 25-28 February and 3 March 2020
Registry: Victoria
Division: Fair Work Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 150
Counsel for the Applicant: Mr H Borenstein QC with Mr J Fetter and Mr Y Bakri
Solicitor for the Applicant: Slater & Gordon
Counsel for the Respondents: Mr CW Dowling SC with Mr PJ Doyle and Mr CJ Tran
Solicitor for the Respondents: Maurice Blackburn

ORDERS

VID 13 of 2020
BETWEEN:

MICHAEL O'CONNOR

Applicant
AND:

JOHN SETKA

First Respondent

ELIAS SPERNOVASILIS

Second Respondent

RALPH EDWARDS (and others named in the Schedule)

Third Respondent

JUDGE:

O'CALLAGHAN  J

DATE OF ORDER:

6 APRIL 2020

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.Any party wishing to do so is to file submissions on the question of costs within 7 days.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

O’CALLAGHAN J:

INTRODUCTION

  1. This proceeding arises from an internal demarcation dispute between the Manufacturing, and Construction and…

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AGLC
O'Connor v Setka [2020] FCA 441
Case
[2020] FCA 441
Decision Date

CaseChat Overview and Summary

In the case of O'Connor v Setka, the Federal Court was asked to resolve a dispute between members of the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU). The crux of the matter was a disagreement over the proper interpretation of certain union rules, specifically regarding the eligibility criteria for membership in different divisions within the union. The case arose from a claim by Mr O'Connor under section 164 of the Fair Work (Registered Organisations) Act 2009, seeking an order to enforce the union's rules. The respondents, including various union officials and members, argued against Mr O'Connor's interpretation of the union's National Rules and Division Rules.

The primary legal issues the court had to address were the proper principles of interpreting union rules, especially in light of internal inconsistencies and historical changes to the rules. The court had to determine whether deleted provisions of the rules should be considered in the interpretation process and whether certain rules were subordinate to others. Additionally, the court needed to ascertain whether the rules should be construed in a manner consistent with the historical context and common understanding of the terms used.

The court held that the construction of the union rules proposed by the respondents was to be preferred. It found that the interpretation should not rely on deleted provisions, as doing so would be an unsafe guide to the meaning of the current rules. The court also determined that the Division Rules were subordinate to the National Rules, and that the rules should be construed in a manner that aligns with the common understanding of the terms used. The court concluded that the historical context and evidence of the common understanding at the time the rules were drafted should inform the interpretation, but the rules must be interpreted as they currently stand.

The court dismissed Mr O'Connor's proceeding and directed that any party wishing to make submissions about costs do so within seven days. This decision underscores the importance of interpreting union rules in a manner that reflects their current form and the common understanding of the terms used, while also considering historical context where relevant.

Orders

Orders of the court

1. The proceeding be dismissed.

2. Any party wishing to do so is to file submissions on the question of costs within 7 days.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The Maritime Union of Australia Division Rules contain a provision (r 3) headed “Eligibility for Division” which provides: “Every member who is a member of the Union by virtue of Rule 2(S) (Eligibility) of the National Rules shall belong to this Division”.THE EVIDENCE Mr O’Connor relied upon the following evidence:(1)His affidavits affirmed on 10 January 2020 and 7, 11 and 14 February 2020. Among other things, Mr O’Connor deposed to the involvement of the respondents in the conduct that he contends is in breach of the National Rules. There was no dispute about the fact that the respondents, or some of them, have procured the resignations referred to above, so there is no need to rehearse the evidence on that topic in these reasons. Mr O’Connor also gave evidence about his attempts to resolve the dispute internally, which I accept as explained above at [21]. Mr O’Connor also gave evidence in his third affidavit, about which he was cross-examined, that r 42 of the National Rules was never “implemented”. It will be necessary to recite that evidence, and the case put against it by the respondents, later in these reasons. He also deposed in his third affidavit that “there was never any restructuring” of the Manufacturing Division (previously the Forestry, Furnishing, Building Products and Manufacturing Division (FFPD)) and the Construction & General Division pursuant to rule 42(iii) of the National Rules. He further deposed in his fourth affidavit that the Construction and General Division and the FFPD failed to reach agreement under the process in r 42D regarding the restructuring of the FFTS Victoria Branch, and of the failure of the National Executive Council and the National Executive to impose a resolution. (2)Affidavits of Leo Skourdoumbis affirmed on 8 January, 7 February and 21 February 2020. As noted above, Mr Skourdoumbis is the Senior Assistant Secretary of the Manufacturing Division of the CFMMEU. He deposed, among other things, to facts no longer in dispute about the involvement of the respondents in the alleged conduct in breach of the National Rules. He was cross-examined.(3)An affidavit of Trevor Smith affirmed on 14 February 2020. Mr Smith is a life member of the CFMMEU. When he retired in April 2006 he was the National President of the Union and the National Divisional Secretary of the FFPD. He gave evidence about the non-implementation of r 42 along the same lines as Mr O’Connor, and he was cross-examined about it. (4)A solicitor’s affidavit of Phillip John Pasfield sworn on 25 February 2020 (producing material relevant to historical amendments to the National Rules).(5)An affidavit of Steve Abboushi sworn on 10 January 2020 (deposing to the involvement of the respondents in the conduct alleged to be in breach of the National Rules). The respondents relied upon the following evidence:(1)Affidavits of Ralph Edwards affirmed on 5 February 2020 and 19 February 2020. As noted above, Mr Edwards is the President of the Construction Branch. He gave evidence about the history of amalgamations; the distinction between “on-site” construction work, on the one hand, and “off-site” manufacturing work on the other hand; and the different on-site and off-site jobs performed by floor layers, glaziers and cabinet makers. He was cross-examined.(2)An affidavit of Martin Kingham affirmed on 19 February 2020. He gave evidence about the historical role of the Divisions within the CFMMEU, translation of members under the National Rules and the distinction between on-site and off-site workers.(3)Solicitor’s affidavits of Declan Vincent Murphy affirmed on 19 and 24 February 2020 (producing material relevant to historical amendments to the National Rules).(4)Affidavits of: Andrew Smith affirmed on 19 February 2020; Mansour Taghinejad affirmed on 19 February 2020; Peter Ngauamo sworn on 4 February 2020; John Kevin Semmens affirmed on 5 February 2020; Jay Rose affirmed on 4 February 2020; Benjamin George Smart affirmed on 4 February 2020; Boipelo Sithole affirmed on 5 February 2020; Andrew Doughty sworn on 3 February 2020; Adam Tester sworn on 4 February 2020; and Benjamin James Galeney affirmed on 5 February 2020. Those individuals are, variously, glaziers, floor layers or cabinet makers, who deposed to the nature of the work that they perform on construction sites and the circumstances of their resignations from the Manufacturing Division and of their joining the Construction and General Division, none of which was controversial and none of which was referred to in closing addresses as having any bearing on the question of the proper construction of the rules.(5)A solicitor’s affidavit of Daniel James Victory affirmed on 5 February 2020, relating to the applicant’s efforts, through his solicitors, to resolve the dispute within the Union.

Decision

Reasons for decision

Thirdly, clear words would be required to make good the “fixed” or “enshrined” proposition because it would be an unlikely thing to have intended that the FFTS Division was to be treated differently to any other Division. Such an intention is even more unlikely when (on the applicant’s case) one must have reference to evidence of context, including minutes of meetings of the National Executive or the National Executive Committee dating back to 2002, and the text of a deleted rule, in order to divine it.CONCLUSION In my view, for the reasons that I have given, the construction of the National Rules contended for by the respondents is to be preferred. The proceeding will therefore be dismissed. Any party wishing to make any submission about costs will be directed to do so within 7 days.

Ratio Decidendi

Legal Principle Established

As for deleted r 42D, the respondents submitted as follows:This rule was introduced in July 2002, and deals with administrative arrangements for the restructuring of the FFTS into the Manufacturing Division. The rule allowed for a Victorian Branch of the FFTS to exist within the Manufacturing Division up until 26 March 2005. It then provided (in paragraph 4) for a meeting, prior to this date, to be chaired by the National Secretary for the purposes of finalising translation/integration provisions “intended by the respective Schemes of Amalgamation and the Rules of the Union”. Importantly, paragraph 5 provided that, in default of agreement, the matter would be referred to the National Executive to be determined in accordance with “Schemes of Amalgamation and the Rules of the Union”.The reference to the “Rules of the Union” in Rule 42D must be taken to be a reference to the rules governing the allocation of members between Divisions, as set down by rules 7 and 42. These rules are consistent with the Scheme of Amalgamation, which was also to be applied to any unresolved dispute under the terms of rule 42D. Presumably, Mr O’Connor’s case is that rule 2 would have applied to determine a dispute had one been referred. But this could not be the case, as the application of historic eligibility rules to a demarcation dispute is inconsistent with the industry divisions provided for in the Scheme of Arrangement.The fact that no agreement was reached after rule 42D was enacted, and no determination was made by the National Executive, is not to the point. It is clear that rule 42(iii) would supply the basis for any such agreement or determination.CONSIDERATION The parties agreed about the applicable principles of construction, save for the relevance of the passage from the judgment of Barwick CJ in Cohen’s case, upon which Mr Borenstein relied (see [79] above). The ordinary rules which govern the construction of written documents apply also to union rules, although the courts are accommodating of infelicities in drafting and strive to achieve a practical construction of them: see R v McKenzie; Ex parte Actors and Announcers Equity Association of Australia (1982) 148 CLR 573 at 576-577 (Gibbs CJ; Mason, Aickin and Wilson JJ agreeing); ResMed Ltd v Australian Manufacturing Workers’ Union (No 2) (2017) 249 FCR 408 at 413 [14] (Siopsis, Bromberg and Katzmann JJ). The common understanding of the ordinary application of the words is relevant. In R v Williams; Ex parte Australian Building Construction Employees’ and Builders’ Labourers’ Federation (1982) 153 CLR 402 at 408, Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ said:The eligibility provisions in the rules of a registered organization of employees serve the function of defining the general area or areas of industry or industrial pursuit from which members can legitimately be drawn and with which the organization can legitimately be concerned. Since such eligibility provisions constitute a reference point for courts, commissions, employers, employees and other organizations in determining or ascertaining an organization’s proper coverage and field of operation, they must be construed objectively. In so construing them, however, it is permissible to pay regard to any common understanding among people concerned with relevant industries and particularly with industrial matters of the ordinary application of the words used and to take account of evidence of that common understanding furnished by the previous use of the words in the relevant organization’s rules and in statutory provisions, decisions, determinations, awards, reports and other papers concerned with the relevant industry or industries.(Citations omitted.)