Prichard, Michael Anthony v Krantz, Harry David

326

IN THE FEDERAL COURT OF AUSTRALIA )

)

SOUTH AUSTRALIA DISTRICT REGISTRY

SAG No. 8 of 1983

INDUSTRIAL DIVISION

)

EX TEMPORE JUDGMENT

)

REVISED FROM TRANSCRIPT

)

BETWEEN: MICHAEL

ANTHONY

PRICHARD

(Appellant)

m: HARRY DAVID KRANTZ

& ORS

(Respondents)

Coram:

Smithers

ACJ, Keely and Gray

JJ.

7 September 1984

Smithers ACJ.: In this matter

we have found it unnecessary to

call upon counsel for

the respondents.

I make the

following comments on my own behalf. This is an appeal

from

decision of his Honour Mr. Justice Northrop

dismissing an application for an order under section

141

of the Concil?ation and Arbitration Act

1904

that the

respondents observe the rules of the organization of the

Federated Clerks

- Union of Australia by recognizing and

treating the applicant as a member of the organization

and directing the respondents to treat the decision of

the South Australian State branch executive of

1 August

1983 purportedly

purging

the

applicant's,

now the

appellant's, name from the register of	members as void
and of no legal effect.

According to

the notice of appeal, the appellant

contends that his Honour erred:

1. in finding that the witness Krantz was a witness of truth;

refraining

from

making

a finding

that

the respondent Krantz acted in bad faith in

relation

the

matter

concerning

the

removal of the appellant's name from

the

July and August

1983 in relation to the

proceedings which culminated in

the removal

of the name of the appellant

from the

3. in refraining from finding that:

(a)	the appellant was denied natural

justice

relation

the

proceedings which culminated in

the removal

the name of the

appellant from the register	of
members ;

(b) that Krantz was activated

by bias

against the .appellant

and. was

activated thereby in relation to

such proceedings.

4. That rules

11, 17, 18 and 19 off end the

provisions of

S. 140

( 1).

His Honour found that Mr. Krantz was

a witness of truth

and was not activated

by bad faith or bias against the

appellant in relation to the removal

of his name from

the register. His Honour saw and heard the respondent

Krantz and thus was in

a position that this court is not

in to assess his credibility.

find nothing in the

evidence which would incline me to question his Honour's

assessment of the credibility of Mr. Krantz.

It is

said that the two items of evidence

which should

persuade

us that Mr. Krantz' evidence was untruthful

were, firstly, that Mr. Krantz stated in evidence that

the transcript of the actual finding of Mr. Justice

matt in matter number 9

of 1982 was not available to

him or his executive until some

days after 1 August

1983. Secondly,

that

was

uggested

that

circumstances show that the portion of transcript said

not to

be available must have been available contrary

what Mr. Krantz

had

said.

. .

Reliance was placed on the circumstance that when the

original of the letter of 1 August 1983 from Mr. Krantz

to the appellant was tendered in evidence in this case

by the appellant, it had pinned to

it the relevant

portion of the transcript. But there is no evidence

when that portion of the transcript was first pinned

the letter. The appellant did not say it was appended to the letter when he received it and there is nothing else to suggest that. In the result nothing has been

advanced which could possibly persuade me that

Mr.

Krantz was untruthful in any respect. On the contrary

the probabilities would point

to the likelihood that the

assessment of Krantz made by the learned judge as a

truthful witness

was a

sound one.

It	is said that bad faith appears from a number of

factors:

(a) Proceedings

under r.11 were

commenced

the respondent before judgment was given by

Mr. Justice matt in matter No. 9 of 1982.

It is said that this

was done to exclude

the

appellant

from

properly

defending

himself under r.11 because the

days

would expire before the anticipated date

when judgment was to be given

or might have

been given. It is said that during the

days it might have been

a contempt of court

for the respondents

or the appellant to

canvass,

between

each

other,

the

appellant's

eligibility

for

membership,

this being one of .the

.-issues . before Mr.

Justice Evatt in matter No.

9 of 1982. It

is said this was

a deliberate "ploy" by Mr.

Krantz to deprive the appellant of the

opportunity to put his case on the question

of eligibility when it arose under r.11.

(b)

It is further said that the appellant did refrain from putting his case pursuant to the provisions prescribed by r.11 because he considered the exercise might involve a contempt of court.

( C )

It	is also said that the mere fact that

Krantz and

the executive took steps

remove

the

appellant

from

the

before the judgment of

Mr. Justice Evatt

was given and,

in effect, swiftly after the

evidence

that

case

was

given,

demonstrated

mala

fides

against

the

appellant on the part of Xrantz and the

other respondents and that in purging the

. .

appellant they acted not because

he was

ineligible to be a member but because they

felt maliciously towards him.

Taking this last item first, it may be said it is likely on the evidence that the respondents were troubled by

the activities of the appellant in his capacity	as a
member of the organization and were disposed to purge

him from membership if in fact and in law he were not

eligible

be a

member,

and

they

would

feel

satisfaction if that were achieved. But that is a long way from establishing that purging him from membership

when

he was ineligible for

membership

was

a mere

exercise in private personal animus.

If the appellant was not eligible for membership

it was

appropriate for the respondents to remove his name from

the register of members and to do

forthwith. That

they took steps

to do this is evidence that they removed

his name because it was undesirable that a

person not

eligible for membership should stand in the position of

a member with rights as such in

an organization. And it

is nonetheless

so because various of the respondents

miqht have been very relieved that the appellant was

entitled to be

a member, or even to feel satisfied that

a person, personally disliked by them, had ceased to be

a member.

- This is the kind of exercise in

which the

feelings of union officers have little significance. It

was not like a case where a charge	of misconduct was
laid.

It’ was a

plain question of fact that was involved.

Where a person is ineligible for membership it is

appropriate for those who are well disposed to him to

take the necessary action,

less than it is the

pleasure of those ill disposed also

to take such action.

to the time factor it is

be observed that the

respondents had made clear in matter

No. 9 of 1982, that

they considered the appellant ineligible for membership.

In that action they had heard the evidence of the

appellant

relevant

facts.

That

evidence

ultimately induced the learned judge to pronounce that the appellant was ineligible for membership. The

respondents formed

their own view that the appellant was

ineligible for membership and Mr. Krantz pointed out in

his letter

of 13

July 1963

to the appellant that the

executive had taken that evidence into account.

Mr. Krantz and the rest of the executive were no doubt encouraged by the evidence to believe that the learned

judge would find in their favour on the issue and

were

entitled to and indeed may well be thought to have been

under a duty to act promptly.

The fact that

he and they

did so

is not evidence of malice but evidence that in

the case of the appellant they did not deisre him	to
have the privileges of membership if inepigible for

membership.

So far as there is a suggestion that

the

appellant refrained from putting his case within

14 days

on the ground of'- contempt of

court,^ this is just not

true. It is clear from

his solicitor's letter of

July 1983 that

he did not intend to respond at any

time, whether before or after judgment was given in

matter No.

9 of 1982.

In short there is no merit in

this appeal.

In relation to the issue of whether rr.11,

17, 18 and 19

are

oppressive

and

that

hose

rules

impose

upon

applicants for membership

the

rganization

conditions, obligations,

or restrictions which, having

regard to the object of the Act and the purposes of

registratlon

and

organization

under

this

Act,

are

oppressive, unreasonable and unjust. At the hearing

before us only r.11

was seriously attacked. The way in

which the appellant's case may be most strongly put on

this issue is encapsulated in the observation that an

executive, acting reasonably and honestly, may wrongly

assess the character of the employment of the person,

namely the member concerned. In such

case a member

might wrongly

lose his membership.

This is a risk inherent in the rule. Nevertheless it

reasonable that there be

a mechanism in the organization

by which persons whose eligibility has come to

an end

may

expunged

from

the

membership

roll.

Such

mechanism might provide that when in fact eligibility

has ceased, the executive-may remove his

name. It is to

be observed that in the operation of the rule there will

be no

action taken to actually purge the name of the

meinber concerned unless it appears to the executive that

eligibility has ceased.

9 .

In my view

that

involves

that

the

executive

give

consideration to the facts before it and any facts

brought to its notice by the member and that it shall

form a conclusion upon those facts.

The rule operates

in conditions stated in r.ll(d), that the member be

given notice of the intention of the executive to remove

his name, and in r.ll(e) that the member shall have 14

days to show cause why this should not be done. Whether

the rule is oppressive or not within the meaning of

5.140 or otherwise offends s.140(1) is to be decided by

reference to the objects

of the Act and the purposes of

registration of the organizatlon under

the Act.

Relevant consideratlons are that provisions for keeping

the roll in order are reasonable; the criterion

for

removal is appropriate, namely

loss of eliglbillty; and

the rule cannot operate without notice being given to

the person concerned and an opportunity being extended

to him to bring all relevant considerations to the

notice

ex cutive.

The rule

requires

consideration

of all relevant

facts.

Further,

the

member is not without a remedy under the rule if

error is made. If

an error were made dishonestly or in

circumstances

inswhich the conclusion reached by the

executive could not

have been properly drawn by a body

properly performing its function, there would be a

remedy under S . 141 of the Act. If it was reached on the

evidence honestly but erroneously there would be a

10.

remedy under

5.144.

That is not to say that wrongful

purging of the roll would not disadvantage the member in

his

membership.

deciding

such

circumstances

whether the rule is to be considered to be oppressive or

to impose conditions on members which are oppressive,

unreasonable or unjust, the competing requirements

reasonable management of the organization and reasonable

entitlements of a member must be taken into account.

In view of the fact that the only real disadvantage to

member is that the executive may honestly misjudge the

issue, it seems to me that, having regard to the

objectives of the Act and

the

purposes of registration

organizations,

r.11

should

not

regarded

oppressive, unjust

or unreasonable.

In the case of

a rule providing that the name of a

member should be removed

if, in fact, his eligibility

has ceased, the actual operation

of the rule would

depend on a decision

of the executive.

Such a rule

would be immune from

an attack under s.140(1). The

margin of disadvantage to a member between such a rule

and one	in the terms of r.11 is in my opinion very
slight.

Accordingly, having regard to

all the circumstances,

that rule should not be regarded

as offending 5.140, as

be'ing one imposing upon members conditions, obligations

or restrictions which, having regard to the object

11.

the Act and the purposes of the registration

of the Act

are oppressive, unreasonable or unjust. I would dismiss

the appeal.

I am

aware

Mr.

Justice

Gray

will deliver

some

observations

dealing

with

the

question

of natural

justice and I am aware what those observations are and

desire to say that

I agree with them.

If the matter depended entirely on the natural justice

and bias aspects of the case, we would seriously have

considered Mr. White's application for costs, but having

regard to the fact that there was the outstanding

question of the validity of r.ll(aI(3) in particular,

feel it would be wrong to say in the words

of 5.197 of

the Act, that the proceeding was instituted without

reasonable cause, within the meaning of	those words in
that section.

I N THE

FEDERAL

COURT

AUSTRALIA

SOUTH	AUSTRALIA	DISTRICT	REGISTRY	) S.A.	No. 8 of 1983
)

INDUSTRIAL DIVXSEON

,* 8 . , I

.; 4

BETWEEN :

MICHAEL ANTHONY PRICHARD . .

- .

( A p p e l l a n t )

AND :

HARRY DAVID KRANTZ ti ORS.

( R e s p o n d e n t s )

C O W : SMITHERS

A.C.J.,

KEELY

and

GRAY JJ.

DATE : 7 SEPTEMBER, 1984

REASONS

FOR

JUDGMENT

KEELY J.

I agree that the appeal m u s t be d i s m i s s e d .

I n my

opinion, the appellant has failed t o m a k e o u t any of

the

grounds

the

appeal.

M r .

Justice N o r t h r o p i n his

w r i t t e n

reasons for judgment said :

"None

the m e m b e r s of

the B r a n c h Execut ive acted

m a l a fide"

and, i n another passage,

j u s t i f y a f ind ing of bias .aga ins t the respondent

' I . . . there is no basis and no facts proved to

K r a n t z or against any of the other respondents,

members of the B r a n c h Executive,!'. I

L .

In my opinion, nothing has been put before this court to support a contention that either of those findings of fact was not open to the learned trial judge and his Honour was quite entitled.,to reach those conclusions.

As to rule

11 (a) (31, in my opinion the words "who

appears to be" do not mean

"who in the opinion of the Branch

Executive is". The words in the sub-rule "who appears to be

no longer covered by the Constitution" are not intended to

convey the meaning that the matter is concluded and beyond

challenge if it be established in the opinion of the Branch

Executive. If there is any abuse of the power conferred by

the sub-rule it would, of course,

.be

open to challenge in

proceedings

this

court

under

section

141.

rule

ll(a)(3) is construed in the way

I have suggested, then in my

opinion it is not contrary to section 140 (1) (a) of the Act,

nor is it contrary to section 140(l)(c).

I	agree generally with the reasons for judgment

given by the Acting Chief Judge and, like him,

I am aware

that

Mr.

Justice Gray is about to make certain additional

observations, and

I agree with those additional observations.

The appeal should be dismissed.

.-.

- m..

f- ---	:
! f L.	i -
I

5 ,

i, .

IN THE FEDERAL COURT OF AUSTRALIA

) )

SOUTH AUSTRALIA DISTRICT REGISTRY

S . A . No. 8 of

1983

)

INDUSTRIAL DfiISION

)

BETWEN

MICHAEL ANTHONY PRICHARD

Appellant

AND :

HARRY DAVID	KRANTZ & ORS
Respondents

CORAM: SMITHERS A.C.J.,

KEELY AND GRAY JJ.

7TH SEPTEMBER

1984

EX TEMPORE REASONS FOR JUDGMENT

GRAY J. :

I am	in general agreement with the judgment which the

Acting Chief Judge has delivered on the question

of alleged bad

faith.

I desire to add some comments of my own on that question

and to deal

with the issue

of natural lustice.

The power given by rule ll(a)(3) of the branch rules

the Federated Clerks Union of Australia,

sub~ect

to rule ll(d),

given

for

a purpose, namely the purpose of ridding the

rganizati

,on of

members

who

are

longer

eligible

for

membership.

In the ciydmstances of thls case the power was

exercised for that purpose.

The fact

that

its exercise may

- I..

possibly. suit some or

all of the members

of the executive for

other reasons	is not enough to vitiate the decision exercislng
the power.

The trial judge expressly found that no malice or bad

faith

existed.

Wqi have been asked to draw inferences from

certain facts and to overturn his Honour's assessment

Mr.

Krantz as a

witness,

and,

accordingly,

overturn

those

findings.

It was argued that the sending of the letter of

Mr.

Krantz dated 13th July 1983, while the controversy as

the

membership of

Mr. Prichard was before the Court constituted by

Evatt J., showed an intention to purge

Mr. Prichard, lrrespective

of the result of the court proceedings. But by 13th

July, Mr.

Prichard had given evidence before Evatt J., and the branch

executive was entitled

to take the provisional vieu which it took

under rule ll(a)(3), and to put in train the procedure laid down

in rule ll(d), on hearing of such evidence. The action

of the

executive was consistent with the discovery	of the true facts
from such evidence.

Next it was argued

that the timing of the meetlng showed

bad faith. The decision of Evatt J. was given

on Friday, 29th

3 .

July

1983 and the meeting

was held at

a.m. on Monday, 1st

August

1983.

Northrop- ff. accepted the reasons given by

Mr.

Krantz for the haste in calling that meeting. Nothing has been

put before us to show that his Honour was wrong in making that

finding. The provisional view which had been taken by the branch

executive was fortified by the decision of Evatt

The letter

from

Mr.

Prichard’s solicitor, dated 21st July

1984, could

properly be

taken as an indication that Mr. Prichard placed hls

faith in

the Court; and did not Intend to participate in the

processes laid dawn by the rules. In these clrcumstances, no bad

faith was shown

by continuing those processes.

It was also suggested that Mr. Krantz misled the branch

executive by reporting

on 1st August 1984 that the Court had held

that Mr. Prichard was no longer a member

of the organization. In

fact, Evatt

J. had discharged a Rule to Show Cause which sought

to compel the respondents

o it to treat

Mr. Prichard as a member

and accept dues from him. His Honour had done

so on the express

ground that

Mr. Prichard was not ellgible to be

a member. In

those circumstances, as a layman’s description	of	the Court’s
order, Mr. Krantz’s report was not inaccurate.

In my

view, no ob~ection could be taken to calling on

Mr. Prichard under rule ll(d) while the proceedings before Evatt

J. were part heard.

No prejudlce to Mr. Prichard could arise

from that course.

could safely be assumed that

had put

forward his best case to the Court. His evidence, including

I .___

---

cross-examination, had been completed.

In any event, it was open

to Mr.

Prichard to place any further material he desired before

the branch executive.

. S

The principles

of natural lustice are concerned with

fairness in all of the circumstances. They at-e applied by way of

implicatlon in the rules

an organization. Like any other

implication they are sublect to the express provisions of the

rules. They cannot,joverride those express provisions.

If rules

of an orgabization are to

disregarded, they are only to be

by reference

to S. 140 of the Concillation and Arbitration Act

1904, and not by reference to any supervening rules	of natural
justice.

Rule ll(d) of the branch rules lays down a procedure

t o

be followed by the branch executive before purging a

member.

This	procedure involves notice by the executive to the member

concerned of the provislonal intention to remove his or her name, and specification of the grounds on which such removal may take

place. Rule ll(e) gives

an opportunity to

the member concerned

to be

heard.

is not contended in

this case that the steps

required by rule

11 were not carried out in accordance with that

rule.

The argument for

the Appellant is that, notwithstanding

compliance

with

the rule,

was

effectlvely

denied

opportunity to be heard because the notice was served on hlm

while the proceedings before Evatt

J. were current.

As I have said, no prejudice to the Appellant arose from

the timing of the letter

13th July 1983. The decision not to

be heard c7as the Appellant's own.

Some argument was put that once Evatt J. had announced

his decision on 29th July 1983, the branch executive should have

taken steps to give the Appellant a further opportunity to be

heard. This would have involved the adoption of a procedure

other than that pr$ded

for in rule 11. Having regard to

the

letter of

21st July 1983 from the Appellant's solicitor, and to

the decision

Evatt J.,

the action of

the executive of 1st

August 1983 did not constitute

a denlal of

an opportunity to be

heard. There was no unfairness to the Appellant

in all

of the

l	circumstances.
l
I

Argument was also put on the question of alleged blas on

the part of the members of the branch executive, particularly Mr.

Krantz.

The proper test in a case such as this is whether

a real

1 1

I	likelihood of bias existed; see the Full Court declslon in	Cams
t

v. Jenkins

(1979) 42 F.L.R. 188. Northrop J. at

the

trlal

rejected the allegations of bias.

I am unable to say that this

conclusion was wrong

on the evidence.

The

Appellant's

argument

was

largely

based

on the

involvement of

Mr. Krantz in the litigation before Evatt

J., in

which the question of

Mr. Prichard's entitlement to membership

was ralsed, the timing of events, the

alleged misleading by Mr.

6 .

Krantz of

the executive on 1st August 1983 and participation by

Mr. Krantz in the decision

of the executive.

Mr. Krantz having heard the evldence

of Mr. Prichard In

the proceedings before Evatt

J., it was proper for him

to put

that before the branch executive,

As I have said previously,

there was nothing improper about the timing

events and no

mlsleading of the executlve. In a sense, rule

11 makes the whole

branch executive both prosecutor and judge in every case to

whlch

it applies, but there are differences between this sort

of case

and those in	whlch	a member is charged with some offence laid	< ,
I

down under the rules. Nothing in the evidence discloses any

likelihood that Mr. Krantz or any other member

the brancyi

executive who participated	in the decision was invmcibly biassed
in the sense referred to	In Australian Workers Unlon v. Bowen

(140.

2 ) (19.28) 77 C.L.R.

601, and in the Full Court judgment in

Cains v. Jenkins, referred to above. It

is not to be supposed

that, if Evatt J. had reached the opposite conclusion, or if Hr. Prichard had changed his job CO one within the ellglbllity rules

of	the organizatlon, the executive would have proceeded to the

same decision

as it did

on 1st August 1983.

I am	also m agreement with the Acting Chief Judge on

the question of rule

11 of the branch rules of the organization.

I agree that the appeal should be dismissed.

I c e r t i f y that

this and the

preceding pages are

a true copy of the

Reasons for Judgment herein of his

Honour Mr. JusticeCO+(

[1984] FCA 326

7 Sep 1984