Pillar, D.I. v F. O'Grady

[1990] FCA 396

JUDGMENT No. ?.%,./..& .......

GENERAL DISTRIBUTION NOT REOUIRED

IN THE FEDERAL COURT OF AUSTRALIA	)
1
VICTORIA DISTRICT REGISTRY	1 No. V1 22 of 1990
1NDUSTRIA.L DIVISION
B E T W E E N :

DAVID INGLES PILLAR &

STEPHEN WILLIAM BEATON

Applicants

A N D :

F. DOMINIC. B.
GIANACOVO, J
McCARTNEY, M. SANTANA,
D. VAN DAM, R
WILLIAMS, J. NICOL. Z.

PRAZAC and T. SINCLAIR

Respondents

JUDGE MAKING ORDER:  KEELY J .

PLACE ORDER MADE:	MELBOURNE
DATE ORDER MADE:	3 AUGUST, 1990  RECEIVED

Gianacovo, J. McCartney, M. Santana, D. Van Dam, R. Williams, J. Nicol, Z. Prazac and T. Sinclair and each Workerst Industrial Union of Australia ("the Union") of them perform and observe the rules of the Building

9 AUG 1990

MINUTES OF ORDER

THE COURT ORDERS THAT:

1.     That the respondents F. OfGrady, D.Henderson, V. Raffa,

J. Saddington, M. Kingham, M. Bingham, F. Dominic, B.

and of the Victorian Branch ("the Branch") of the Union by treating as null and void and of no effect, the purported appointment of -

(i)	the respondent Raffa as Acting Secretary of the Branch;
(ii)	the respondent Kingham as Acting Assistant Secretary of the Branch; and
(iii)	the respondent Bingham as Assistant Secretary of the Branch.

2.    That the respondents F. O'Grady, V. Raffa, J. Saddington, M. Kingham, M. Bingham, F. Dominic, B. Gianacovo, J. McCartney, M. Santana, D. Van Dam, R. Williams, J. Nicol, 2. Prazac and T. Sinclair and each of them perform and observe the rules of the Union and of the Branch by requiring and permitting Henderson to perform and carry out the duties and functions of

Secretary of the Branch.

3 .      That the respondent Henderson perform and observe the rules of the Union and of the Branch by performing and carrying out the duties and functions of Secretary of the Branch.

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

GENERAL DISTRIBUTION NOT REQUIRED

IN THE F E D E W COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	1 No. V1 22 of 1990
1
INDUSTRIAL DIVISION	1
B E T W E E N :

DAVID INGLES PILLAR &

STEPHEN WILLIAM BEATON

Applicants

A N D :

F. 0 ' GRADY , D. HENDERSON, V. RAFFA,

J. SADDINGTON . M.

KINGHAM, M. BINGHAM,
F. DOMINIC. B.

GIANACOVO. J

McCARTNEY . M. SANTANA .

D. VAN DAM, R
WILLIAMS, J. NICOL, Z.
PRAZAC, and T.

SINCLAIR

Respondents

3 AUGUST, 1990 KEELY J.

REASONS FOR JUDGMENT

On 27 June, 1990 the above-named respondents ("the

, respondents") were ordered to show cause why certain orders should not be made under S. 209 of the Industrial Relations Act 1988 ("the Act"). The order to show cause was also directed to four other respondents; they were not represented at the hearing of this matter and orders are no longer sought against them. The applicants' counsel stated that, if the court made orders in the terms sought in paragraphs l(b), 2 and 3 of the order to show cause, he would not ask for an order in the form of paragraph l(a).

In the result the orders presently sought against the respondents are as follows:-

1. That the respondents and each of them perform and observe the rules of the Building Workers1 Industrial Union of Australia ("the Union") and of the Victorian Branch ("the Branch") of the Union by treating as null and void and of no effect, the purported appointment of -

(i)	the respondent Raffa as Acting Secretary of the Branch;
(ii)	the respondent Kingham as Acting Assistant Secretary of the Branch; and
(iii)	the respondent Bingham as Assistant Secretary of the Branch.

2.

That the respondents, other than the respondent Henderson, and each of them perform and observe the rules of the Union and of the Branch by requiring and permitting Henderson to perform and carry out the

duties and functions of Secretary of the Branch.

1. That the respondent Henderson perform and observe the rules of the Union and of the Branch by performing and carrying out the duties and functions of Secretary of the Branch.

   It was common ground that:-

2. The Union is an organisation of employees registered

under the Act.

2. The applicants are and have at all material times been members of the Union in the Branch.

3. The respondent Henderson was at all material times the Secretary of the Branch.

4. The respondents Raffa and Saddington are and were at all material times Assistant Secretaries of the Branch.

5. The respondents Kingham and Bingham are and were at

all material times Branch Organisers and members of the State
Management Committee ("the SMC").

6.      The respondent OrGrady is President of the Branch and

' the remaining respondents are members of the SMC.

7.       The last election for Branch Officers, including Mr.

Henderson, was held in 1987 with the tens of offices commencing on 2 January 1988.

8. On or about 22 May, 1990 Mr. T. McDonald, the National

Secretary of the Union, issued a Media Release ("the Media
Release") which read as follows:

"BUILDING WORKERS' INDUSTRIAL UNION OF AUSTRALIA

NATIONAL OFFICE

T. McDonald

National Secretary

E. Boatswain
S. Sharkey

Asst. National Secretaries

MEDIA RELEASE...MEDIA RELEASE...MEDIA
RELEASE...MeDIA RELEASE

Substantial changes have been made to the leadership of the Melbourne office of the BWIU following discussions with the union leadership today.

National Secretary Tom McDonald said in Melbourne today the 1990's promise to be a crucial time for building unions.

Mr. McDonald said State Secretary Don Henderson is to work with the Federal President Bill Ethell in the Melbourne National office to strengthen the BWIUfs relationship with other unions and in other specific areas.

Mr. McDonald said some veteran members of the

leadership such as Ray Collins and Les Applebee, will be announcing their retirement at the coming state conference to enable a smoother transition for the new leadership in the 1990's.

"They have led the union through one of its most

difficult phases in recent years.

"I am very pleased and encouraged by the decision of the Victorian branch to develop a strong leadership group of young and enthusiastic officials as we move into the 1990's.

"Some changes have also been made to more adequately represent the large number of Builder's Labourers now in the union," he said.

ends "

9. A few days after the date of the Media Release, a notice was sent to shop stewards of the Branch by Mr. Raffa ("Mr. Raffats Notice"). That notice was in the following terms :

"BUILDING WORKERS' INDUSTRIAL UNION OF

AUSTRALIA

VICTORIAN BRANCH

....

D. R. Henderson, Secretary

V. Raffa, J. A. Saddington, Assistant Secretaries

-.

Attention Shop Stewards

A number of important changes have taken place within the leadership of the Victorian branch of the BWIU.

The changes will strengthen the unity and quality of leadership of the branch to the membership.

These changes were made following discussions between the Victorian SMC, the National Executive and all Victorian branch officials.

A review of the work of the Victorian branch showed there were some areas where the potential for serious divisions to develop could have harmed the union and the

membership.

The agreement was achieved by consensus and was overwhelmingly endorsed by a joint meeting of the Victorian SMC and all full-time

officers .

One of the aims of the changes is to give Builders Labourers further representation within the branch and to ensure that they occupy senior positions within the branch. Similar changes are to take place in the NSW branch and within the Federal Leadership so that it takes account of the fact that Builders Labourer's now make up a significant part of the membership.

In Victoria these changes include the decision by Les Applebee, long tern President of the BWIU to resign and Ray Collins, Vice President, to resign. Frank Gasparini has also resigned and a tribute to all three men was given by National Secretary, Tom McDonald, at the Annual State Conference of the BWIU on Friday May 25.

The BWIU leadership, while being proud of its achievements, is always prepared to examine the work of officials with the aim of such criticism leading to an improvement in the work and a higher level of unity.

While some of the criticism was directed at

Don Henderson this in no way reflected on his

dedication, honesty or integrity, or that of	.
any other official.
The decision that Don Henderson should work full-time for the National office of the BWIU was made at the request of Don Henderson. This was announced at a press conference in the union office on Tuesday afternoon
(22/05/90).
The BWIU is currently involved in amalgamation negotiations with a number of unions and the prospects of these being finalised at an early date will be accelerated as a result of the amendments to the Industrial Relations [Alct the Federal Government will introduce later this year.
This will involve the Union in a lot of activity of which a ballot of the membership
will be a crucial part.

Don Henderson will begin work with the National office from Monday 28/05/90 after a period of leave.

Enemies of the BWIU will seek to distort these developments for their own sinister political gains and should be ignored by the membership.

The senior office bearers are the President, Frank OrGrady, the acting secretary of the BWIU, Vince Raffa, acting assistant secretary, Martin Kingham, with Martin Bingham to also become an assistant secretary. John Saddington continues as an assistant secretary.

AUTHORISED BY VINCE RAFFA, ACTING STATE

SECRETARY BWIU VICTORIA.

[Signed] Vincent Raffa"

At the hearing counsel appeared for M r . Henderson and senior and junior counsel appeared for all of the other respondents ("the other respondents"). Mr. Henderson contended that he "is currently on two months leave of absence from his duties in the Union and is due to recommence duties from 30 July, 1990 whereupon he will take up duties on

- secondment to the National office of the Union". It appeared to be common ground that Mr. Henderson is not currently performing the duties of Branch Secretary and that from "30 July 1990 ... he will take up duties ... [in] the National office of the Union"; it was contended by the respondents that he was "on secondment" to that office, but that was not common ground. It should perhaps be added that the date "30 July 1990" does not accord with the date in Mr. Raffa's notice that Mr. Henderson "will begin work with the National office from Monday 28/05/90". It may be that the commencement of that

.,work was delayed; whatever the reason for that difference, the

case was conducted on the basis that that question (of which of those two dates was the date on which Mr. Henderson was to begin work) was not of any particular significance in the determination of the issues in this case.

The applicants contended (1) that the Media Release

and Mr. Raffa's Notice established that there was an
arrangement ("the arrangement"), to which Mr. Henderson and
other persons, including the respondents, were parties (2)
that under the arrangement Mr. Henderson will "work full-time
for the National office of the BWIUu on and from 30 July 1990
(3) that there was no evidence that the SMC had granted to Mr.
Henderson leave of absence from his duties as Branch
Secretary, without which leave he would not be permitted to
work full-time for the National office (4) that, if, contrary
to their submissions, the court found that the SMC had
purported to grant such leave, the SMC was not empowered F by
the rules to do so.

As to the terms of the arrangement, I find, on the Media Release and Mr. Raffa's Notice, that the arrangement was and is that Mr. Henderson will work full-time for the National office and that he will continue to do so for a very lengthy period of time, extending beyond the end of 1990, during the whole of which period he will be "absent from normal duties" as Branch Secretary (see Branch Rule 23). I have reached that

conclusion from the words used in those documents, from their

context and from the general tenor of the two documents.

As to the likely length of the period, the Media Release said "the 1990's promise to be a crucial time for building unions"; it referred to "substantial changes ... made to the leadership of the Melbourne . . . BWIU" and to the decision "to develop a strong leadership group of young and enthusiastic officials as we move into the 1990s". That document was publicly announcing "changes made to the leadership" - not some arrangement for Mr. Henderson to be seconded to assist in the National office on a temporary or short-term basis. The two references to "the 1990's" - as distinct from the current year 1990 - are significant.

Mr. Raffa's Notice expressly referred to the earlier "press conference ... on ... 22/05/90" and is to be read in the light of the Media Release by Mr. McDonald. Its opening sentence stated that a "number of important changes have taken place within the leadership ... [which] will strengthen the

unity and quality of leadership of the Branch . . ."; it said

that the "BWIU leadership ... is always prepared to examine the work of officials with the aim of such criticism leading to an improvement in the work and a higher level of unity"; and it referred to "some criticism ... directed at Don Henderson" before referring to the "decision that Don Henderson should work full-time for the National office ...".

The last paragraph of m.	Raffa's Notice specifically referred
to "the senior office bearers" (of the Victorian Branch) as	including "the acting secretary of the BWIU, Vince Raffa,
acting assistant secretary Martin Kingham ...".
It was suggested by the respondents' counsel that certain passages in the two documents were "equivocal" and that they should not be read in the way suggested by the applicants' counsel. Having studied both documents carefully, I am unable to uphold that submission. In my opinion, on the Media Release and Mr. Raffa's Notice, the arrangement was and is that Mr. Henderson will work full-time for the National Office for a very lengthy period of time, extending beyond the end of 1990, during which time he will be "absent from normal duties" as Branch Secretary and Mr. Raffa will be acting Branch Secretary (i.e. performing Mr. Henderson's normal duties) and Mr. Kingham will be acting assistant Branch secretary (i.e. performing Mr. Raffa's normal duties).
However, if the wording of the two documents is -not itself sufficient to warrant that conclusion, in my opinion it
is permissible for the court to take into account the failure
of counsel for the respondents to call any evidence as to the
terms of the arrangement i.e. in considering whether to infer
that the arrangement was as I have stated. In considering
whether an inference "should be drawn, the circumstance that
the defendant disputing it might have proved the contrary had
he chosen to give evidence is properly to be taken into
account as a circumstance in favour of drawing the inference"

. (per Menzies J. in Jones v Dunkel (1959) 101 CLR 298 at 312 - see also Kitto J. at 308 and Windeyer J. at 320-321).

If (contrary to the opinion already expressed), the wording of the Media Release and of Mr. Raffa's Notice is equivocal then, taking into account the failure of the respondents to call evidence as to the terms of the arrangement, I draw the inference that the arrangement is that

Mr. Henderson will work full-time for the National office for

a very lengthy period of time, extending beyond the end of 1990, during which time he will be "absent from normal duties" as Branch Secretary and Mr. Raffa will be acting Branch Secretary.

It may be added that Mr. Raffa's Notice, after mentioning criticism of Mr. Henderson, referred to the "decision that Don Henderson should work full-time for the

National office . . . ". The wording of the Notice is not

consistent with any suggestion that such full-time work should only be for a short period or for a temporary purpose. On the contrary, the Notice referred to amalgamation negotiations with a number of unions and said that -

"the prospects of these being finalised at an early date will be accelerated as a result of the amendments to the Industrial Relations [Alct the Federal Government will introduce later this year. This will involve the Union in a lot of activity of which a ballot of the membership will be a crucial part."

The Notice conveys that that ballot will not take place until

after the amendments to the Act become law - amendments which

are to be introduced into Parliament "later this year".

As to whether there had been a resolution carried by the SMC, the Media Release stated that the "changes . . . made to the leadership" followed "discussions with the union leadership today". Neither the Media Release nor Mr. Raffa's Notice made any reference to a meeting of the SMC as such; the Notice referred to the "changes . . . within the leadership of the Victorian branch" - which in my opinion include the change as to Mr. Henderson's work - as having been made "following discussions between the Victorian branch officials ... The agreement was achieved by consensus and was overwhelmingly endorsed by a joint meeting of the Victorian SMC and all full- time officers". The emphasis of the documents is on "discussions" and "consensus". There is no reference to any resolution carried by the members of the SMC; nor is there any reference to any meeting of that body - as distinct from the "joint meeting" referred to in the Notice.

On my examination of the Media Release and of Mr. Raffa's Notice, I have reached the conclusion that the decisions that Mr. Henderson is to work in the National office, that Mr. Raffa is to be the acting Branch Secretary, that Mr. Bingham is to be an assistant secretary and that Mr. Kingham is to be acting assistant secretary were not decisions made by resolution carried at a meeting of the SMC. If that conclusion is not open on the wording of the two documents,	then it is inferred by me from the documents, after taking	into account the failure of the respondents to call any
evidence as to whether any relevant resolution was carried at any meeting of the SMC.
The Branch Rules require that the Branch Secretary shall "be under the control of the SMC" and "shall devote the whole working time to the business of the Branch" - see, in particular, Rule 26(3). He also has other specific duties which include (a) "if possible attend a11 meetings of the SMC", (b) to "forward a report of the business transacted at such meetings", (c) to "deal with all correspondence"; (d) "in consultation with the President [to] decide on any course to be pursued pending a meeting of the SMCv; and (e) "perform such other duties as the SMC may from time to time decide" -
see Branch Rule 2 6 ( 4 ) , (5), (9) and (11).
In my opinion the arrangement that Mr. Henderson is to "work full-time for the National office" is quite inconsistent with the performance by him of the duties of Branch Secretary; as already mentioned, the arrangement included a decision that Mr. Raffa was to be acting Branch Secretary.
The conclusions already expressed, namely, as to the content of the arrangement and that the decisions were not made by resolution carried at a meeting of the SMC, are sufficient reason, in my opinion, for the court to make the
three orders sought, the terms of which have been set out
earlier in these reasons.
As to the powers conferred upon the SMC by the Branch Rules, submissions were heard from the parties on the question whether they conferred the power to grant leave of absence to Mr. Henderson to enable him to work full-time for the National office. In the light of the conclusions already expressed, it is not necessary to decide that question but it may be desirable to express an opinion on the question of the powers of the SMC.
In my opinion a meeting of the SMC had no power under the rules to carry a resolution that Mr. Henderson will work full-time for the National office for a very lengthy period of time, extending beyond the end of 1990 (cp. the finding made as to the content of the arrangement).

The respondents sought to gain support from v

Cooney (unreported - 11 December 1986). However, as the reasons for judgment pointed out, in that case there was a rule which expressly stated that:

"The Secretary shall be ... allowed such leave of absence as the Federal Council may determine."

The respondents also sought to rely upon the power conferred by Branch Rule 23(3)(b), which reads as follows:-

"(3) Subject to these rules, the S.M.C.
shall:
...
(b)	Take such steps as it shall think fit to carry out within the State all or any of the aforesaid objects of the Union, to consider all business referred to it and to decide all cases or contingencies for which no provision is made in these rules, including retrenchment."

It will be noted that that power is "subject to these rules". Branch Rule 29 includes the following provisions:-

resume duties, or should he refuse to be examined the S.M.C. may declare the position vacant.

(9) Long service leave for full-time after each ten years service and to be retrospective to apply to present officials." officials shall be thirteen (13) weeks

It will be noted that that rule sets out in considerable detail the entitlement of the full time paid officers (including Mr. Henderson) to various types of leave, including annual holiday (sub-rule (2)), sick leave (sub-rules (6), (7) and (8) ) and long service leave (sub-rule (9) ) . Sub-rule 29(8) expressly confers upon the SMC the power to declare vacant the position of any of the full time paid officers, specified in sub-rule 29(1), who, by reason of sickness or disability, has been absent from his duties for a period of six months, if his doctor reports "that he is unable to resume duties". The power conferred by Branch Rule 23(3)(b) must be read in the light of the rules and in my opinion sub-rule 29(8) is significant as a provision that six months is the

period of absence (for illness or disability) after which "the

SMC may declare the position vacant".

Having regard to the Branch Rules, including Rule 26(3), which is set out earlier in these reasons and Rule 29, in my opinion the SMC's power under the Branch rules to carry a resolution granting leave to a Branch Secretary is limited. Having regard to the submissions which have been advanced I should say that, in my opinion, the SMC does not have power to grant to the Branch Secretary:-

(1)	who is "through illness ... unable to carry out the duties ...", sick leave on full pay for a period in excess of that referred to in Branch Rule 29(8);
(2)	paid long service leave in excess of that to which he is entitled under Branch Rule 29(9);
( 3 )	"annual holiday on full pay" for a period in excess of four weeks (see Branch Rule 29(2)).

Apart from those limitations on the powers of the SMC, in my opinion the SMC does not have the power to grant to a Branch Secretary leave without pay to attend an overseas University for a period of one or two years nor to grant paternity leave without pay for a year - to take two examples given by senior counsel for the other respondents. Persons employed under awards made under the Act may have an entitlement to paternity leave by award of the Australian Industrial Relations Commission. However, Branch Rule 26(3)

plainly requires that the Branch Secretary "shall devote the whole working time to the business of the Branch". Presumably

that sub-rule flows from the view that the members who elect - and contribute towards the salary of - a Branch Secretary are entitled to the benefit of his full time service, no matter how desirable it may be in his view (or the view of the SMC) that he should improve his education overseas or should make a greater contribution to the upbringing of his child.

In my opinion the SMC does not have the power to grant to the Branch Secretary leave to be "absent from normal duties" (Branch Rule 23(2)) in order to enable him to "work full-time for the National office" for (say) three months. The power conferred by Branch Rule 23(2) on the SMC to "select

... one Assistant Secretary to act as the Branch Secretary

whilst the Secretary is absent on leave", is limited, in my opinion, to cases where the Branch Secretary is "absent on leave", granted by the SMC in the exercise of its powers under the Branch Rules, a power which is limited in the manner already described.

I hereby certify that this and the preceding seventeen pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Keely delivered 3 August, 1990.

Associate:  G- M

Date: 3 August, 1990.

ATTACHMENT A

Date of Hearng	4 and 18 July, 1990
Solicitors for Applicants	Harry Nowicki & Co.
Counsel for Applicants	Mr. H. Borenstein
Solicitors for Second

Respondent Ryan Carlisle Thomas

Counsel for Second

Respondent Mr. M. Bromberg

Solicitors for the lst, 3rd,

4th, 5th, 6th, 7th, Eth,

loth, llth, 12th, 13th,
16th, 17th and 18th

respondents Taylor & Scott

Counsel for the lst, 3rd,

4th, 5th, 6th, 7th, Eth,

loth, llth, 12th, 13th,
16, 17th and 18th

respondents Mr. J. Shaw Q.C. and

Mr. W. Friend