Rayner v Ellery

Case

[2016] FCA 771

1 July 2016


FEDERAL COURT OF AUSTRALIA

Rayner v Ellery [2016] FCA 771

File number: VID 342 of 2016
Judge: JESSUP J
Date of judgment: 1 July 2016
Catchwords: INDUSTRIAL LAW – Registered organisation – Performance and observance of rules – Division of functions as between national council and branch – Branch autonomy – Proceeds of sale of real estate – Whether under control of national council – Whether available to fund redundancy benefit for branch employee – Whether branch officers obliged to comply with national council resolution.  
Legislation: Fair Work (Registered Organisations) Act 2009 (Cth) s 164
Cases cited:

Country Roads Board v Neale ADS Pty Ltd (1930) 43 CLR 126

Foley v Padley (1984) 154 CLR 349

Date of hearing: 9 & 10 June 2016
Registry: Victoria
Division: Fair Work Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 60
Counsel for the Applicant: Mr H Borenstein QC with Mr T Borgeest
Solicitor for the Applicant: Slater and Gordon
Counsel for the Respondents: Mr M Harding
Solicitor for the Respondents: Ryan Carlisle Thomas

ORDERS

VID 342 of 2016
BETWEEN:

GREG RAYNER

Applicant

AND:

JOHN ELLERY

First Respondent

KELVIN WELBOURN

Second Respondent

SUSAN RILEY (and others named in the Schedule)

Third Respondent

JUDGE:

JESSUP J

DATE OF ORDER:

1 JULY 2016

THE COURT ORDERS THAT:

1.The respondents perform and observe the Rules of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia by refraining, in compliance with the resolution of the National Council of the Union on 6 April 2016, from making any payment to Ms Trish Willoughby as a termination payment on redundancy from the Branch's Industry Fund Portfolio Service investment.

2.Otherwise, the application be dismissed.

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


REASONS FOR JUDGMENT

JESSUP J:

  1. In this proceeding the applicant, Greg Rayner, seeks orders pursuant to s 164 of the Fair Work (Registered Organisations) Act 2009 (Cth) (“the RO Act”) giving directions for the performance and observance of the rules (“the Rules”) of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“the Union”). He is the National President of the Union (an honorary position) and is the Secretary of the Communications Division (“the Division”) (a full-time position to which he was elected on 1 August 2015). The first respondent, John Ellery, is the Secretary of the Victorian Telecommunications and Services Branch (“the Branch”) of the Division, and the remaining thirteen respondents are the other members of the Branch Committee of Management (“the BCOM”).

  2. The applicant makes two broad allegations in the proceeding.  First, he says that the BCOM was not acting within its powers under the Rules when, on 21 July 2015, it endorsed a policy on employee entitlements which, amongst other things, tied the entitlements of employees retrenched on account of redundancy  to those that were accorded to the employees of Telstra Corporation Limited (“Telstra”).  He says that the purported exercise of power by the BCOM was void because it was not done “bona fide for the purposes for which [the power was] conferred”:  Allen v Townsend (1977) 31 FLR 431, 483. He alleges that the purpose of the adoption of the Telstra standard in relation to redundancy payments was to deliver a special benefit to a long-serving administrative employee, Trish Willoughby, the employment of whom, it was then anticipated by Mr Ellery at least, would soon be terminated by reason of the redundancy of the position which she occupied. It is said that the power was not exercised, as was the BCOM’s obligation under the Rules, in the interests of members of the Branch.

  3. Secondly, the applicant says that the BCOM has refused to act in conformity with a resolution of the National Council of the Union made on 6 April 2016, whereby it gave certain directions to the BCOM in relation to the latter’s intention, expressed by resolution made on 25 November 2015, to source the cash for the redundancy payment to be made to Ms Willoughby from a fund which represented the present-day proceeds of the sale of a Union property in Collingwood in 2006.  The respondents accept that the BCOM did not act in conformity with that resolution.  Their defence to this aspect of the applicant’s case is that the subject of the resolution on 25 November 2015 was not something in respect of which the Branch was subject to the control or supervision of the National Council under the Rules, and that the directions purportedly given on 6 April 2016 were beyond the power of the National Council.  The applicant does not challenge the validity of the BCOM resolution on 25 November 2015 as such.

  4. The Union is an organisation of employees registered under the RO Act. It is the result of a number of amalgamations of such organisations which have occurred over the years. One of its roots was, originally, the Postal Telecommunications Technicians Association. In about 1976, that association changed its name to the Australian Telecommunications Employees Association. It was in 1976 that Ms Willoughby was engaged as a casual in the Victorian branch of that association. In about 1978, she became full-time, with the title of Administration Officer. Her duties included answering the telephone, referring members’ queries to the appropriate staff member, arranging meetings as directed by officials of the branch, printing documents, packing envelopes, word processing and filing. She reported to the secretary of the branch.

  5. Subsequently, the Australian Telecommunications Employees Association amalgamated with the Australian Telephone and Phonogram Officers Association and, in August 1992, the amalgamated association amalgamated with the Australian Postal and Telecommunications Union to form the Communication Workers Union of Australia.  In August 1994, that union, in turn, amalgamated with the Electrical, Electronic, Plumbing and Allied Workers Union of Australia to form the Union.  Members of the former Communication Workers Union were, upon amalgamation, allocated to the Division.  Through all of these changes, Ms Willoughby retained her employment in what had originally been the Victorian branch of the Australian Telecommunications Employees Association and which ultimately became the Branch.

  6. According to the evidence of Kevin Fothergill, then the secretary of the Victorian branch of the Australian Telecommunications Employees Association, the setting of the terms and conditions of employment for clerical, administrative and support staff was his responsibility.  His practice was to align those terms and conditions with those applicable to employees of Telecom Australia (“Telecom”), which was the employer of most of that association’s members.  He aligned Ms Willoughby’s salary with that of the Telecom “Technician” classification.  She would also have had her leave entitlements determined in accordance with those prevailing at Telecom.

  7. Mr Fothergill said that, at the time he employed Ms Willoughby, there was no “redundancy or retrenchment standard” in respect of employees of Telecom. Save in the case of telephone exchange operators who were affected by job losses due to the automation of telephone exchanges, there was no such standard until the late 1980s or the early 1990s.  Redundancy and retrenchment were not features of the telecommunications industry at the time that Ms Willoughby was employed;  nor were they features of employment by the then Australian Telecommunications Employees Association, which was growing. 

  8. Mr Fothergill resigned from his office as secretary of the Victorian branch of the Australian Telecommunications Employees Association in 1994.  His successor was Len Cooper, during whose time as Branch Secretary Ms Willoughby was, in effect, his administrative assistant.  She did his typing, she answered telephone calls that came in to the Branch both for him and generally, she arranged for meetings of members and typed the minutes of these meetings and of meetings of the BCOM, she did Branch filing, she laid out the Branch newsletter and arranged for it to be sent to members, and she typed and distributed media releases as required.  According to Mr Ellery, due to her long experience in the operations of the Branch office, Ms Willoughby had “some latitude in arranging her work on any given day, unless directed otherwise.”  There was no written statement of her duties.

  9. In August 2006, the Union sold a property which it owned in Cromwell Street, Collingwood for the sum of $3m.  Originally, the building had been purchased jointly from funds held by the Branch and the Victorian Postal and Telecommunications Branch of the Division.  The Branch's share of the proceeds was $1.5m less costs.  The sale was the subject of the following resolution of the Divisional Executive, taken by a postal vote which concluded on 20 February 2006:

    That National Council endorse the sale of 67-71 and 58 Cromwell Street, Collingwood for an amount of $3,000,000.

    Further, that the funds from the sale be invested in accordance with the union’s rules, in secure long term investments following independent expert advice and that the income generated, less a component equal to the relevant annual ABS, CPI index, be available to the Victorian P&T and T&S Branches for accommodation expenses and for membership growth.

  10. On 3 March 2006, there was put to the National Council, for voting out of session, it seems, a resolution in substantially the same terms as those set out above.  Mr Cooper cast his vote in favour on 6 March 2006.  The motion was declared carried by a facsimile message sent to members of the National Council on 16 March 2006.  In the meantime, there had been a meeting of the National Executive of the Union on 10 March 2006 at which the following resolution was passed:

    That the properties at 58, 67, 71 Cromwell Street, Collingwood, Victoria, which house the P&T and T&S Divisional Branches be sold. 

    The proceeds from the sale be invested in accordance with the union rules in a secure long term investment, following independent financial advice and, the income that is generated less a component equal to the relevant annual ABS CPI index will be available to the Victorian P&T and T&S Divisional branches for accommodation expenses and membership growth. Further that the outcomes from this resolution be reported in the Branches financial accounts and a report be given to the annual National Council Meetings. 

  11. A further resolution of the Divisional Executive, passed on 14 July 2006, was as follows:

    That further to Divisional Executive Decision 06/20 on the sale of 67-71 and 58 Cromwell Street, Collingwood, Divisional Executive resolves:

    That the Victorian T&S Branch retain as Branch funds the proceeds of the sale that exceed the booked value amount transferred from the Divisional Special Fund for the property.

    That to meet the requirements of National Rule 6.2.1.5 the Victorian P&T and T&S Branches’ invested funds from the sale be considered as available to meet officials and employees employment entitlements, if a need arises.

    Further, the Divisional Executive recommends to the Victorian Branches that part of the investment be nominated as an investment to cover a provision for employee entitlements.

    “Divisional Executive Decision 06/20” was the resolution of 20 February 2006.  I shall refer to rule 6.2.1.5, and other relevant rules, in due course below.

  12. In August 2006, the sale of the Cromwell Street property settled, and the Branch deposited the sum of $1m into an interest bearing bank account.  There is no evidence as to what happened to the balance of the settlement sum received by the Branch.

  13. By resolutions passed at the National Council meeting held over the period 23-24 November 2006, the minutes of the meeting of the National Executive meeting of 10 March 2006, in which the resolution referred to above was set out, were received and adopted. 

  14. In in 2008 the Branch deposited the sum of $1m (presumably from the account referred to in para 12 above) into what Mr Ellery described as “a special investment program”, following professional financial advice.  There was thus created what he described as “the Industry Fund Portfolio Service Fund”, also in this proceeding referred to as the “investment fund”.

  15. In evidence are the minutes of a meeting of the National Council on 21 March 2014.  In the recitation to a resolution then passed, the minutes referred to earlier resolutions passed by the National Council in March and November 2013, generally on the subject of the finances of the Branch and of the Victorian Postal and Telecommunications Branch, and with specific reference to the then circumstances of the proceeds of the sale of the Cromwell Street property.  The recitation referred to correspondence of 18 December 2013 from Mr Cooper, then the secretary of the Branch, in the following terms:

    a.Mr Cooper now claims that the resolution, insofar as it places restrictions upon the use if the proceeds of the sale, was beyond the power of National Council;

    b.Mr Cooper confirms that the Victorian T&S Divisional Branch has not invested the proceeds from the sale as required by the Authorising Resolution;

    c.the Victorian T&S holds $611,321 in a “special investment programme” with Industry Fund Services, with this in essence being the balance of the sale proceeds from the sale of 58, 67, 71 Cromwell Street, Collingwood, and

  16. The National Council (ie on 21 March 2014) expressed its “strong concern” with the state of finances of the Branch, with the need for the Branch to have sufficient funds for the future purchase of real property in which to accommodate the Branch and with “the apparent serial non-compliance”, by Mr Cooper and the Branch, with the resolutions of the National Council and the National Executive in 2006 which authorised the sale of the property.  The National Council passed three resolutions, one of which was the following:

    The National Council resolves that, until such time as the balance of the funds held with Industry Funds Services (“the IFS Investment”) is at or greater than $1,481,250;

    1.that there be no expenditure, other than ordinary fees, from the IFS Investment without the prior approval of National Executive;

    2.the National President of the CEPU shall be the sole person registered with Industry Fund Services to authorise expenditure from the IFS Investment.  If joint authority is required by the relevant financial institution, the National President and National Vice President shall be the sole people with such authority;

    3.the National President shall provide monthly statements to the members of National Executive, or, where statements are not available, extracts detailing the full transaction history for the Investment Account for the preceding month.

  17. In August 2014, Mr Cooper resigned as Secretary of the Branch, and Mr Ellery assumed that office.  Mr Cooper was then employed, for three days each week, as an industrial officer.  He continued to be a member of the BCOM.  Mr Ellery had, as he put it in his evidence, “quite different work practices from Mr Cooper.”   He did his own typing, he took his own calls (often on his mobile phone), he drafted his own documents and emailed or posted them personally, and, together with Sue Riley (an industrial officer employed in the Branch and the honorary Assistant Secretary), he put together the newsletter and arranged for it to be sent to members by email.  As it happened, Ms Willoughby was absent for 39 days of sick leave in 2014, subsequent to the resignation of Mr Cooper.  It was Mr Ellery’s evidence that the Branch functioned adequately in spite of Ms Willoughby’s absence.  Other than what was done by himself and Ms Riley as here described, the Branch’s bookkeeper, Sharon Benson, absorbed much of the work that Ms Willoughby had been doing.  When Ms Willoughby returned from her sick leave, Mr Ellery, as he put it in his evidence, “struggled to allocate duties to her”.  He said that the Branch now had no need of the administrative support work which she had traditionally performed. 

  18. That was the situation as at about the start of 2015.  Under cross-examination, Mr Ellery had some difficulty justifying why he kept Ms Willoughby on staff beyond that time, when it was clear to him that she had little or no work to do.  To the extent that he was able to provide that justification, it was based on the proposition that the “little” work she did was of some importance nonetheless, and on Ms Willoughby’s continuing work, such as it was, for Mr Cooper, now a part-time industrial officer.  It was put to him that the main reason he kept her on was because of his reluctance to make such a long-serving employee redundant.  To the extent that Mr Ellery stopped short of accepting that, his evidence was, I would have to say, unconvincing:

    I have a small group of employees. We are what you might like to say, … as thick as – we are strongly supportive of each other, we have been so for many years, Trish has had a period of some – well, we’re talking 76-ish, a long period of time, and I’m someone who really takes loyalty as a prerequisite in my job.

    In the circumstances, the finding I make in this area of the case is that Mr Ellery had grounds to terminate Ms Willoughby’s employment as on a redundancy had he chosen to do so, but that he likewise had a colourable justification for his decision not to do at the start of 2015.  It was his loyalty to Ms Willoughby as a long-serving employee that most influenced him in allowing the status quo to remain in place.

  19. But he clearly had the possible redundancy of Ms Willoughby’s position on his mind.  Partly by reason of that, and partly by reason that he contemplated that Mr Cooper’s position too might soon become redundant (as it eventually did in August 2015), in July 2015 Mr Ellery recommended to the BCOM that it clarify the non-salary employment benefits of employees.  As I have already mentioned, Ms Willoughby’s salary had originally been aligned with that for the “Technician” classification in the employ of Telecom.  That had continued to be the case.  Records maintained by the Branch demonstrate that Ms Willoughby received the same percentage adjustment to her remuneration as, and effective on the same date as that relevant for, each pay increase to which members employed by Telstra were entitled under four enterprise agreements spanning the period from September 2005 to October 2015.  It also appears that, in the area of some non-money conditions, such as the nine-day fortnight and leave of various kinds, it was the established practice of the Branch to apply Telstra standards to the circumstances of its own employees.  But, in areas where there had been no practice, the entitlements of employees did not rest on such an established foundation.  Until the events which became controversial in this proceeding, the Branch had never terminated the employment of any employee as on a redundancy.  There had, therefore, previously been no occasion to consider whether the Telstra redundancy payment standard should be applied.  Mr Ellery wanted this aspect of Branch policy clarified. 

  20. In the result, a resolution in the following terms was passed by a meeting of the BCOM on 15 July 2015:

    Victorian T&S BCOM endorses a policy for employee entitlements for Branch employees that is consistent with Telstra EBA conditions currently applied.

    This means the following:

    1)        Nominal 36.75 hour week continues to apply.

    2)        RDO arrangements (9 day fortnight) continue to apply.

    3)Individual flexible working arrangements can be entered into based on personal circumstances, including part time working.

    4)        Redundancy entitlements as per the Telstra EBA.

    5)        Annual Leave (cumulative) 20 days per calendar year continues to apply.

    6)Personal Leave 15 days per calendar year (includes sick leave, carers leave, etc) as per Telstra EBA

    7)        Parental Leave, bereavement leave/compassionate as per Telstra EBA

    8)        Long Service Leave 3 months after 10 years.

    9)        Domestic Violence Leave as per Telstra’s current arrangement.

    This policy now over-rides any previous Branch policy on employment arrangements, and directs the Branch Secretary to formally advise Vic T&S Branch employees of these arrangements.

  1. The proposer of the motion that resulted in that resolution, the 13th respondent Maureen Parker, said in her evidence that Mr Ellery explained that it was his view that a reduction in Branch membership would mean that the BCOM “would have to take some tough decisions in the short to medium term that may reduce the number of staff on the [Branch] payroll”.  She said:

    The motion simply re-affirmed that the conditions for these staff were consistent with the terms and conditions of Telstra staff.  The purpose was to re-enforce what had been the custom and practice of the Branch for many years.  Given the increasing number of redundancies at Telstra (the employer of most of the Branch's members) and that the Branch itself may be under financial pressure due to a reduction in Union dues as a result, I was keen to ensure that there was no confusion about our Branch policy on the matter.

    Ms Parker also made it clear that the draft of what became the above resolution had not been distributed by Mr Ellery before the meeting.  Rather, the members of the BCOM, in their meeting, worked their way through the various items and effectively drafted the resolution as they went.  It was at a later meeting that the precise terms of the resolution were presented to them for the first time in the minutes of the meeting on 15 July.

  2. However, in July 2015 Mr Ellery had not yet reached the point of deciding that the Branch should dispense with the services of Ms Willoughby.  The first that the matter of Ms Willoughby’s diminishing workload was mentioned as between the two of them, it seems, was in August when Mr Ellery had a conversation with her about the problems he was having allocating her work.  According to his evidence (Ms Willoughby herself was not called), she agreed there was little work for her to do.  She said to him, “I am here five days but I am doing about two day’s [sic] work per week and it’s declining.”  That statement matched Mr Ellery’s own observations.

  3. It was not until November 2015 that Mr Ellery took any concrete step to resolve Ms Willoughby’s situation.  In that month, Mr Ellery concluded that the Branch did not require, and could not sustain, Ms Willoughby’s employment.  The financial position of the Branch made it necessary to reduce labour costs, and, as Mr Ellery put it in his evidence, “Ms Willoughby was the obvious candidate.”  He decided to recommend to the BCOM that Ms Willoughby’s employment be terminated as on a redundancy.  This recommendation, and the reasons for it, were presented by him, orally, to the meeting of the BCOM on 25 November 2015.  In the result, the following resolution was passed:

    An existing admin position (publications, media and membership services) be declared redundant, and the occupant advised that there is little prospect of any redeployment within the Branch.  As such, the opportunity to take a retrenchment package is to be offered.  This arrangement to be actioned as soon as possible, preferably with a view to exit the occupant, preferably at the end of the five week notice period, (i.e. end of December 2015).  Given the nature and size of leave (Annual Leave and Long Service Leave) and redundancy entitlements required to be paid out as a result of this decision, Branch Committee of Management directs the Branch Secretary [to] advise the Divisional Secretary and National Secretary of the requirement and intention to access funds to cover both this redundancy, as well as the previous leave (Annual Leave and Long Service Leave) entitlements paid out as a result of a previous industrial officer redundancy in late August, from the current invested funds managed by IFS. This notification to be given to the Divisional Secretary and National Secretary immediately.

    What Mr Ellery referred to as “the current invested funds managed by IFS” was the investment fund (see para 14 above). 

  4. Ms Willoughby was not notified of the BCOM’s intentions until she received a letter from Mr Ellery dated 16 March 2016, which, omitting formal and purely personal parts, read as follows:

    After analysing the financial position of the Vic T&S Branch, the Branch Committee of Management resolved to declare the position you occupy as being surplus.  Obviously, this decision is not an easy one to carry through, given the length of time you have been employed, and the close personal and working relationship that exists in this office.

    Our records indicate you were permanently employed 39 years ago (July 1976), by the then ATEA Branch Secretary, Kevin Fothergill, on employment conditions that reflected the then Telecom Australia (and subsequently Telstra) conditions of employment, as were all admin staff at the time.  Your current employment conditions reflect that original arrangement.

    I also have a November 2015 Victorian T&S BCOM decision that ensures that any termination arrangements due to redundancy reflect the Telstra EBA conditions that have been carried through since your employment commenced.  In the absence of any other policy on the matter at the Divisional level, I believe the appropriate arrangement is to provide the 80 weeks redundancy outcome (plus the appropriate notice period).

    Given the size of the Branch, there is little prospect of redeployment into any other job in the Branch.  I therefore advise, as the occupant of the identified position that termination as a result of a genuine redundancy circumstance, will occur shortly. I intend to advise the Divisional office that we will be utilising the invested funds for this redundancy payment, which I will process in the next few days.

    It is my intention to finalise the redundancy process for yourself early into the new financial year (ie into April 2016).  I will advise the Divisional Secretary of my intention to utilise special fund investment monies giving him 30 days [sic] notice, as previously advised to the National Secretary.  At this stage, I don’t anticipate any intervention on the matter, as it is the Branch’s decision, however I hope there are no complications.

  5. By letter dated 22 March 2016, Mr Ellery communicated with the applicant (as National Divisional Secretary) in the following terms (again, omitting formal parts):

    The Victorian T & S Branch maintains an investment with Industry Fund Portfolio Service.  The investment (i.e. the funds) was the subject of various items of correspondence between the Branch and the National Secretary in 2014.

    Originally, the Victorian T &S Branch Funds concerned were the result of an ongoing levy placed on ATEA members in 1976.  That levy provided a ‘special’ state branch fund, which amongst some other purposes was to sustain members undertaking industrial action.  Any other use of the fund was by Branch Committee of Management decision.  In order to further protect those funds, a joint property purchase was made at 71 Cromwell Street, Collingwood, by this ATEA ‘special fund’ in the 1990’s.

    A similar ‘federal council fund’ was also set up with the same objectives at the same time and provided the ATEA with funds to jointly purchase the 139 Queensberry Street, Carlton South  property.

    Arising from the correspondence referred to above, the Branch proposed that it would advise the Divisional Secretary in advance of the use of the funds with particulars, and provide a copy of that notice to the National Secretary.  This process was discussed with the Divisional Secretary at the time.

    The purpose of this letter is to advise that the Branch proposes to use part of the funds to meet the cost of a redundancy.  The funds balance as recently reported to National Council in November 2015 was $706,953. It currently sits at around $730,000.

    Unfortunately, because of the Branch’s current financial position it has been necessary to make an administrative staff member redundant.

    Accordingly, monies will be required from the investment funds to meet the redundancy payment as well as the employee’s accrued leave entitlements.

    Further, the Branch does not have the funds in its operating accounts to meet this obligation.

    The Branch Committee of Management resolved in November 2015 to make the administrative position redundant following a report from the Branch Secretary on the Branch’s financial position.  The Committee also resolved that given the Branch’s financial position the funds to meet the employee obligations should be met from the Branch’s Industry Fund Portfolio Service investment.

    The employee concerned has been employed by this Branch of the Union (and its predecessors) for approximately 39 years.  Appropriate recognition will be marked for her years of service to the Union at an appropriate occasion.  The employee concerned is entitled to the Telstra conditions in this regard, and the Branch Committee of Management has endorsed that position.

    The total amount required as referred to above is $174,113.46, and has been confirmed by the Branch’s auditors. It is proposed to make this payment from the Industry Fund Portfolio Service investment in not less than 30 days after the date of this advice. The employee has been consulted and advised of the Branch Committee of Management’s decision.

    I anticipate that I may have to make a further call on the funds for future employee entitlements, but as previously indicated, I will write to you separately in that regard, if and when the need arises.

    I have provided a copy of this letter to the CEPU National Secretary.

  6. On the following day, 23 March 2016, notice of a special meeting of the National Council of the Union to be held on 6 April 2016 was given by the National Secretary, Allen Hicks.  Mr Ellery’s letter of 22 March was on the agenda.  When Mr Hicks was asked by the court how Mr Ellery’s letter came to be referred to the National Council, rather than being treated within the Division, he said:

    This matter, with respect to the preserved funds, has been going on … for a long period of time, but when I became involved was in 2013.  And the previous secretary, Mr Cooper, and I had a significant amount of dialogue about what was required for the preserved funds. I was authorised at the time to get legal advice and take legal action to protect and preserve those funds. So there had been an enormous amount of dialogue and correspondence go between myself at the national level, as the national secretary, and Mr Cooper at the time, who was the branch secretary. And the reason why I responded to this was because Mr Ellery give [sic] a written undertaking to me as the national secretary, that no funds would be spent from those preserved funds without giving the divisional secretary and the national secretary 30 days’ notice of that.  And the reason why I circulated it, the correspondence to the national councillors, was simply because this matter has been alive since 2013.  It has been ongoing since that time. …  the other reason why I’m involved … if there’s a branch that has concerns about its ongoing viability and whether it can meet its obligations – financial obligations, that has an impact globally on the union. So if a branch becomes insolvent, someone has got to pay the moneys.

    Answering questions from counsel for the respondents, Mr Hicks made in clear that the undertaking he referred to did not involve an acceptance by Mr Ellery or the BCOM that the National Council had the right to control the investment fund:  indeed, that has been a matter of dispute since at least 2013.

  7. At its meeting on 6 April 2016 – attended both by the applicant and by Mr Ellery – the National Council of the Union adopted the following resolution:

    National Council notes:

    A.that the Victorian T&S has certain funds requiring National Council approval to be used (“the Preserved Funds”);

    B.the report of the Branch Secretary of the Victorian T&S Branch in respect of the redundancy payment;

    C.       notes the concerns raised in respect of legitimacy of the payment;

    D.notes with grave concern that the financial situation of the Victorian T &S Branch appears to be dire and that it holds serious concerns about the Branch’s ongoing viability.

    National Council now resolves:

    1to reject the request to access the reserved funds of the Victorian T&S Branch;

    2to reaffirm its previous resolution that access to these funds requires prior approval from the National Council or National Executive;

    3refers the issue of payment of employee entitlements in excess of the funds required by the Branch to operate to the Divisional Executive of the Communications Division;

    4to direct the Divisional Secretary of the Communications Division to prepare a written report to all National Councillors within 30 days on the ongoing viability of the branch;

    5to direct the Branch Secretary, officers and employees of the Victorian T&S Branch to comply with all requests from Divisional Secretary and provide all necessary assistance to allow the Divisional Secretary to discharge his obligations under this resolution;

    6to direct the Victorian T&S Branch Secretary to provide written confirmation within seven (7) days that the Preserved Funds will not be used in respect of this redundancy payment.

  8. As Secretary of the Division, the applicant was required to prepare the report referred to in item 4 of this resolution. On 12 April 2016, he wrote to Mr Ellery, referring to that resolution. He referred to the size of the payout proposed to be made to Ms Willoughby, describing it as “equivalent to more than a third of your Branch’s total equity” as at 31 March 2015. He said that, before “such a crippling cost” could be incurred, it was incumbent upon the Union and its officers to consider “most diligently” the decision to make the employee’s position redundant, and the question of the Union’s legal obligations to the employee as a consequence of such a decision. He reminded Mr Ellery of the provisions of Pt 2 of Ch 9 of the RO Act, and of those of ss 285 and 286 in particular. He added that, if it were to be found that any officer had contravened those provisions, the Union would be in a position to recover, from that officer, compensation for the damage caused by his or her breach of duty. He requested Mr Ellery to provide him with “all relevant documents” relating to the employee’s entitlements in the event that her position was made redundant, and the steps taken by the BCOM to consider whether to make the position redundant. He went on to specify some of the documents, or categories of documents, which he required. He insisted that, in the meantime, Mr Ellery “say nothing to the employee in question that could be used to maintain a claim for redundancy entitlements against the Union”, and “take no step that would commit the Union to pay the employee the costs of redundancy to which you have referred.”

  9. On 14 April 2016, the applicant sent an email to Mr Ellery, informing him that he (the applicant) had engaged an independent auditor to assist him in the report he had been directed to prepare.  The auditor was available to attend the Branch office on 18 April 2016 to inspect the Branch’s financial records.  The applicant proposed that the auditor and anyone assisting him would attend the Branch office at 10 am that day.

  10. On the same day, 14 April 2016, the BCOM passed a resolution in the following terms:

    Branch Committee of Management makes the following statement as an interim response to the National Council and Divisional Secretary and a full consideration of the matter will be made at a subsequent BCOM:

    1.The Investment Fund representing some of the proceeds of the sale of branch buildings constitute Branch Funds under the rules and currently exceeds $730,000;

    2.That the Branch maintains that the Investment Fund is available for use for Branch purposes and does not require the authority of the National Council, National Executive, Divisional Conference or Divisional Executive to be expended for Branch purposes;

    3.The Branch notwithstanding the status of the Investment Fund as Branch Funds had previously agreed to give notice to the Divisional Secretary and National Secretary of proposals of the expenditure of funds from the Investment fund;

    4.On 22 March 2016 the Branch gave notice of its intention to apply part of the Investment Fund to meet redundancy and employment entitlements obligations.

    5.        The National Council passed a resolution on 6 April 2016 that:

    (a)Misrepresented the branch notice as constituting a request to access the funds;

    (b)Noted without any proper basis concern raised in respect of the obligation to make a redundancy and employment entitlements payment;

    (c)Purported to “reaffirm” a position expressly rejected by the Branch, that access to the funds for Branch purposes required prior approval from the National Council or National Executive;

    (d)Constituted an outrageous attempt to deny a long standing employee of the Branch her legal entitlements to leave entitlements and redundancy pay;

    (e)Having regard to, among a number of other matters, the Branch’s obligations to the former employee concerned, was adopted for an improper purpose and in bad faith.

    6.The recent discussion between the Branch Secretary and the Divisional Secretary in respect of outstanding capitation fees and the Branch’s obligation to meet redundancy payments and the Divisional Secretary’s failure to propose any mechanism by which the redundancy and entitlements obligations might be met.

    And resolves as follows:

    1.To direct the Branch Secretary to seek legal advice as to the status of the following:

    (a)       The National Council Resolution of 6 April 2016;

    (b)The National Council’s purported requirement that access to the funds requires prior approval from National Council or National Executive.

    (c)       The obligations of the Branch to meet the redundancy payment.

    2.To direct the Branch Secretary to seek the Branch Auditor’s advice on the prudence of meeting the redundancy obligations from funds other than the Investment Fund.

    3.To direct the Branch Secretary to advise the National Secretary that the Investment Fund will not be used in respect of the redundancy payment pending the Branch’s receipt of the foregoing legal and accounting advice.

    In a letter of the same date by which the terms of this resolution were sent to the applicant, Mr Ellery said that he was “not in a position to respond to your demand for documents nor permit your auditor’s access to the Branch premises pending the Branch’s receipt of the legal and accounting advice referred to in that resolution.”  On the following day, a copy of this resolution was sent to Mr Hicks.

  11. By letter to Mr Ellery dated 18 April 2016, the applicant reiterated his request for documents that had been made in his letter of 12 April 2016 (albeit referring to it as a letter dated 13 April), and said that he and the auditor would present themselves at the Branch office at 10 am the following day.  By a letter in reply dated the same day, Mr Ellery told the applicant that he had sought legal advice as to the status of the National Council resolution of 6 April 2016, pending receipt of which he was “not in a position to respond to your demand for documents nor permit your auditor’s access to the Branch premises”.  Nonetheless, at 10 am on 19 April 2016 the applicant and his auditor attended at the Branch office.  They were denied entry by Mr Ellery.

  12. This proceeding was commenced on 21 April 2015.  The applicant sought the following orders:

    1.A declaration under section 23 of the Federal Court of Australia Act 1976 that the position occupied by Ms Trish Willoughby in the employ of the Union is not redundant.

    2.An order under section 164 of the Act that the Respondents perform and observe the registered rules of the Division by refraining from making the position occupied by Ms Trish Willoughby in the employ of the Union redundant.

    3.An order under section 164 of the Act that the Respondents perform and observe the registered rules of the Division by refraining from making any payment to Ms Trish Willoughby as a termination payment on redundancy.

    4.In the alternative to orders 1, 2 and 3 above, an order under section 164 of the Act that the Respondents perform and observe the registered rules of the Division by refraining from making any payment to Ms Trish Willoughby as a termination payment on redundancy in an amount calculated according to redundancy entitlements paid by Telstra to its redundant employees.

    5.Further in the alternative to orders 1, 2 and 3 above, an order under section 164 of the Act that the Respondents perform and observe rule 77 of the registered rules of the Division by refraining, in compliance with the resolution of the National Council of the Union on 6 April 2016, from making any payment to Ms Trish Willoughby as a termination payment on redundancy from the Branch's Industry Fund Portfolio Service investment.

    6.An order under section 164 of the Act that the Respondents perform and observe rule 77 of the registered rules of the Division by complying with the resolution of the National Council of the Union on 6 April 2016 to comply with all requests from the Divisional Secretary and provide all necessary assistance to allow the Divisional Secretary to prepare a written report to all National Councillors within 30 days on the ongoing viability of the Branch as he was directed by the National Council on 6 April 2016.

    7.An order under section 164 of the Act that the Respondents perform and observe rule 77 of the registered rules of the Division by complying with the resolution of the National Council of the Union on 6 April 2016 by causing or directing the officials and employees of the Branch to comply with all requests from the Divisional Secretary and provide all necessary assistance to allow the Divisional Secretary to prepare a written report to all National Councillors within 30 days on the ongoing viability of the Branch as he was directed by the National Council on 6 April 2016.

    8.An order under section 164 of the Act that the Respondents perform and observe rule 77 of the registered rules of the Division by refraining from in any way hindering or obstructing the Divisional Secretary in his to preparation of a written report to all National Councillors within 30 days on the ongoing viability of the Branch as he was directed by the National Council on 6 April 2016.

    9.An order under section 164 of the Act that the Respondents perform and observe rule 77 of the registered rules of the Division by causing or directing the officials and employees of the Branch to refrain from in any way hindering or obstructing the Divisional Secretary in his to preparation of a written report to all National Councillors within 30 days on the ongoing viability of the Branch as he was directed by the National Council on 6 April 2016.

    10.      Such further or other orders as to the Court seem appropriate.

  1. By interlocutory orders made on 26 April and 2 May 2016, the respondents are restrained from taking any action, or further action, to make the position occupied by Ms Willoughby redundant, and from making any payment to Ms Willoughby as a termination payment on redundancy. 

  2. Turning to the first of the two issues which must be decided in this proceeding – that identified in para 2 above – I would commence by making clear what is not alleged by the applicant.  It is not alleged that Ms Willoughby’s position was not redundant:  indeed, it was put to Mr Ellery by counsel for the applicant that the position was redundant, or very close to it, from about the start of 2015.  Despite what appeared to be the case at the outset of the proceeding, neither was it alleged that Ms Willoughby’s age (72 years) of itself gave a colour of bad faith to the BCOM resolution being challenged, in the sense that someone who would normally be expected to retire was accorded the benefit of a redundancy separation.  The retirement/redundancy dichotomy was not a feature of final submissions made on behalf of the applicant.  Finally, the validity of the BCOM resolution of 25 November 2015 (see para 3 above) was not challenged.

  3. The only act of the BCOM which remained under challenge (as to validity under the Rules)  at the end of the trial was the resolution of 21 July 2015 to apply the Telstra redundancy payment standard to any situation in which a position occupied by an employee of the Branch became redundant, and the occupant had to be retrenched accordingly.  The challenge was not based upon the absence of the primary responsibility of the BCOM to determine such matters.  Indeed, rule 54 of the Divisional Rules invests in the BCOM the power to determine the “pay and conditions” of persons employed by the Union in the Branch office.

  4. One of the conditions as to which there had never been a determination was the payment standard for employees retrenched on account of redundancy.  The BCOM was, therefore, acting entirely within its mandate to set such a standard.  Given the long-standing practice of aligning salaries, and some other conditions, with the corresponding entitlements accorded to the employees of Telstra, to follow that precedent in the matter of redundancy pay could hardly be described as unconventional, and surely would have come as no surprise to the employees concerned.  Indeed, when cross-examined on the subject, Ms Parker seemed to regard the course followed by the BCOM as both logical and fair to all concerned.

  5. It is true, of course, that the BCOM occupied a fiduciary position in its disposition of the limited resources of the Branch.  However, aside from Mr Cooper, who did not participate in the resolution, no member of the BCOM stood to benefit therefrom.  There was no conflict of interest.  It was put on behalf of the applicant that the power to determine pay and conditions was confined to the purposes for which it was invested in the BCOM, and so much may be accepted, but it is hard to see the purpose of this resolution in any other light.  It was put that Mr Ellery, at least, had the purpose of delivering an unduly generous benefit to someone with whom he had worked for many years.  But it was not suggested that his relationship with Ms Willoughby was other than the conventional working one that would develop where two people had worked together in a small office over many years.  Crucially, it was not suggested that he stood to benefit, directly or indirectly, from the size of the redundancy payment that would be paid to Ms Willoughby.  In short, the proposed transaction would have been an arm’s-length one. 

  6. It is also true that it was Ms Willoughby’s own circumstances, together with those of Mr Cooper, which provided the occasion for the BCOM’s consideration of the matters with which it dealt on 21 July 2015.  But there had never been a redundancy in the Branch previously:  someone had to be the first cab off the rank, as it were.  And when the occasion did arise, something had to be done about it.  One possibility would have been to do nothing, and to regard the matter as covered by the National Employment Standards under the Fair Work Act 2009 (Cth). But the BCOM was not obliged to take that course: indeed, to do so would have been asynchronous with the way in which salaries and some other conditions had been dealt with traditionally. The BCOM was charged with determining conditions of employment under rule 54, and it was not only conventional but, I would venture to add, entirely apposite that it should do so in the light of the prospective redundancy of the positions occupied by Ms Willoughby and Mr Cooper.

  7. How might the BCOM have gone about the task of setting a redundancy standard for employees of the Branch?  In a practical situation in which a fiduciary is called upon to approve a payment, for example, to be made to another person from funds under his or her control, he or she will generally seek to identify some objective standard by reference to which the payment can be justified.  As it seems to me, that is exactly what the BCOM did on 21 July 2015.  The surest defence, for Mr Ellery and his colleagues, against criticisms of the kind now made by the applicant, would be to say that they had done neither more nor less than to apply the practice which had hitherto been applied in other, related, areas.  In the circumstances which have come before the court, that is a defence which should be accepted.

  8. Naturally because of his full time position, the focus of the applicant’s case has been on Mr Ellery, but it must not be forgotten that he was only one of 14 members of the BCOM.  The only other one to have given evidence is Ms Parker, and I am left in no doubt but that the discharge of her responsibility as a member of the BCOM was, in relevant respects, entirely untainted by considerations external to the proper scope and purpose of rule 54.  She took the view that there should be a provision for redundancy payments to be made to Branch employees in appropriate cases, and she regarded the Telstra standard as the most natural point of reference.

  9. There was, in my view, nothing in Mr Ellery’s endorsement of the proposal which he put to the members of the BCOM on 21 July 2015, and nothing in those members’ adoption of the proposal, which put him, or them, in breach of his, or their, fiduciary obligations to the Union.  It follows that I would reject the applicant’s case that the BCOM resolution of that date was not passed in accordance with the Rules.

  10. Turning to the second of the two issues which must be decided in this proceeding – that identified in para 3 above – I should commence by referring to the relevant provisions of the Rules.  Under rule 7.1 (titled “Powers of the National Council”), it is provided as follows:

    7.1.1The National Council of the Union shall have exclusive power to deal with matters affecting more than one division and the general control and conduct of the business and affairs of the Union having regard to the requirements of divisional autonomy provided for in these rules.

    7.1.2Without limiting the generality of sub-rule 7.1.1 the National Council shall have exclusive power to:-

    7.1.2.8authorize a division to purchase or lease real property using funds controlled by the division, branch or divisional branch or to sell, mortgage or otherwise deal in real property controlled by the division, branch or divisional branch ….

  11. What rule 7.1.1 refers to as “the requirements of divisional autonomy” is a reference to rule 6.2, which includes the following provisions:

    6.2.1Each division shall have the autonomy to decide matters which do not directly affect the members of another division. Such matters include but are not limited to:

    6.2.1.5responsibility and accountability for managing the funds held by that Division, including ensuring that the Division in accordance with its rules has made full provisions for all employment entitlements of Officers and employees of the Division and its Divisional Branches, such provisions may be held at Divisional or Divisional Branch level. Each Division shall provide a report annually to National Council, based on the audited accounts of the Division and Divisional Branches, of each Division’s provisions and liability for those entitlements;...

  12. Although the National Executive of the Union played only a minor part in the facts which have become relevant in this proceeding – being limited, it seems, to the resolution of 10 March 2006 which was, in any event, adopted by the National Council at its meeting on 23-24 November 2006 – I mention here for the sake of completeness that rule 7A.2 (titled “Powers and functions of the National Executive”) provides that, subject to certain presently immaterial exceptions and subject to the overriding control of the National Council, the National Executive “shall exercise all of the powers of the National Council in between meetings of the National Council”.

  13. Rule 19 (titled “Property and Funds of the Union”) includes the following provisions:

    19.1     Union Funds

    19.1.1All funds and property held by the National Council and/or the Divisions are the funds and property of the Union.

    19.1.2The funds and property of the Union shall be in the care, custody and control of the Division which holds such funds and property pursuant to the Divisional rules and shall be controlled and administered in accordance with the rules of that Division.

    19.1.3The funds and property of the Union shall be invested in the name of the Union. In the case of Divisions and the Divisional Branches it shall be invested in the name of the Union with the additional words containing the name of the Division and/or the Divisional Branch.

  14. By divisional rule 7, the Divisional Conference is “the highest deliberative body of the Division”, obliged to “manage the affairs of the Division”.  A series of powers is set out, but none bears specifically on the present problem.  By divisional rule 12, “the Divisional Executive shall … exercise all powers of the Divisional Conference and shall be responsible for the management of the Division’s affairs, property and funds” (the latter aspect of which not, it seems, corresponding as such with any specific power of the Conference).

  15. I have already referred to divisional rule 54 (see para 35 above).  Divisional rule 58 (titled “Branch Funds and Property”) includes the following provisions:

    (a)       The funds of the Branch (“the Branch funds”) shall consist of:

    (i)any real or personal property of which a Branch by the Rules or by any established practice not inconsistent with the Rules has or, in the absence of any limited term lease, bailment, or arrangement would have the tight of custody, control or management;

    (ii)the amount of subscriptions received by a Branch less so much as is payable to the Divisional Conference, the amount of any levy imposed and received by the Branch and the amount of any fines received by the Branch;

    (iii)any interest, rents or dividends derived from investment of the Branch fund;

    (iv)any superannuation or long service leave fund operated or controlled by a Branch for the benefit of its Officers or employees;

    (v)any property acquired wholly or mainly by expenditure of the monies of the Branch fund or derived from other assets of the fund; and

    (vi)the proceeds of any disposal of parts of the fund.

  16. Finally, divisional rule 77(a) provides as follows:

    The duties of the Branch Committee of Management shall be to take such steps as may be necessary to carry out the Rules and objects of the Union, the resolutions of the National Council, National Executive, Divisional Conference and the instructions of the Divisional Executive and Branch General Meetings, at which no less than five per cent of the members of the Branch are in attendance. The Branch Committee of Management shall be the governing body of the Branch at all other times, and shall act on its behalf in all matters, and shall manage and control the funds of the Branch ….

    It is in this rule, on the applicant’s case, that one finds the basic obligation of the BCOM to carry out resolutions of the National Council.  Only “at all other times” is the BCOM the “governing body” of the Branch.  Clearly, if – but only if – the resolution passed by the National Council on 6 April 2016 was within its powers under the Rules, the BCOM was obliged to comply with it.

  17. The first of two ways in which counsel for the applicant sought to uphold the validity of the resolution was under rule 7.1.1 of the Rules.  It was submitted that the power “to deal with matters affecting more than one division” extended to any matter which affected the property of the Union, whether or not under the control of a particular division, or of a branch within a division.  In this respect, counsel for the applicant relied particularly on the evidence of Mr Hicks that the failure of the Branch to meet its financial obligations had the potential to affect the Union as a whole (see para 26 above).  It was also submitted that the qualifier “having regard to the requirements of divisional autonomy provided for in these rules” applied only so much of r 7.1.1 as related to “the general control and conduct of the business and affairs of the Union” and had nothing to do with the first-mentioned power.

  18. I accept the second of these submissions, but not the first.  I do not think the draftsman would have thought it made sense to apply the qualifier to a head of power which, by its own terms, related to matters which affected more than one division.  To have qualified that power by the introduction of notions of autonomy would, in my view, have been to introduce a tension, and an incongruity, which need not be there.  To that extent, I am with the applicant.  However, I do not accept that the first head of power applied to the circumstances of the present case.  With respect to the two matters mentioned by Mr Hicks in the passage from his evidence set out in para 26 above, I do not accept that being of national concern, even of serious national concern, meant that the matter in question affected more than one division.  While the financial viability of the Branch was a matter of real concern for the National Council, the division affected thereby was, in my view, the Division as such.  At the general level, I accept Mr Hicks’ evidence that “someone has got to pay”, but the facts of the present case had not reached the stage where that someone would be a member of another division of the Union.  Indeed, the whole point of the National Council concerns, as it seems to me, was to ensure that the financial problems of the Branch did not spill over so as to “affect” other Divisions.

  19. The matters dealt with by the National Council were, of course, four-square within the second limb of rule 7.1.1:  they involved “the business and affairs of the Union”.  But the problem for the applicant, at this point, is that this limb was subject to the qualification, “having regard to the requirements of divisional autonomy as provided for in these rules”.  Those requirements, mandated by rule 6.2.1, insulated from the second limb of rule 7.1.1 any matter which did not directly affect the members of another division.  If the financial state of the Branch did have the potential to affect members of another division, that potential affectation could, at the relevant times, have been regarded as no more than indirect.

  20. Thus I would hold that the National Council resolution of 6 April 2016 was not within power under rule 7.1.1 of the Rules.

  21. The second way in which counsel for the applicant sought to uphold the validity of that resolution was under rule 7.1.2.8 of the Rules.  This is a specific head of power which deals with the matter of real property as such and is not, in my view, qualified by the restrictions to which the general provisions of rule 7.1.1 are subject.  Although the use of the fund generated from the sale of the Cromwell Street property for Ms Willoughby’s redundancy payment did not directly engage this rule, it did, in the submission of the applicant, do so indirectly.

  22. The applicant says that, by the National Council resolutions of 16 March and 23-24 November 2006 (see paras 10 and 13 above), that body, which had the relevant power to authorise the sale of the property under rule 7.1.2.8, did so subject to the condition that the resulting fund be invested “in a secure long term investment”.  The applicant then says that the imposition of this condition was the National Council’s means of protecting the corpus of the proceeds of the sale.  Although the fund, no longer having the form of real property, was not directly subject to National Council control under rule 7.1.2.8, the sale of the property in 2006 required the authorisation of the National Council, and that was, as I say, given on condition.

  23. Counsel for the respondents had two answers to this point.  The first was that rule 7.1.2.8 did not contemplate a conditional authorisation:  either the National Council authorised the sale of a property or it did not, and if it did, any conditions purportedly attached could be ignored by the Division.  I would not accept that submission.  Although the rule says nothing about conditions as such, a conditional authorisation is something less than, and necessarily within the four corners of, the more absolute power expressed in the rule, analogously with the reasoning deployed, for example, in Country Roads Board v Neale ADS Pty Ltd (1930) 43 CLR 126, 135 and Foley v Padley (1984) 154 CLR 349, 358-359 and 379-380. If the National Council resolution of 6 April 2016 is to be understood as having been an attempt to keep the BCOM to the conditions which were imposed in 2006, it must necessarily be seen as the assertion of the same lawful control as provided the authority for the sale as such, and therefore as within the scope of rule 7.1.2.8.

  24. The second answer was that the National Council resolution reported on 16 March 2006 and the National Executive resolution of 10 March 2006 (effectively adopted by the National Council in November of that year) did not purport to impose conditions to which the authority to sell the Cromwell Street property was subject.  Authority had been given to sell the property, and what followed in the later part of the resolutions was no more than a rider which did not invoke any power which the National Council had under rule 7.1.2.8.  This involving a question of the construction of the resolutions as it does, I consider it most improbable that the National Council would have intended them to be understood in the way submitted on behalf of the respondents.  This was serious business.  On any view, the National Council intended that its resolutions be complied with.  We are here dealing with the operations of a trade union, and a realistic and practical approach should be taken, one which best leads to the achievement of the manifest intention of those who passed the resolutions.  I would not accept this second submission on behalf of the respondents. 

  25. The identification of the power in rule 7.1.2.8 as one which is “exclusive” to the National Council involves the corollary, of course, that it may not be exercised by any other person or body within the Union.  The conclusion reached above that this power may be exercised subject to conditions does not mean that the National Council is wholly at large in the conditions which it may impose.  There may be a question whether the imposition of a condition the purpose of which was to achieve some completely collateral outcome would be within power, and if not, whether the exercise of the power to authorise, or only the imposition of the condition, would be invalid.  But the present case does not raise any such question.  It is clear that the concern of the National Council in imposing the condition was to secure the corpus of the proceeds of the sale of the Cromwell Street property and, likewise, a concern of the same kind informed the more recent proceedings and resolutions of the National Council on the matter, including the resolution passed on 6 April 2016.

  1. So I uphold the applicant’s case so far as it relates to the investment fund. 

  2. It remains to consider which of the heads of relief claimed by the applicant, if any, should be granted.  They are set out in para 32 above.

  3. Paragraphs 1 and 2 of the applicant’s claims were effectively abandoned during the running of the trial.  In the absolute form in which it is expressed, so was para 3.  I have decided the point on which claim 4 is based adversely to the applicant.  Paragraph 5 relates to a point on which the applicant succeeded:  he has made good his claim to an order in substantially these terms.  On the other hand, I consider that paras 6, 7, 8 and 9 travel beyond the legal basis of the applicant’s success under rule 7.1.2.8.  There may have been an argument available that some kind of incidental power was attached to the specific power arising under that rule, but none was put.  Otherwise, my attention was not drawn to any rule that would sustain a resolution by which the National Council instructed the Divisional Secretary to undertake an investigation into the “ongoing viability” of the Branch.

I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

Associate: 

Dated:        1 July 2016


SCHEDULE OF PARTIES

VID 342 of 2016

Respondents

Fourth Respondent:

PAUL LIGHTFOOT

Fifth Respondent:

MARK DENNIS

Sixth Respondent:

AMY STUBBERFIELD

Seventh Respondent:

NEIL JOHNSON

Eighth Respondent:

IAN MCCALLUM

Ninth Respondent:

ROBERT PARKER

Tenth Respondent:

MIHI SHAW

Eleventh Respondent:

SCOTT THOMSON

Twelfth Respondent:

DAVID SMITHWICK

Thirteenth Respondent:

MAUREEN PARKER

Fourteenth Respondent:

ROGER BLAND

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