Rayner v Riley
[2020] FCA 587
•6 May 2020
FEDERAL COURT OF AUSTRALIA
Rayner v Riley [2020] FCA 587
File number: VID 152 of 2018 Judge: SNADEN J Date of judgment: 6 May 2020 Catchwords: INDUSTRIAL LAW – application under s 164 of the Fair Work (Registered Organisations) Act 2009 (Cth) for an order directing the performance or observance of union rules – interpretation of union rules – whether funds owing to a former employee of a union should be paid from funds under the control of the branch within which she was employed or the division within which that branch was founded – whether resolutions directing transfer of money from funds controlled by the branch to funds controlled by the division were valid under the union’s rules – whether the court should decline to grant relief on discretionary grounds – application dismissed
UNION RULES – validity of resolution – whether reasonable notice was given of a meeting at which a resolution was passed – whether resolution was made beyond power – separate resolution to ratify, authorise and/or endorse a prior resolution – validity of latter resolution – whether ratification could operate retroactively – whether latter resolution was invalid insofar as it purported to ratify, authorise or endorse an earlier resolution after the time for compliance therewith had expired – whether latter resolution was made beyond power – whether latter resolution was made in accordance with union rules – whether demand for payment made in consequence of latter resolution was a demand that the resolution authorised – whether the maker of the demand considered that it was reasonable in the circumstances
Legislation: Fair Work (Registered Organisations) Act 2009 (Cth) Pt 2, ss 164, 164A, 164B, 338 and 329 Cases cited: Construction, Forestry, Mining and Energy Union; ex parté WJ Dean & Sons Pty Ltd (1994) 181 CLR 539
Mellor v Horn (1988) 25 IR 157
Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corp (1975) 11 SASR 504
Rayner v Ellery [2016] FCA 771
Date of hearing: 10-11 October 2019 Registry: Victoria Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 142 Counsel for the Applicant: Mr R Reitano with Mr T Borgeest Solicitor for the Applicant: Slater and Gordon Counsel for the First to Ninth, Eleventh to Thirteenth, and Fifteenth to Sixteenth Respondents: Mr E P White Solicitor for the First to Ninth, Eleventh to Thirteenth, and Fifteenth to Sixteenth Respondents: Gordon Legal Counsel for the Tenth and Fourteenth Respondents: The Tenth and Fourteenth Respondents did not appear ORDERS
VID 152 of 2018 BETWEEN: GREGORY RAYNER
Applicant
AND: SUSAN RILEY
First Respondent
JOHN ELLERY
Second Respondent
KEVIN WELBOURN (and others named in the Schedule)
Third Respondent
JUDGE:
SNADEN J
DATE OF ORDER:
6 MAY 2020
THE COURT ORDERS THAT:
1.The amended originating application filed 13 December 2018 be discontinued as against the second, ninth, tenth, twelfth, thirteenth and fourteenth respondents.
2.Mr David Ketchion and Mr Andrew Young be joined in the matter as the fifteenth and sixteenth respondents respectively.
3.The amended originating application filed 13 December 2018 be dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
SNADEN J:
The parties are all officials of a large and well-known trade union known as the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (hereafter, the “CEPU”). The CEPU is an organisation registered as such with the Fair Work Commission pursuant to Pt 2 of the Fair Work (Registered Organisations) Act 2009 (Cth) (hereafter, the “FW(RO) Act”).
As with all such organisations, the CEPU operates pursuant to rules that are made and enforced under the FW(RO) Act. Those rules (hereafter, the “CEPU Rules”) provide for the way in which—and the offices and bodies by which—the functions of the CEPU are to be discharged. There are many such offices and bodies. The primary decision-making body within the CEPU is known as its National Council. It meets annually and the rules invest within it various powers that need not here be explored. Between meetings of the National Council, the CEPU’s functions are overseen by a “National Executive”, which comprises of various office bearers, for whose election and functions the CEPU Rules make separate provision. The CEPU Rules invest in the National Executive most (but not all) of the powers of the National Council. The National Executive meets periodically and, between such meetings, its powers (or at least some of them) are vested in the CEPU’s National Secretary and Assistant National Secretary.
Notwithstanding the establishment of those national bodies and offices, the functions of the CEPU are not primarily undertaken at a national level (that is to say, by its National Secretary or Assistant Secretary, its National Executive, or its National Council). Amongst other things, “Section A” of the CEPU Rules makes provision for the establishment within the CEPU of “divisions”. Each such division has “…the autonomy to decide matters which do not directly affect the members of another division”: CEPU Rules, r 6.2.
One division so established is the “Communications Division”. Section D of the CEPU Rules makes provision for rules that govern the administration of that division. Again, those (divisional) rules (hereafter, the “Divisional Rules”) provide for the way in which—and the offices and bodies by which—the functions of the Communications Division are to be discharged. The highest deliberative body within the Communications Division is known as its “Divisional Conference”. It is, in effect, the Communications Division’s equivalent of the CEPU’s National Council. It meets every two years and exercises various powers with which the Divisional Rules endow it (some of which assume some significance in this proceeding and are analysed in more detail below). Between meetings of the Divisional Conference, the Communications Division’s functions are overseen by its “Divisional Executive”. Again, it is the Communications Division’s equivalent of the CEPU’s National Executive: it comprises of various office bearers (for whose appointment and functions the Divisional Rules make separate provision). The Divisional Rules invest in the Divisional Executive most (but not all) of the powers of the Divisional Conference. It meets periodically and, between such meetings, its powers (or at least some of them) are vested in the Communications Division’s Secretary and Assistant Secretaries.
Notwithstanding the establishment of those divisional bodies and offices, the functions of the Communications Division are not primarily undertaken at a divisional level (that is to say, by its Divisional Secretary or Assistant Secretaries, its Divisional Executive, or its Divisional Conference). The Divisional Rules also provide for the establishment within the Communications Division of “branches”. Again, each such Branch operates autonomously “…in relation to matters affecting only members of the Branch”: Divisional Rules, r 44(b).
One branch so established is the “Victorian Telecommunications and Services Branch”. The Divisional Rules provide for the way in which—and the offices and bodies by which—the functions of that branch are to be discharged. The administration of the branch vests (amongst other bodies and offices at various times) with a branch executive, which is comprised of a President, a Vice President, a Secretary, and an Assistant Secretary. The branch executive forms part of what is known as the branch committee of management, which appears to be the highest deliberative body within the branch.
The CEPU, its Communications Division, and the Victorian Telecommunications and Services Branch are not separate entities. They tend, however, to be operated as though they are. By and large, the CEPU Rules provide that the executive functions of the union reside at a branch level. However, the autonomy conferred at the branch and divisional levels is not absolute: the administration of the Victorian Telecommunications and Services Branch (hereafter, the “Branch”) is subject to various forms of direction by the Communications Division; and the administration of the Communications Division (hereafter, the “Division”) is subject to various forms of direction by the CEPU’s national or central (or non-divisional) administration.
The present proceeding concerns a dispute that has arisen between the parties as to the effect or enforcement of the CEPU Rules. The applicant is the secretary of the Division. The respondents, for the most part, are (although, in some cases, were but are not now) members of the Branch’s branch committee of management (hereafter, the “BCOM”).
In 2016, the BCOM dismissed for reasons of redundancy a long-serving employee, Ms Patricia Willoughby. Doing so triggered a liability for certain employment-related entitlements. At the time of Ms Willoughby’s dismissal, the BCOM hoped to meet that liability by drawing upon money held in what is apparently known as the Branch’s “Industry Fund Portfolio Service Fund” (or, “IFPS Fund”). The nature of that fund and the circumstances surrounding Ms Willoughby’s dismissal are the subject of an earlier proceeding in this court: Rayner v Ellery [2016] FCA 771 (Jessup J). Save for what appears below, it is not necessary to venture much upon either subject. For present purposes, it is sufficient to note the following (none of which is controversial):
(1)the Branch is (and, at all times, was) unable to access moneys held within the IFPS Fund of its own volition—instead, it requires (and required) the permission of the CEPU’s National Council to that end;
(2)the bulk of the amounts to which Ms Willoughby became entitled upon her dismissal were conferred by employment terms—specifically, terms concerning redundancy entitlements—to which the BCOM agreed in July of 2015;
(3)approximately four months after those terms were agreed, the BCOM made a decision that Ms Willoughby’s position was redundant (although it did not, at that point, move to terminate her employment);
(4)in anticipation of terminating Ms Willoughby’s employment for reasons of redundancy, the BCOM sought permission from the CEPU’s National Council to access the IFPS Fund for the purposes of meeting the liabilities that that termination would trigger;
(5)that permission was not granted;
(6)by means of this court’s determination of the proceeding referred to above, the power of the National Council to withhold that permission, or to otherwise prevent the Branch from accessing the IFPS Fund, was upheld, and the Branch was restrained from meeting from that fund any termination payments to which Ms Willoughby might later have become entitled.
On Monday, 31 July 2017, the BCOM gave to Ms Willoughby notice that her employment would terminate with effect from the end of that week. That duly occurred. The BCOM did not, however, pay Ms Willoughby (from funds under its control) all of the termination payments to which she was entitled by reason of her dismissal. Those entitlements totalled $190,965.91 (inclusive of amounts to be remitted for income tax purposes).
On 21 September 2017, the second respondent, Mr Ellery—who, at the time, was the Branch’s secretary—wrote to the applicant about Ms Willoughby’s termination entitlements. Amongst other things, that correspondence represented as follows:
The CEPU is liable for Ms Willoughby’s employment entitlements. By reason of Rule 6.2.1.5 of the Union’s Rules, the part of the CEPU obliged to make provision for her entitlements was and is the Division. The Rule obliges the Division to make provision for the entitlements of those CEPU employees employed in the Division or in a Branch of the Division. The rule plainly applies to Ms Willoughby’s circumstances. That being so, the source of the necessary funds to pay Ms Willoughby her entitlements on behalf of the CEPU…is the Division.
…
It will be obvious to you that Ms Willoughby is at liberty to sue the CEPU. If she did, it would in my view embarrass the Union. The CEPU would be put in a position of trying to explain why it (a trade union) has denied its former employee the benefit of what seems to me to be an undeniable contractual right…
As the above excerpts make clear, the BCOM, having earlier sought the National Council’s permission to access the IFPS Fund in order that it might pay Ms Willoughby’s termination entitlements, later disclaimed any liability to do so. Instead, it suggested that that liability lay with the Division. The Division took a different view. It maintained that, as Ms Willoughby’s employment had been funded from the resources of the Branch and had been terminated at the Branch’s initiative, any liabilities attaching to that termination should be met from those same resources.
Perhaps unsurprisingly, Ms Willoughby sided with her former colleagues at the Branch. On 5 October 2017 (and via the agency of her solicitors), she wrote to the Division about her outstanding termination entitlements. Amongst other things, that correspondence threatened that (emphasis original):
…if [her] entitlements (redundancy, notice and accrued leave entitlements) [were] not paid within seven (7) days from 6th October 2017 (that is, [on or before] October 13, 2017), [she would] lodge a complaint with the Fair Work Ombudsman, and may, in addition, commence proceedings against the CEPU.
The CEPU thus found itself in something of a dilemma. There was not any real doubt that Ms Willoughby was entitled to the money that she demanded but there was no agreement within the CEPU internally as to whether it should be paid from funds under the control of the Branch or from funds under the control of the Division. Each pointed to the other as the proper source of the funds necessary to satisfy the CEPU’s debt.
Perhaps to its credit, the Division was the first to blink. Late in the afternoon of Thursday, 12 October 2017—the day before the deadline stipulated in Ms Willoughby’s solicitor’s letter—the Division’s then-acting secretary and president gave notice that a meeting of the Division’s Divisional Executive (hereafter, the “Divisional Executive”) would take place by telephone at 12:00pm (AEST) the following day. That notice identified a single motion, the consideration and determination of which was to stand as the primary business to be transacted at that meeting. It read as follows:
MOTION – TRISH WILLOUGHBY
“Communications Divisional Executive notes the correspondence from the Branch Secretary of the Victorian Telecommunications and Services Branch dated 21 September 2017 and the correspondence from Richmond Legal on behalf of Ms Trish Willoughby dated 5 October 2017.
Communications Divisional Executive further notes that Ms Trish Willoughby was at all times an employee of the Victorian Telecommunications and Services Branch and that provision for all employment entitlements of employees of that Branch has, as a matter of custom and practice, been held at the Divisional Branch level. As such, it is and always has been, the responsibility of the Victorian Telecommunications and Services Branch for the payment of employee entitlements including entitlements due to Ms Willoughby.
Communications Divisional Executive therefore resolves that the Communications Division will pay Ms Willoughby’s outstanding statutory entitlements and redundancy pay due (in the amount of $190,965.91 gross less applicable taxation) as a result of the termination of her employment by the Victorian Telecommunications and Services Branch due to redundancy on 4 August 2017.
Communications Divisional Executive further resolves that as the Victorian Telecommunications and Services Branch is responsible under the Rules of the Union for the payment to Ms Willoughby of her statutory entitlements and redundancy pay due on termination, that the Victorian Telecommunications and Services Branch shall cause to be paid to the Communications Divisional Executive the amount of $190,965.91 in twelve (12) monthly instalments of $15,913.83 per month, the first instalment to be paid on 1 November 2017 and the remaining instalments on the first day of each month thereafter. Any failure by the Victorian Telecommunications and Services Branch to comply with this resolution shall be dealt with in accordance with Communications Divisional Rule 45.”
The meeting of the Divisional Executive took place as scheduled. Of its 20 members, 12 attended and four were noted as apologies. With the meeting’s approval, the vote of one of those apologies was exercised by proxy. The motion regarding Ms Willoughby (above, [15]) was carried. Notice of the Divisional Executive’s resolution (hereafter, the “Divisional Executive Resolution”) was formally provided to the second respondent on Monday, 16 October 2017.
On 24 October 2017, the second respondent wrote to the applicant, again asserting that it was the responsibility of the Division to meet, from its own funds, the CEPU’s liability to Ms Willoughby. Amongst other things, that letter suggested that the Divisional Executive Resolution:
…was adopted in circumstances and in terms contrary to the [CEPU] Rules.
As it had resolved to, the Division paid Ms Willoughby the termination entitlements that she was due. That occurred on 2 November 2017. 1 November 2017 came and went. Despite the Divisional Executive Resolution, the Branch did not transfer to the Division the instalment that the Divisional Executive Resolution contemplated. Indeed, the Branch did not pay—and still has not paid—any of the instalments so contemplated.
It was in light of that apparent default that the applicant commenced the present proceeding. In its initial form, it sought orders pursuant to s 164(1) of the FW(RO) Act requiring that the Branch observe the CEPU rules by transferring funds to the Division either as the Divisional Executive Resolution had contemplated, or otherwise in satisfaction of what the Division had paid to Ms Willoughby.
The matter was allocated to his Honour, Justice Bromberg. In April of 2018, his Honour made case management orders with the parties’ consent, including for the provision of affidavit material and contentions of fact and law. There were no orders requiring the filing of pleadings.
On 11 July 2018, the matter underwent something of a course change. On that day, the Division’s Divisional Conference (hereafter, the “Divisional Conference”) passed a resolution in the following terms, namely (emphasis original):
T&S VICTORIAN BRANCH
REPAYMENT OF MONIES PAID IN RESPECT OF THE TERMINATION ENTITLEMENTS
“That Divisional Conference:
NOTING that, on 13 October 2017, Divisional Executive resolved to direct that the Victorian Telecommunications and Services Branch of the Communications Division (‘the Branch’) make certain payments to the Divisional Conference in repayment of monies paid in respect of the termination entitlements of a former employee of the Branch (‘the Divisional Executive Payment Direction’);
NOTING that the Branch has not complied with the Divisional Executive Payment Direction;
NOTING that the Branch, through correspondence issued by its Branch Secretary and by its solicitors, has stated that it does not intend to comply with the Divisional Executive Payment Direction; and
NOTING that the Divisional Secretary has commenced a proceeding in the Federal Court of Australia, seeking orders to the effect that the members of the Branch Committee of Management of the Branch perform and observe the rules of the union in respect of the above matters;
Hereby:
(1) RATIFIES, AUTHORISES and ENDORSES the Divisional Executive Payment Direction;
(2) DIRECTS that the members of the Branch Committee of Management of the Branch cause the amount of $190,965.91 to be paid to the funds of the Divisional Conference, in satisfaction of the demands made by the Divisional Executive Payment Direction, subject to this resolution;
(3) DIRECTS that the members of the Branch Committee of Management of the Branch cause the amount referred to in item (2) hereof to be paid to the funds of the Divisional Conference, in such manner and in such instalments and at such times as may be notified to the Branch Secretary by the Divisional Secretary from time to time, subject to item (4) hereof;
(4) DIRECTS that the Divisional Secretary may not, without prior approval of the Divisional Conference or Divisional Executive, impose any requirement as to instalment amounts, or payment schedules, which require that the Branch make payments in an amount greater than $15,000 in any calendar month, and otherwise AUTHORISES to the Divisional Secretary to impose any instalment amounts and payment schedule as he considers reasonable in the circumstances.”
In the lead-up to the making of that resolution (hereafter, the “Divisional Conference Resolution”), the Branch prepared a “Business Case” document, within which it sought to articulate a strategy to grow its membership and secure its financial well-being. Amongst other things, that document called for the Branch to be granted access to the IFPS Fund in order to pay for certain growth initiatives. It also sought the release from that fund of $50,000, the purpose of which was variously described therein as being “…to avoid further litigation…” and “…to commence reimbursement of the Divisional office”. It is not controversial that that latter amount was earmarked for payment by the Branch to the Division in connection with the present proceeding; and, in particular, in part-settlement of the amount that the Division maintains that the Branch owes it. Indeed, the document itself records that it was required because it was “…imperative to cease federal court action which has the potential to waste further members’ money on pointless, avoidable litigation.”
By correspondence dated 25 June 2018, the Branch requested that the Division endorse its Business Case document (which, it would appear, the Branch intended to place for consideration before the CEPU’s National Council). The Division did not provide that endorsement. The moneys within the IFPS Fund have remained beyond the Branch’s grasp.
On 23 October 2018, the applicant wrote to the first respondent (who had, by then, succeeded the second respondent as the Branch’s secretary). It is convenient to set that correspondence (hereafter, the “23 October Letter”) out in full (omitting formalities):
I refer to the resolution adopted by Divisional Conference on 10 July 2018, concerning your Branch’s failure to comply with a direction of Divisional Executive. As you are aware, Divisional Executive had required that your Branch reimburse the Divisional Conference an amount in respect of payments to a former employee of the Branch.
By its resolution of 10 July 2018, Divisional Conference authorised me to impose a repayment schedule upon your Branch in respect of the unpaid amount.
In accordance with that resolution, I hereby direct that the Branch remit to the fund of the Divisional Conference the amount of $190,965.91, as follows: (1) monthly payments of $15,000 on or before the 15th of each month, with an initial payment due by the 15th of November 2018, continuing for each month until and including the 15th of October 2019; and (2) a final payment of $10,965.91 payable on or before the 15th of November 2019. Such payments shall be made by cheque or electronic transfer to the same account by which the Branch makes capitation payments to the fund of the Divisional Conference.
Please confirm, within 7 days of the date of this letter, that your Branch will comply with the above direction.
The first respondent replied to the 23 October Letter a week later. Amongst other things, that reply contained the following passages:
The [Divisional Conference R]esolution notes that you have commenced a proceeding in the Federal Court of Australia in respect of the subject matter of the [Divisional Conference R]esolution. That proceeding is continuing. As you are well aware, whether or not the BCOM is under any obligation to perform or observe the Rules in respect of the Divisional Executive Payment Direction is the central issue in the proceeding.
There is no power in Divisional Conference to authorise or endorse an act done outside the Rules. That is, if the demands made by the Divisional Executive in its ‘payment direction’ had no effect, then there is no basis for the Divisional Conference to direct the payment of monies in satisfaction of that otherwise ineffectual direction.
Further, the [Divisional Conference R]esolution purports to authorise the Divisional Executive to impose a requirement as to instalment amounts and payment schedules which, for reasons already the subject of the BCOM’s written contentions in the Court proceeding, the Divisional Executive is unable to do (and the Divisional Secretary is unable to do) having regard to the provisions of rules 7(q) and 47 of the [Divisional] Rules.
In its terms, the validity or otherwise of the Divisional Executive Payment Direction must be determined as an antecedent to the validity or otherwise of the Divisional Conference resolution dated 10 July 2018.
…
In light of the above, I propose to reconsider your correspondence dated 23 October 2018 after your Court application in respect of the Divisional Executive Payment Direction has been heard and determined. To do otherwise would be to pre-empt the outcome of these proceedings which must inevitably address the very questions raised by the purported directions in issue.
A few weeks later, the applicant applied for—and, later, obtained—leave to file an amended originating application. By that amendment, the applicant sought orders under s 164(1) of the FW(RO) Act requiring, in effect, that the Branch comply with the Divisional Conference Resolution. That relief is sought in the alternative to the primary claim, which is for orders that would, in effect, compel the Branch’s compliance with the Divisional Executive Resolution (or otherwise, compel it to repay to the Division the amount that was paid to Ms Willoughby).
As might, by now, be apparent, the Branch has not transferred to the Division any amount in compliance with the Divisional Executive Resolution or the Divisional Conference Resolution, nor any amount by way of reimbursement of what was paid to Ms Willoughby. It is that failure that sits at the heart of the present proceeding. The applicant maintains that the BCOM was obliged by the CEPU Rules to ensure that payment in one of those guises was attended to. It seeks relief in the form of orders that would, in effect, compel the making of those transfers (in one form or another).
For the reasons that follow, none of the orders sought will be granted and the applicant’s amended application should (and will) be dismissed.
THE LEGISLATION AND THE CEPU RULES
Section 164 of the FW(RO) Act provides as follows:
164 Directions for performance of rules
Application for order directing performance of rules
(1)A member of an organisation may apply to the Federal Court for an order under this section in relation to the organisation.
Note: For the meaning of order under this section, see subsection (9).
(2)Before making an order under this section, the Court must give any person against whom the order is sought an opportunity of being heard.
(3)The Court may refuse to deal with an application for an order under this section unless it is satisfied that the applicant has taken all reasonable steps to try to have the matter that is the subject of the application resolved within the organisation.
Court may make interim orders
(4)At any time after the making of an application for an order under this section, the Court may make any interim orders that it considers appropriate and, in particular, orders intended to further the resolution within the organisation concerned of the matter that is the subject of the application.
(5)An order under subsection (4) continues in force, unless expressed to operate for a shorter period or sooner discharged, until the completion of the proceeding concerned.
Definition
(9)In this section:
order under this section means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules.
In this case, the court was not invited to refuse to deal with the application on the ground identified in s 164(3). There is no suggestion—and no apparent basis to think—that the applicant has not taken the steps there contemplated.
Although not invoked in the present matter, s 164A of the FW(RO) Act bears noting. It provides as follows:
164A Directions to rectify breach of rule of organisation
Application for order
(1)A member of an organisation may apply to the Federal Court for an order under subsection (4) in relation to the organisation.
(2)Before making the order, the Court must give any person against whom the order is sought an opportunity of being heard.
Conditions for making order
(3)The Court may make an order under subsection (4) in relation to an organisation if the Court is satisfied that:
(a)a person was under an obligation to perform or observe a rule or rules of the organisation; and
(b)the person breached the rule or rules; and
(c)the person acted unreasonably in so breaching the rule or rules.
Nature of order
(4)Subject to section 164B, the Court may make an order directing one or more persons (who may be, or include, the person who breached the rule or rules) to do specified things that will, in the opinion of the Court, as far as is reasonably practicable, place the organisation in the position in which it would have been if the breach of the rule or rules had not occurred.
(5)The Court may make the order whether or not, at the time of making the order, the person is a member or officer of the organisation.
The exercise of the court’s powers under ss 164 and 164A are subject to various limitations, none of which need be explored further here: FW(RO) Act, s 164B.
Section 164 does not expressly confer upon the court a power to make an order (although it clearly contemplates that such a power exists). To the extent required, jurisdiction is conferred to that end by s 338 of the FW(RO) Act.
There are a number of provisions within the CEPU Rules that assume prominence in this matter. Before setting them out, it is convenient to distinguish the Divisional Rules from the main body (namely, “Section A”) of the CEPU Rules. The latter are more typically (and, hereafter, will be) referred to as the CEPU’s “National Rules”.
Rule 6 of the National Rules provides for the establishment of divisions within the CEPU (including the Division). Rule 6.2.1 provides as follows:
6.2.1 Each 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:
6.2.1.1 the industrial interests of its members;
6.2.1.2 matters arising from the occupational interests of its members;
6.2.1.3 matters of policy pertaining solely to the Division;
6.2.1.4 the election of officers within the Division;
6.2.1.5 responsibility 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; and
6.2.1.6 matters pertaining solely to members covered by sub rules 2.5 to 2.21 inclusively (other than members located in the State of Tasmania), which shall be dealt with by the Communications Division unless otherwise decided by that Division.
Rule 5 of the Divisional Rules is entitled “divisional conference”. Subject to an exclusion not presently relevant, that rule establishes the Divisional Conference as “the supreme governing body of the Division” and identifies how it is to be comprised. Rule 7 of the Divisional Rules enumerates its powers. It relevantly provides as follows:
The Divisional Conference shall be the highest deliberative body of the Division, shall manage the affairs of the Division subject to control by members as provided in the Rules and shall have power to:
…
(q) determine the level and method of payment of monies from Branches to Conference;
…
(u) take disciplinary action against the holders of Divisional and Branch offices as provided for in the Rules;
(v) remove from office the holders of Divisional and Branch offices as provided for in the Rules;
…
(cc) generally to do all acts, matters and things that may appear to Conference to be in the best interests of members;
(dd) without limiting the generality of its powers under (cc) above, exercise all or any of the powers conferred on the Divisional Executive.
Rule 12 of the Divisional Rules enumerates the powers of the Divisional Executive. Relevantly, it provides as follows (emphasis added):
(a) When Divisional Conference is not sitting the Divisional Executive shall, subject to paragraph (b) hereof, exercise all powers of the Divisional Conference and shall be responsible for the management of the Division’s affairs, property and funds.
(b) The Divisional Executive shall not exercise any of the powers of the Divisional Conference described in Rules 7(g), (h), (i), (k), (n), (o), (p), and (q).
Rule 15 of the Divisional Rules is entitled “divisional agenda and out of sessions decisions”. Relevantly, it provides as follows:
(a) All proposals from Divisional Officers, members of Divisional Executive, members of Divisional Conference, Divisional Councils, Branch Committees of Management or Branch General Meetings for consideration by ordinary meetings of the Divisional Executive shall be forwarded to the Divisional Secretary at least two weeks prior to the meeting.
…
(e) At any time when Divisional Executive is not meeting a member of Divisional Executive may move a motion for decision of the Divisional Executive by a vote communicated to the Divisional Secretary by letter, electronic mail, facsimile machine or telephone provided that any vote taken by letter, electronic mail, facsimile machine or telephone shall be confirmed in writing to the Divisional Secretary. Such motions shall be submitted to the Divisional President and may be supported by reasons for the motion. Each member of Divisional Executive shall, as soon as practicable, but no later than 14 days after circulation, return his/her vote to the Divisional Secretary.
…
(h) Notwithstanding the provisions of sub-rule (e) above, the Divisional Secretary and Divisional President may jointly convene a meeting of the Divisional Executive by way of a telephone hook-up.
The Divisional Secretary shall provide to Divisional Executive members reasonable notice of the proposed telephone hook-up of the Divisional Executive.
All decisions made pursuant to this sub-rule shall have the same force and effect as if made under Rule 13 or sub-rule (e) above.
Rule 44 is entitled “formation of branches”. In addition to establishing the Division’s various branches (including the Branch), it provides as follows (emphasis added):
(b) Subject to these Rules, a Branch shall be autonomous in relation to matters affecting only members of the Branch and shall, in accordance with the Rules elect Branch Officers and manage the affairs of the Branch. All Branches shall comply with resolutions of Divisional Conference and Executive.
Rule 45 is headed “divisional conference and divisional executive authority over branches”. It provides as follows:
(a) If a Branch Committee of Management or an Officer of a Branch refuse or fail to comply with these Rules or with a lawful resolution of the Divisional Conference or lawful direction of the Divisional Executive, the Divisional Executive may, after inquiry, determine that the Branch Committee of Management or Officers of the Branch have acted in a manner prejudicial to the good order and government of the Division.
…
(c)Where the Divisional Executive has made a determination under this Rule it may, after inquiry, and after hearing from (or providing reasonable opportunity to be heard to) representatives appointed by the Branch Committee of Management or Officers in defence of themselves or the Branch:
(i) suspend the members of the Branch Committee of Management or Officers from office for such periods not exceeding 12 months as it determines;
(ii) appoint at the expense of the Union a member of the Divisional Executive to conduct and manage the affairs of the Branch during the period of suspension, subject to the direction of the Divisional Executive; and
(iii) require such Branch Committee of Management to deliver up to the person so appointed all the funds of the Branch.
…
(f) All property, money and books of the Branch in respect of which there is a determination under paragraph (a) of this Rule shall, on demand made by the Divisional Executive to a person or member having the custody or control of same be forthwith delivered up to the person charged to receive them as specified in the demand.
Rule 47 of the Divisional Rules is entitled “contribution to divisional conference”. It provides for what are, apparently, known within the CEPU as “capitation fees”: specifically, amounts that the Division’s branches (including the Branch) must remit to the Divisional Conference. Sub-rule 47(a), at the time relevant to this application, provided as follows:
(a) Divisional Conference shall, from time to time, determine the percentage of members’ contributions to be paid to Conference by Branches but at no time shall the contribution be set at less than 22.5% of members’ contributions.
Rule 76A of the Divisional Rules establishes the Branch’s BCOM. Its duties and powers are set out in r 77 of the Divisional Rules. Rule 77(a) provides that the BCOM must “…take such steps as may be necessary to carry out…the resolutions of the…Divisional Conference and the instructions of the Divisional Executive…”
Rule 88 confers upon the BCOM a power:
…to impose a levy not exceeding two dollars ($2) a week upon the members of [the Branch], provided that any proposal to impose a levy shall be notified at least fourteen (14) days prior to the date fixed for the holding of the meeting at which the proposal is to be discussed.
ADDITION OF AND DISCONTINUANCE AS AGAINST CERTAIN RESPONDENTS
At the commencement of the trial, Mr White—who appeared for most of the respondents (and, as will soon become clear, all of the respondents against whom the applicant maintains his suit)—indicated that the composition of the Branch’s BCOM had changed since the commencement of the proceeding. Six of the original respondents—specifically, the second, ninth, tenth, twelfth, thirteenth and fourteenth respondents—no longer served on the BCOM. Counsel for the applicant indicated his client’s consent to the matter being discontinued as against those respondents.
Additionally, Mr White indicated that two other persons—namely, Mr David Ketchion and Mr Andrew Young (for each of whom Mr White had instructions to act)—now partly comprise the BCOM. It was agreed—again, sensibly, if I might say so—that those men should be added as respondents to the action. I indicated at the hearing that I would make orders of that nature.
The end result is that the matter proceeds as against all of the current members of the BCOM (or, at least, those who were such at the time of the hearing) and is discontinued as against those of the respondents who are not now BCOM members (or who were not at the time of the hearing). Hereafter, references to the “respondents” should be understood as references to those respondents against whom the applicant’s suit continues to be pressed.
Throughout these reasons for judgment, I will refer to the BCOM, the Divisional Executive, the Divisional Conference and the CEPU’s National Council as though each is an entity in and of itself. That, of course, is not the case; but it is convenient to refer to those bodies rather than to the individuals who comprise (or comprised) them. Doing so is consistent with the manner in which the parties’ submissions were advanced and I anticipate no ambiguity as to what is meant by each such reference. References herein to things that are or were required of, or powers that are or were conferred upon, those various bodies should be read and understood as references to things that the individuals who comprised them are or were, collectively, required or able to do.
Similarly, reference is made throughout these reasons for judgment to sums of money being transferred or paid, or being required to be transferred or paid, by the Branch to the Division. Clearly, neither the Branch nor the Division is or was capable of holding property in its own right. The only relevant legal entity capable of doing so is and was the CEPU. Those references, then, are to be understood as references to the transfer or payment of money from an account or funds controlled by the Branch to an account or funds controlled by the Division. Again, that is consistent with the manner in which the parties’ submissions were advanced and there is no ambiguity as to what is meant by each such reference.
THE EVIDENCE
The applicant was the sole witness in his own case. He read four affidavits, namely:
(1)an affidavit that he swore on 13 February 2018;
(2)an affidavit that he swore on 21 June 2018;
(3)an affidavit that he swore on 10 August 2018; and
(4)an affidavit that he swore on 4 February 2019.
Those affidavits were read subject to objections that were resolved without the court’s intervention. The applicant was cross-examined in respect of some of that affidavit evidence.
The respondents led evidence from each of the first and second respondents (who are, respectively, the current and former secretary of the Branch). They read five affidavits, namely:
(1)an affidavit affirmed by the second respondent on 27 July 2018;
(2)an affidavit sworn by the first respondent on 27 July 2018;
(3)an affidavit sworn by the first respondent on 28 February 2019;
(4)an affidavit sworn by the first respondent on 13 May 2019; and
(5)an affidavit sworn by the first respondent on 23 September 2019.
Those affidavits were read without objection. Each of the first and second respondents was cross-examined.
The trial uncovered very little in the way of contested evidence. All of the summary that appears above ([9]-[27]) emerges without controversy from the affidavit evidence that was put before the court.
The cross-examination of the applicant fixed substantially upon the financial position of the Branch and his state of mind when he wrote the 23 October Letter (by which he purported to exercise the power reposed in him by the Divisional Conference Resolution). I address that financial position in more detail below: it suffices, for now, to summarise that the Branch has (and had) limited financial resources. It was put to the applicant that it was not reasonable to expect—and, more precisely, that he could not reasonably have expected—that the Branch should pay to the Division the amounts that were demanded of it given its perilous financial state. He denied that those expectations were unreasonable. Of particular significance, he gave the following evidence during cross-examination:
Given your answers to questions so far that you thought you were just providing the resolution of the divisional conference, is it fair to say then that you didn’t at that time turn your mind to whether the payment of $15,000 a month was reasonable?---No, I didn’t turn my mind to whether it was reasonable. It was the decision of a conference and I implemented it.
The first respondent was cross-examined about the Branch’s financial position. She accepted that, at the time that Ms Willoughby’s employment was terminated, the BCOM was aware that the Branch could not access the IFPS Fund in order to cover her entitlements. She maintained that it was with the Division, rather than the Branch, that liability for those entitlements rested. That, she said, was the effect of r 6.2.1.5 of the National Rules (above, [35]).
Counsel for the applicant also explored with the first respondent the Branch’s capacity to repay to the Division the amount that the Division had paid to Ms Willoughby. It emerged that the Branch has recently made “savage” cuts to its operating expenses; but has not investigated the possibility of petitioning the CEPU’s National Council for a loan, nor of imposing upon its membership a levy under r 88 of the Divisional Rules (above, [43]).
The second respondent’s cross-examination centred upon his state of mind at the point that Ms Willoughby’s employment was terminated. He accepted, as the first respondent did, that he understood at that point that the Branch would not be permitted to draw from the IFPS Fund to satisfy any of Ms Willoughby’s termination entitlements.
THE COMPETING CONTENTIONS
The applicant’s contentions are simple enough. He submits, first, that the Branch (via the agency of the BCOM that administered it) was obliged to comply with the Divisional Executive Resolution and has failed to do so. In the alternative, he says the same about the Divisional Conference Resolution (or, perhaps more precisely, about his 23 October Letter, by which he sought to exercise the discretion that the Divisional Conference Resolution conferred upon him and, thereby, to trigger the repayment to which that resolution referred). Either way, he says that it is appropriate for the court to make an order under s 164 of the FW(RO) Act directing the BCOM to comply with the CEPU Rules by paying what has been demanded.
The respondents’ contentions are more complicated. They distil into three broad categories, the first two of which are related. First, it is said that the Divisional Executive Resolution was invalid and of no effect, such that it cannot be said that the Branch has failed to do anything that the CEPU Rules obliged it to do. Second, the same point is made with respect to the Divisional Conference Resolution (and/or the 23 October Letter that purported to trigger the obligation for which it provided). Third, it is said that the court should decline, in any event, to grant relief on discretionary grounds. With that skeletal description of the respondents’ case stated, some analysis of the particulars of each aspect of it is warranted.
Validity of the Divisional Executive Resolution
Insofar as concerns the alleged invalidity of the Divisional Executive Resolution, the respondents say two things.
First, it is said that the meeting of the Divisional Executive at which the resolution was passed was not a valid meeting. In order to have been validly called, it was necessary for the Division’s president and secretary (or, at the time, acting secretary) to give reasonable notice of the meeting to the other members of the Divisional Executive. As matters transpired, notice was given by email at 3:56pm on the afternoon of Thursday, 12 October 2017 for a meeting that commenced at 12:00pm the following day. That, so the respondents maintain, was not notice sufficient to qualify as reasonable.
Second, it is said that the Divisional Executive Resolution amounted to the exercise of a power that the Divisional Executive did not possess. The respondents contend that the resolution sought to determine the level and method of payment of moneys from the Branch to the Division, which is a power that rr 7(q) and 12(b) of the Divisional Rules (above, [36]-[37]) reserve exclusively unto the Divisional Conference.
Validity of the Divisional Conference Resolution
Insofar as concerns the alleged invalidity of the Divisional Conference Resolution (or the 23 October Letter that was issued in respect of it), the respondents’ contentions distil into five subcategories, each consisting of elemental submissions.
First—and insofar as the Divisional Conference Resolution sought to “ratify”, “authorise” and/or “endorse” the Divisional Execution Resolution (as was the apparent intent of its first paragraph)—the respondents contend that:
(1)such ratification must be taken to acknowledge that the Divisional Executive Resolution was defective (such that the applicant ought not to seek, as he does, orders to compel compliance with it);
(2)because the Divisional Executive Resolution involved property rights, ratification by the Divisional Conference could only operate prospectively, rather than retrospectively (in that respect, reliance was placed upon the decision of the High Court in Construction, Forestry, Mining and Energy Union; ex parté WJ Dean & Sons Pty Ltd (1994) 181 CLR 539, 545 (Mason CJ, Dawson and McHugh JJ));
(3)because the Divisional Executive Resolution stipulated dates upon which the Branch was obliged to make payments—and because, by the time that the Divisional Conference Resolution was carried, those dates had passed—it was “practically impossible to ratify a resolution after the time for compliance with the resolution ha[d] passed”;
(4)in light of the above, the court should conclude that “[t]here has not been, and cannot be, any valid ratification by the Divisional Conference of the ineffective and invalid resolution of the Divisional Executive”;
(5)the Divisional Conference was not empowered by the CEPU Rules to “authorise” or “endorse” an act of the Divisional Executive that was, itself, done without power; and
(6)the first paragraph of the Divisional Conference Resolution “…is so internally inconsistent…as to be meaningless”.
Second—and insofar as the Divisional Conference Resolution sought to direct that the Branch pay the Division the amount of $190,965.91 “in satisfaction of the demands made by the [Divisional Executive Resolution]” and “subject to this resolution” (as was the apparent intent of its second paragraph)—the respondents contend that:
(1)the Divisional Conference had no power to require compliance with a resolution that was not made in accordance with the CEPU Rules;
(2)because the Divisional Executive Resolution stipulated dates upon which the Branch was obliged to make payments—and because, by the time that the Divisional Conference Resolution was carried, those dates had passed—that aspect of the Divisional Conference Resolution was invalid because it was not possible for the Branch to comply with it; and
(3)the Divisional Rules did not, in any event, invest in the Divisional Conference a power to impose upon the Branch a requirement that it pay the amount that was demanded.
Third—and insofar as the Divisional Conference Resolution sought to invest in the applicant a power to nominate the manner, amounts and times by which the BCOM was to comply with the demand for payment contained in its second paragraph (as was the apparent intent of its third paragraph)—the respondents contend that:
(1)because the Divisional Executive Resolution—which the Divisional Conference Resolution purported to ratify, authorise and endorse—already contained the particulars that were now to be nominated by the applicant, that (third) paragraph of the Divisional Conference Resolution was so inconsistent with its earlier provisions as to be “meaningless and incapable of compliance”; and
(2)the investment of those powers in the applicant amounted to an impermissible delegation of the powers of the Divisional Conference and, for that reason, was of no force or effect.
Fourth—and insofar as the Divisional Conference Resolution sought to place limitations upon the applicant’s discretion to nominate the manner, amounts and times by which the BCOM was to comply with the demand for payment contained in its second paragraph (as was the apparent intent of the fourth paragraph)—the respondents contend that:
(1)because the Divisional Executive Resolution—which the Divisional Conference Resolution purported to ratify, authorise and endorse—already contained the particulars that were to be nominated by the applicant, that (fourth) paragraph of the Divisional Conference Resolution was so inconsistent with its earlier provisions as to be “meaningless and incapable of compliance”; and
(2)it was beyond the power of the Divisional Conference to invest in the applicant the authority that it purported to invest in him.
Fifth—and in relation to the 23 October Letter by which the applicant purported to exercise the authority reposed in him by the Divisional Conference Resolution—the respondents contend that the payment regime that the applicant sought to impose upon the Branch was not one that he considered to be reasonable in the circumstances. They describe that regime—$15,000.00 per month—as “patently an unreasonable demand”; a circumstance of which they attribute to the applicant some awareness.
Discretionary considerations
Even assuming that either or both of the Divisional Executive Resolution or the Divisional Conference Resolution (or, in the case of the latter, the 23 October Letter that purported to give effect to it) were valid, the respondents contend nonetheless that the court should decline, on discretionary grounds, to grant the relief that is sought. That submission is put in four ways.
First, it is said that the court should refrain from granting relief because it would be futile to do so. The Branch, so the submission continues, does not have the means to pay the Division what has been demanded. Perhaps more accurately, it is said that assets to which the Branch has access are insufficient to meet those demands. Were the court to order that the BCOM do what is unable to be done, the result would be the respondents’ potential exposure to individual charges of non-compliance with the court’s orders (and, potentially, contempt of the court).
Second, it is said that a grant of relief in the form sought would run the risk that the Branch would need to be “placed in administration” (in the sense described by r 45 of the Divisional Rules). That, the submission continued, would lead to membership resignations, which would significantly compromise the Branch’s operations and its capacity to represent those whose memberships remained in place. The Branch has, in recent times, embarked upon measures to shore up its financial position, including by means of cost cutting and the engagement of a membership officer. An order requiring what the Division has demanded would put those measures (and the viability of the Branch more broadly) at risk.
Third, it is said that the court should decline to grant relief on discretionary grounds because of the Division’s refusal to endorse the Branch’s Business Case document (above, [22]).
Additionally, the respondents made much of the fact that the time (or times) by which the Division (and the applicant) sought to compel the BCOM to pay what was demanded has long since passed. Predominantly, that submission was put as a reason why the court should find that the Division’s (and, in the case of the 23 October Letter, the applicant’s) decrees were invalid. To me (and for reasons that will be explained), it looms larger in the context of the court’s discretion to grant the relief that the applicant seeks. It probably (again, for reasons that will be explained) looms even more elementally than that: namely, as an issue going to the court’s power to grant the relief that the applicant seeks.
VALIDITY OF THE DIVISIONAL EXECUTIVE RESOLUTION
I turn, then, to consider the two respects in which the respondents submit that the Divisional Executive Resolution was invalid.
How much notice was reasonable?
The evidence concerning the calling and holding of the meeting at which the Divisional Executive Resolution was passed was not controversial. The meeting was called by means of an email communication that was sent to the members of the Divisional Executive at 3:56pm on Thursday, 12 October 2017. The meeting of which notice was thus given was to take place—and did take place—at 12:00pm the following day.
The respondents say that the amount of notice given—in the order of four business hours—was not reasonable. That was said to be so because:
(1)the business to be transacted at the meeting was not sufficiently urgent;
(2)the members of the Divisional Executive were geographically dispersed;
(3)the participants were not all full-time officials of the CEPU;
(4)there was limited, if any, chance for members of the Divisional Executive to appoint proxies to attend the meeting in their stead;
(5)at least some of the members of the Division’s Divisional Executive were unable to attend the meeting (personally or by proxy); and
(6)the CEPU and Divisional Rules provide guidance about the amount of notice required in respect of other species of meetings—those notice periods range up to 14 days and, in any event, do not suggest that notice of as little as four business hours of a meeting of the Division’s Divisional Executive should qualify as reasonable.
It was not obviously in contest that the meeting at which the Divisional Executive Resolution was passed would be a nullity if it was called contrary to the requirements of the Divisional Rules. The respondents referred the court in that respect to Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corp (1975) 11 SASR 504, 527 (Wells J). I accept that proposition, as well as the related proposition that, subject to any later ratification, the business conducted at such a meeting would also be a nullity. The validity of the Divisional Executive Resolution thus depends upon the validity of the meeting from which it emerged.
I reject the respondents’ contention that that meeting was called otherwise than on the provision of reasonable notice. On the contrary, I am satisfied that the notice that was given was reasonable having regard to the following, namely that:
(1)the notice was provided by email (and can be understood to have been received more or less immediately by those to whom it was addressed);
(2)the meeting that was the subject of that notice was to be (and was) conducted by telephone (a circumstance that at least largely accommodates the fact that the members of the Divisional Executive were geographically dispersed);
(3)the subject matter to which that meeting was to be (and was) directed was limited to what ultimately became the Divisional Executive Resolution; and
(4)the letter that the Division had received from Ms Willoughby’s lawyers (above, [13]) gave it until the following day (Friday, 13 October 2017) to resolve the issue of—and, indeed to pay—her outstanding termination entitlements.
Plainly, it would have been preferable had notice of the meeting been given earlier, or in such a way that might more easily have permitted the appointment of proxies to attend in place of those members of the Divisional Executive who were unable to. The fact that that did not occur, however, is not sufficient to render the amount of notice that was given as something less than reasonable. The circumstances to which the respondents point are not sufficient to bring the amount of notice that was given below what might fairly qualify as reasonable.
Was the Divisional Executive Resolution made beyond power?
The respondents contend that, by making the Divisional Executive Resolution, the Division’s Divisional Executive purported to exercise a power vested exclusively in the Divisional Conference: specifically, the power described by r 7(q) of the Divisional Rules (above, [36]).
Rule 12(a) of the Divisional Rules (above, [37]) invests in the Divisional Executive all of the powers enjoyed by the Divisional Conference. The latter has (and, at all times, had) very broad powers to do whatever it considered to be in the best interests of members (see Divisional Rules, r 7(cc)). Rule 12(b), however, acts as a restriction on that otherwise general conferral of power: amongst others, the Divisional Executive is not competent to exercise the power conferred upon the Divisional Conference by r 7(q). At issue presently, then, is whether the Divisional Executive Resolution amounted to a determination of “the level and method of payment of monies from [the Branch] to [the Division]”.
Albeit with some hesitation, I do not consider that it did.
No evidence was placed before the court concerning the origins of rr 12(b) or 7(q) of the Divisional Rules. There was no evidence by reference to which the court could determine or infer the purpose to which either was directed (assuming, of course, that the court was permitted to take account of such evidence). Instead, the court is left to determine what is contemplated by r 7(q) from its terms and the other rules that provide context for them.
The respondents contend that, by making the Divisional Executive Resolution, the Divisional Executive “determine[d] the level and method of payment of monies” that the Branch was to remit to the Division. That being so, it involved the exercise of a power reserved exclusively unto the Divisional Conference. There is, with respect, significant force in that submission.
The applicant, by contrast, contends that the reference in r 7(q) to the determination of the level and method of payments to be made by the Branch to the Division is a reference to the setting of capitation fees payable by all branches. By r 47 of the Divisional Rules (above, [41]), such fees are to be set from time to time. Rule 7(q), he maintains, is directed to that endeavour. It is not, he says, a power to require a branch to pay the Division money. Power to do that is inherent within the plenary power to which r 7(cc) of the Divisional Rules refers, which is not within the list of powers that r 12(b) puts outside the realm of the Divisional Executive.
Again with some hesitation, I accept that submission. The reference in r 7(q) to the Divisional Conference “determin[ing]” what the Division’s branches are to pay betrays a recognition that they will be required to pay something. That inevitability is inherent: the rule contemplates that there will be moneys that branches are required to pay to the Division; the only variability is as to how much and how (which, of course, are the subjects to which the exercise of the power is directed). That, in turn, is consistent with r 47 of the Divisional Rules.
Rule 7(q) of the Divisional Rules is not, in that sense, properly understood as a power to require that a branch pay money to the Division. The source of that power (insofar as it resides with Divisional Conference) is not expressed in the Divisional Rules. It falls, instead, within the boundaries of the plenary power conferred upon that body by r 7(cc) of the Divisional Rules. That, in turn, is a power that is conferred upon the Divisional Executive (albeit with restrictions): Divisional Rules, r 12(a) (above, [37]).
It follows that the Divisional Executive Resolution did not involve the exercise of a power with which the Divisional Executive was not invested.
Conclusion
The Divisional Executive Resolution was validly made. The BCOM was required to comply with it: Divisional Rules, rr 44(b) and 77(a) (above, [39], [42]).
VALIDITY OF THE DIVISIONAL CONFERENCE RESOLUTION
As is outlined above, the respondents’ contentions with respect to the Divisional Conference Resolution distil into five discrete categories. The first four correspond, in order, with the four paragraphs of the Divisional Conference Resolution. The fifth relates to the 23 October Letter, by which the applicant purported to exercise the power conferred upon him by the last of those four paragraphs.
The conclusion reached above in respect of the Divisional Executive Resolution resolves some, but not all, of the questions that the respondents have raised about the validity of the Divisional Conference Resolution. It is convenient now to turn to those questions.
Ratification, authorisation and endorsement of the Divisional Executive Resolution
The respondents contend that the first paragraph of the Divisional Conference Resolution “…is so internally inconsistent…as to be meaningless”. I reject that submission. It proceeds upon an unrealistic and pedantic parsing of the terms in which the paragraph—and the resolution more broadly—is expressed. The meaning of the paragraph—read both alone and in context—is beyond any real doubt. Its purpose was to clothe with the authority of the Divisional Conference the requirement that had been imposed upon the Branch by the Divisional Executive: namely, the requirement that the Branch pay to the Division what the Division had paid to Ms Willoughby. The Divisional Conference sought to succeed where the Divisional Executive had failed (wrongly or otherwise).
It is not the case that the Divisional Conference’s “ratification” of the Divisional Executive Resolution implied that the latter was invalid. The Macquarie Dictionary defines “ratify” as:
1.to confirm by expressing consent, approval, or formal sanction.
2.to confirm (something done or arranged by an agent or by representatives) by such action.
In context, it is abundantly clear that the Divisional Conference sought to impress upon the BCOM that compliance with the Divisional Executive Resolution was not optional. It might well have done so in terms less susceptible to the kind of criticisms that the respondents now level: perhaps other verbs would have been more suitable; perhaps it was not necessary to use all of the verbs (ratify, authorise, endorse) that were used. But there is no room to doubt that the respondents understood perfectly well what the paragraph sought to convey, no matter the minor imperfections inherent within it, upon which they now seek to capitalise. Respectfully, the submission that it was unclear what was meant by that paragraph, or that it lacked any apparent meaning, is contrived.
In a similar vein, I reject the submission that the Divisional Conference was not competent to “authorise” or “endorse” the Divisional Executive Resolution. As I have concluded above, the Divisional Executive Resolution was validly made and ought to have been complied with. The Divisional Conference did not need to ratify, authorise or endorse it; but, by doing so, it could only be understood as impressing upon the BCOM that the Branch should pay what had been demanded.
That end was, of course, achieved by the remainder of the resolution. Even assuming that the first paragraph of the Divisional Conference Resolution left the BCOM in some doubt as to what, if anything, was required of it vis-à-vis the Divisional Executive Resolution (an assumption to which, to be clear, I have not been drawn), that doubt was plainly extinguished by the remainder of the resolution. Read in context, the Divisional Conference Resolution required that the Branch pay the Division what the Division had paid to Ms Willoughby. I do not accept that there was any doubt about that such that the Divisional Conference Resolution (or the constituent parts of it) might be impugned in the way that the respondents seek to impugn it (or them).
It is also not the case that any ratification of the Divisional Executive Resolution was necessarily prospective on account of its “involv[ing] property rights”. To say, as the respondents do, that the resolution involved property rights is to ignore the reality that the Branch and the Division are not separate legal entities. Property in the funds that the Division sought to require the Branch to transfer vested—and would continue to vest—solely in the CEPU. The Divisional Executive Resolution did not change, nor seek to change, that reality. It did nothing more than require that control over funds belonging to the CEPU be shifted from one part of the union to another.
The respondents’ best point, with respect, is that the deadline by which the Divisional Executive Resolution required payment, or part-payment, of the funds demanded had come and gone. By the time of the Divisional Conference Resolution, it was no longer possible for the BCOM to comply with the terms of the Divisional Executive Resolution. How, the respondents posit, could the Divisional Conference validly ratify, authorise or endorse something with which it was impossible for the BCOM to comply?
Again, that submission proceeds upon an unduly narrow deconstruction of the terms of the Divisional Conference Resolution. The answer to it lies in what the Divisional Conference Resolution, when fairly read, should be understood to have required of the BCOM (and, by extension, what the BCOM must fairly have understood was required of it). As has already been stated, the clear object of the resolution was to impress upon the BCOM that the Branch was required to pay to the Division what the Division had paid to Ms Willoughby. Whatever criticisms might be levelled at the Divisional Conference Resolution and whatever infelicities a careful parsing of the words in which it (or its first paragraph) was expressed might illuminate, it cannot fairly be said that the BCOM might have laboured under any real doubt about what the Division had sought to require of it (see above, [94]).
That being the case, I do not accept that the first paragraph of the Divisional Conference Resolution was in any way invalid, whether because it was “so internally inconsistent…as to be meaningless” or otherwise.
“Satisfaction” of the demands inherent in the Divisional Executive Resolution
The contentions that the respondents advance in respect of the second paragraph of the Divisional Conference Resolution (above, [63]) are addressed by conclusions already stated.
I do not accept that the Divisional Conference lacked a power to require payment by the Branch of the amount that the Divisional Conference Resolution unambiguously sought to require. Again, the respondents’ contentions rest upon an unrealistically pedantic construction of the terms in which the Divisional Conference Resolution (including the second paragraph thereof) is expressed. There is no room to doubt that the resolution sought to impress—and could only reasonably be understood to have impressed—upon the BCOM that the Branch was required to pay to the Division what the Division had paid to Ms Willoughby (see above, [94]).
The powers of the Divisional Conference, whilst not absolute, were nonetheless broad enough to require that the Branch pay to the Division what the Division had paid to Ms Willoughby. The respondents’ submission to the contrary—namely, that the plenary power that r 7(cc) of the Divisional Rules vests in the Divisional Conference “…is not so broad as to permit the Divisional Conference, or the Divisional Executive, to impose financial burdens on Branches”—must be rejected. The plenary power is just that: a power to do all things that appear to be in the best interests of members. There is nothing in the Divisional Rules—including in the aspiration of branch-level autonomy to which the CEPU Rules expressly give effect—that requires, by implication, some reading down of that broad power insofar as concerns the imposition by the Division of monetary burdens upon its branches.
Even had I concluded that the Divisional Executive Resolution trespassed beyond the powers that the Divisional Rules vested in the Divisional Executive (and was, for that reason, a nullity or otherwise invalid), I still would not accept the respondents’ submission that the second paragraph of the Divisional Conference Resolution was invalid insofar as it required compliance with what the Divisional Executive had demanded. As I have already stated, the object of the Divisional Conference Resolution, no matter what criticisms might be levelled at its terms, was abundantly clear: namely, to require that the Branch pay to the Division what the Division had paid to Ms Willoughby. That was what the Divisional Executive had demanded and it was to the “satisfaction” of that demand that the Divisional Conference Resolution was quite obviously directed. Whether that demand was within the power of the Divisional Executive to make is irrelevant. It was a demand nonetheless and the Divisional Conference enjoyed a power to require that it be satisfied. Doing so was, in effect, an extension of the Divisional Conference’s having ratified, authorised or endorsed the Divisional Executive Resolution: it was (and could only reasonably have been construed as) a demand by the Divisional Conference that the Branch do what had been demanded (validly or otherwise) by the Divisional Executive, namely pay what was paid to Ms Willoughby. Again, intending no disrespect to them or those who have advised them, the respondents’ submission to the contrary rests upon an unrealistic (indeed, contrived) construction of the terms in which the Divisional Conference Resolution (and the second paragraph thereof) was expressed.
Again (and for the reasons explored above at [96]-[97]), the fact that the time for compliance with the Divisional Executive Resolution had passed does not alter that conclusion.
It follows that the second paragraph of the Divisional Conference Resolution was not invalid.
The applicant’s power to direct how the Branch should pay
For reasons that will surely now be obvious, I do not accept the respondents’ submission that the third paragraph of the Divisional Conference Resolution was so inconsistent with its other provisions as to be “meaningless and incapable of compliance”. Again, that submission involves an unrealistic construction of the terms of the Divisional Conference Resolution as a whole. It is beyond doubt that that resolution was intended (and was understood) to stand as a direction to the BCOM that it was to pay to the Division what the Division had paid to Ms Willoughby.
Even assuming that there was some inconsistency inherent in simultaneously ratifying (or authorising or endorsing) the Divisional Executive Resolution (on the one hand) and requiring that the Branch make payments in line with potentially (indeed, inevitably) different parameters (on the other), that is not sufficient to invalidate part or all of the Divisional Conference Resolution. At issue—particularly in the face of any ambiguity or uncertainty inherent in the words used—is what was intended and understood to be the purpose underlying the Divisional Conference Resolution. At the risk of repetition, there is no room to doubt that it was intended and understood as a direction that the Branch should pay to the Division what the Division had paid to Ms Willoughby. The Divisional Conference sought to achieve that—and can only sensibly be understood to have sought to achieve that—by requiring that the Branch pay the amount demanded as contemplated by the third and fourth paragraphs of its resolution. That objective is sufficiently (indeed patently) clear from the terms that were used, no matter the minor infelicities upon which the respondents have here sought to capitalise.
It is unclear whether the respondents persist with their submission that the third paragraph of the Divisional Conference Resolution amounts to an impermissible delegation of the Divisional Conference’s powers. That submission found expression in their written submissions but was not elaborated upon orally. Regardless, I do not accept it. The Divisional Conference Resolution did not seek to invest in the applicant a power to determine what the Branch was to pay; it merely authorised him, subject to limitations expressed in the final paragraph, to nominate how (which is to say, in what manner or by what instalments, and at what times) the amount identified should be paid. There is nothing in the Divisional Rules that prohibits such a delegation. Indeed, it would seem consistent with r 40(xiv), which confers upon the Division’s secretary an obligation to undertake “…such special duties and responsibilities as required and directed by Divisional Conference or Executive”.
It follows that the third paragraph of the Divisional Conference Resolution was not invalid.
The conferral of limitations upon the applicant’s power
The contentions that the respondents advance in respect of the final paragraph of the Divisional Conference Resolution (above, [65]) are also addressed by conclusions already stated.
For reasons equivalent to those stated above (at [106]), I do not accept that the final paragraph of the Divisional Conference Resolution was so inconsistent with its earlier provisions as to be “meaningless and incapable of compliance”. I also reject the respondents’ submission that the powers that the Divisional Conference sought, by that paragraph, to confer upon the applicant were beyond what the Divisional Rules empowered it to confer (and, in that respect, I refer to what appears at [107] above).
Reasonableness of the 23 October Letter
The respondents contend that the payment regime that the applicant’s 23 October Letter purported to impose upon the Branch was not one that the Divisional Conference Resolution authorised the applicant to impose. That authority, the submission continues, was conditioned upon the applicant’s satisfaction that the payment regime that he sought to impose was “reasonable in the circumstances”. The respondents contend that the payment regime to which the 23 October Letter refers was “patently an unreasonable demand” and that the applicant either knew as much or, in any event, did not satisfy himself otherwise. For obvious (and sound) reasons, they rely upon the evidence that he gave in cross-examination: namely, that he “…didn’t turn [his] mind to whether it was reasonable” (above, [52]).
Whether, objectively, the instalment regime to which the 23 October Letter purported to give effect was reasonable is not directly relevant. At issue is whether the applicant should be understood to have considered, in the circumstances, that it was. The objective unreasonableness of any such regime—if it might fairly be impugned in that way—could be indirectly relevant insofar as it might serve as a circumstance from which the court could infer that the applicant did not consider that it was reasonable.
For reasons considered in more detail below (at [126]-[135]) in the context of discretion, I do not accept that the instalment regime that the 23 October Letter purported to impose was unreasonable, patently or otherwise. The respondents did not identify any other circumstance from which it was suggested that the court should infer that the applicant lacked the state of mind upon which an exercise of the power conferred upon him by the Divisional Conference Resolution was conditioned (namely, that he considered that the payment regime to which his 23 October Letter referred was reasonable in the circumstances). Instead, they invited the court to conclude as much directly from the evidence that he gave in cross-examination.
Respectfully, there is force in the respondents’ submission. If, as he said, the applicant did not turn his mind to whether or not it was reasonable to impose the instalment regime that he sought to impose by means of the 23 October Letter, how might it be said that he did, in fact, consider that the imposition of that regime was “reasonable in the circumstances”?
The applicant’s evidence in this regard was, to say the least, confusing. Prior to making the concession upon which the respondents understandably fix, he was involved in the following exchange with the respondents’ counsel:
[MR WHITE:] I will just read the last two lines of resolution 4:
...and otherwise authorises the divisional secretary to impose any instalment amounts and payment schedules as he considers reasonable in the circumstances.
Do you see that?---Yes.
Now, have you imposed any instalment amounts of a payment schedule?---Other than the 15,000? No.
Well, why do you say “other than the 15,000”?---Well, I took the 15,000 to be the instalment amount.
And when did you impose that as an instalment amount?---By providing the copy of the resolution.
So once again – I don’t want to be repetitive, but the letter from you to Ms Riley of 23 October 2018, which is attachment GR28 to your affidavit of 4 February 2019, was not the imposition by you of an instalment amount and payment schedule; is that your evidence?---It’s not an imposition. It is me implementing the decision of conference.
There’s no resolution of the conference that there be a schedule of payments of $15,000 per month, is there?---I think that resolution of whatever date it is – 10 July 2018 – I think it does - - -
Yes?--- - - - in my view.
All right. To the extent that if you were to have made a direction that there be payment of $15,000 a month, you would accept, given the operating situation of the branch, that that would have been an unreasonable demand?---No, I don’t believe it to be unreasonable.
Because out of a profit – operating profit of about $32,000, it is clear by any means of arithmetic that it doesn’t have the income to pay $15,000 a month; that’s right, isn’t it?---Correct – or I would assume that to be correct, yes.
Yes. And that, if – to the extent that there was a demand that required payment of $15,000 a month out of operating income, that would be, on the facts, plainly unreasonable?---I haven’t stipulated where they pay it from. I have just stipulated that they owe the money.
Can you answer my question, please?---No, I still don’t believe it to be unreasonable.
So perhaps you can explain to the court that if moneys were to be paid out of an operating budget of $15,000 a month on an annual profit of $30,000 or so, how that can be done, how payments of that magnitude can be paid from the operating expenditure – operating income of the branch?---Well, clearly, it can’t be paid from the operating expenditure, but they had other resources that they could attempt to access. The repayment amount was – or the – how you repay the loan, whether you have capacity to repay the loan, wasn’t my – of my doing. Was it reasonable that they offered the redundancy and took the 190,000 in the first place?
Perhaps you can limit yourself to the question?---The question is no, I don’t think it was unreasonable.
And given that the cash or cash equivalents were used to fund the operations of the branch, the requirement to pay a capital sum out of that, similarly, can I suggest to you, would be unreasonable?---No, I still don’t believe it to be unreasonable.
Particularly in circumstances where it was only for the last couple of years there has been an operating cost of about 30,000?---I still don’t believe it to be unreasonable. If it was – if it was determined to be unreasonable by the branch, I’ve got to ask the question why wouldn’t the branch come to me and enter into some other form of payment?
Well, Mr Rayner, can you just limit yourself to answering my questions?---Certainly.
Do you say, just so I can be clear, that payment of capital sum of 15,000 a month out of the cash reserves which are used to fund the operations of the branch, which render a profit of $30,000 is a reasonable direction?---Yes, I do.
A question was then asked, objected to and withdrawn, following which the cross-examination continued:
MR WHITE: All right. Well, Mr Rayner, can I just make sure that it’s clear that it will be put that it is a completely unreasonable demand to pay $15,000 a month in circumstances where the operating profit of the branch is $30,000 a year?---You can put that. In my opinion, it is not unreasonable and in the opinion of the divisional conference it wasn’t unreasonable.
And can I suggest to you that it is an unreasonable demand to pay $15,000 a month out of the capital of the branch, which capital is used to fund its operations?---Again, you may put that, but the – I don’t believe it unreasonable, nor did the divisional executive or the divisional conference deem it unreasonable.
That evidence is difficult, although not impossible, to reconcile with the evidence that the applicant then gave (and upon which the respondents fairly seize), namely:
[MR WHITE:] Given your answers to questions so far that you thought you were just providing the resolution of the divisional conference, is it fair to say then that you didn’t at that time turn your mind to whether the payment of $15,000 a month was reasonable?---No, I didn’t turn my mind to whether it was reasonable. It was the decision of a conference and I implemented it.
Clearly enough, the applicant’s evidence that he did not impose any instalment regime upon the Branch was open to valid criticism. It was plainly inconsistent with—and unsustainable in light of—the 23 October Letter. For reasons not immediately apparent (or important), it appears that the applicant was keen to impress upon the court that the 23 October Letter was not a course upon which he embarked on a frolic. Rather, it was something to which he gave effect for the purposes of “implementing the decision of the conference”.
It is within the context of that evidence that his subsequent statement (about having not turned his mind to whether or not it was reasonable to impose the instalment regime to which the 23 October Letter referred) should be construed. Properly understood, his evidence was that the Divisional Conference Resolution licensed him to impose an instalment regime at the upper limit of what the Divisional Conference therein identified (namely, $15,000.00 per calendar month). He understood both the Divisional Executive and the Divisional Conference to hold that upper limit as reasonable (a position with which, by his evidence, it was apparent that he concurred, at least at the time that he was cross-examined). That being the case, he did not consciously turn his mind to whether or not it was. Instead and simply enough, it was reasonable that he should have implemented what he considered that the Divisional Conference had reasonably decided.
Again with some hesitation, I am unpersuaded that the respondents have established a want of satisfaction on the applicant’s part that the payment regime to which his 23 October Letter referred was reasonable in the circumstances. Whether or not an act is reasonable is, more often than not, a function of instinct rather than conscious reasoning. In that sense, the best evidence that the applicant considered, whether rightly or otherwise, that it was reasonable for him to impose the instalment regime that his 23 October Letter sought to impose is that he imposed what he had been authorised to impose (which, in turn, he understood had been thought by those who conferred that authority to be reasonable). That, of course, is not determinative of the issue; and, had I been persuaded that the regime in question was objectively unreasonable, I might well have inclined toward a different conclusion. On balance, however, I am not satisfied that the applicant lacked the state of satisfaction upon which the Divisional Conference Resolution conditioned the exercise of the power that, by the 23 October Letter, he purported to exercise.
It follows that I do not accept that it was beyond the power that the Divisional Conference Resolution conferred upon him for the applicant to send the 23 October Letter (and, thereby, to require that the Branch make payments to the Division in line with the instalment regime to which it referred).
Conclusion
The Divisional Conference Resolution was validly made and the 23 October Letter imposed upon the Branch a requirement that the applicant was authorised to impose. The 23 October Letter obliged the Branch to comply with the demand expressed within the Divisional Conference Resolution (namely, that the BCOM “cause the amount of $190,965.91 to be paid to the funds of the Divisional Conference”) in the manner that it identified (namely by monthly instalments of $15,000.00). That was an obligation with which the BCOM was required to comply: Divisional Rules, rr 44(b) and 77(a) (above, [39], [42]).
DISCRETIONARY CONSIDERATIONS
Notwithstanding my conclusions as to the validity of the Divisional Executive Resolution, the Divisional Conference Resolution and the 23 October Letter, it does not follow that the applicant must be granted the relief that he seeks. It was common ground that the court enjoys a discretion as to whether or not it should grant relief under s 164.
The source of the court’s discretion is not apparent on the face of the provision itself but the authorities—most dealing with prior incarnations of the section in predecessor legislation—suggest that such a discretion exists. In Mellor v Horn (1988) 25 IR 157 (Gray J), this court held (at 162-163):
The existence of a residual discretion not to make an order under [a predecessor of s 164 of the FW(RO) Act, namely] s 141 [of the Conciliation and Arbitration Act 1904 (Cth)], when a proper case for such an order has been made out, was recognised by the Full Court in Cook v Crawford (1982) 1 IR 422; 62 FLR 34. It was also made clear in that case that the discretion will only be exercised against making an order in the most exceptional cases, and on considerations relevant to the objects of the Act, rather than general equitable grounds.
I turn, then, to consider the respects in which the respondents contend that the court ought, as a matter of discretion, to refrain from exercising its jurisdiction to grant relief under s 164 of the FW(RO) Act.
Futility, reasonableness and potential administration
The respondents led evidence about the Branch’s parlous financial state. It is not necessary to recite that evidence in detail. It suffices to say that the Branch does not control ready access to assets sufficient to pay what the Division has demanded and, for at least the last few years, has not operated at a surplus that would permit it to do so. Requiring that the Branch pay what cannot be paid would, it was submitted, be akin to requiring the impossible, which is obviously unreasonable and something that the court should sensibly strive to avoid.
In answer to the Branch’s financial realities, the applicant sought, through his cross-examination of the first respondent, to identify other steps that it might be open to the Branch to take in order to generate funds sufficient to meet what the Division has demanded. In particular, it was suggested that the Branch might investigate the imposition upon members of a levy pursuant to r 88 of the Divisional Rules (above, [43]) or the acquisition of some kind of loan facility.
Neither of those suggestions—the imposition of a levy or the acquisition of a loan facility—found expression in the applicant’s written submissions. Instead, the applicant said nothing on the question of discretion other than that “[t]here is no sound discretionary basis for refusing the relief sought”. That submission was made in reply to the respondents’ submissions, in which the various discretionary bases upon which they now rely were outlined.
Although there was no objection to the applicant’s cross-examination of the first respondent, counsel for the respondents contended that the applicant should not now be permitted to make positive submissions about the measures that the Branch might take to generate funds sufficient to meet the Division’s demands. The matter, he submitted, had proceeded without pleadings and, were the applicant now permitted to make the submissions that he sought to make about the potential imposition of a levy or acquisition of a loan facility, the respondents would effectively be the victims of ambush.
I confess some sympathy for that submission. Nonetheless, I reject it. It was for the respondents to establish a discretionary basis upon which the court might decline to grant relief. The applicant was entitled to test the evidence that was advanced in support of that proposition and he did so consistently with the proposition that he, himself advanced in reply to it: namely, that there was “…no sound discretionary basis for refusing the relief sought”. If there was real prejudice to the respondents in his doing so at the point and in the manner that he did, it was open to them to request some time to consider (and, if necessary, take instruction about or seek to lead further evidence in relation to) what the applicant had explored through the first respondent.
On the issue of substance, I do not accept that the parlous financial state under which the Branch presently labours (and, for some time has laboured) is sufficient to justify the refusal of relief on discretionary grounds. Plainly, it will not be easy for the Branch to meet what the Division has demanded; but the evidence does not permit a finding that it will be impossible. Further, even assuming that it would be impossible, or nearly so, it is not clear how that should translate into some discretionary basis justifying the refusal of relief that is founded upon the objects of the FW(RO) Act. To borrow from Gray J in Mellor v Horn (above, [124]), any relevant futility that the evidence is capable of establishing is insufficient to qualify this case as “exceptional” and is not sufficiently connected to “considerations relevant to the objects of the Act”.
Likewise, the potential of the Branch being placed into administration (in the sense described by r 45 of the Divisional Rules) is not a basis sufficient to justify the refusal of relief on discretionary grounds, nor is the prospect that that course might lead to members resigning en masse or might otherwise significantly compromise the Branch’s operations (and might well jeopardise the measures recently put in place to address the Branch’s financial woes). The Branch, it would appear, is already in poor financial health. Whether that is because it has been mismanaged or because of factors beyond the BCOM’s control doesn’t much matter. The respondents cannot reasonably expect that the Branch should be excused from the need to comply with financial obligations validly imposed upon it merely because doing so is difficult. As with the issue of futility, the submission that the respondents advance is not sufficient to qualify this case as exceptional and there are no bases inherent in it that are sufficiently connected to “considerations relevant to the objects of the Act” such that the refusal of relief on discretionary grounds is warranted.
The Business Case
For equivalent reasons, I do not accept that the Division’s rejection of the Branch’s Business Case document (above, [22]) amounts to a basis upon which relief might be refused on discretionary grounds.
The Business Case document did not commit the Branch to repay to the Division what the Division had paid to Ms Willoughby (although it did suggest that that would occur, including by means of the Branch foregoing a “reduction in capitation”). It did not indicate a timeframe within which the amount might be paid. It simply stated a proposal, which it sought to justify, perhaps fairly, on the basis that it was “…imperative to cease federal court action which has the potential to waste further members’ money on pointless, avoidable litigation”.
In the circumstances then prevailing, it was not incumbent upon the applicant to accept the Business Case document, nor to make any counter-suggestion as to how the Branch should comply with what the Division had demanded. Even assuming that it was, as the second respondent told the court, rejected summarily (perhaps even curtly), there is nothing about the applicant’s rejection of the Business Case document that should warrant the refusal of relief on discretionary grounds.
Expiry of deadlines
The respondents submitted that, were the court to grant relief in the form of directions requiring their compliance with the CEPU Rules (and, thereby, payment by the Branch of the sums that were the subject of the Divisional Executive Resolution, the Divisional Conference Resolution and the 23 October Letter), that relief would, in effect, require the impossible. That is so because each of the Divisional Executive Resolution, the Divisional Conference Resolution and the 23 October Letter stipulated times by which certain payments were to be made. Even if they were ordered to, the respondents could not comply with those decrees because the time for doing so has passed.
I accept that submission. The jurisdiction conferred upon the court by s 164 of the FW(RO) Act is to make orders giving directions for the performance or observance of an organisation’s rules by those who are obliged to perform or observe them. In the present case, the rules in respect of whose performance or observance the respondents are said to have been so obliged are rr 44(b) and 77(a) of the Divisional Rules (above, [39], [42]). For the reasons already outlined, those rules obliged the BCOM to pay what was demanded by the Divisional Executive Resolution and the 23 October Letter. In the case of the Divisional Executive Resolution, it was required to pay to the Division $15,913.83 on 1 November 2017, and the same amount on the first day of each month thereafter until (and including) 1 October 2018. In the case of the 23 October Letter, it was required to pay to the Division $15,000.00 on 15 November 2018, the same amount on the 15th day of each month thereafter until (and including) 15 October 2019, and then a further $10,965.91 on 15 November 2019. There are no directions that this court can give that could effect compliance with the requirements of either instrument. It would go without saying that this court should be slow to make orders requiring the impossible.
The applicant, with respect, did not have a good answer to the above submission. He submitted that (emphasis added):
[T]he substance of the resolution[s] would be something that your Honour could direct the performance of in the future. It simply is a product of the way the world works. Time passes. But your Honour shouldn’t deny relief simply because the resolution required payment from that date…
...
The rules need to be observed. They might not need to be observed strictly in accordance with the resolution[s] but the rules need to be observed.
Respectfully, s 164 of the FW(RO) Act does not authorise the court to make orders giving directions for the performance or observance of an organisation’s rules in substance or otherwise than strictly. It is, in that sense, that the question of timing might well cast a question upon the court’s jurisdiction to grant relief at all in a matter such as this one (see above, [71]). What the applicant seeks is an order that would require that the respondents effect payment of what the Division has demanded in a way or ways that differ from the manner that each of the Divisional Executive Resolution and the 23 October Letter contemplated. The difficulty with that is that there is nothing in the CEPU Rules that requires them to make those payments in those manners. What the applicant seeks is not compliance with the CEPU Rules but, rather, substantial compliance with the Division’s demands. He wants, understandably enough, for the Division to be placed in the position in which it would have been had the BCOM not contravened the CEPU Rules when it failed to comply with the demands stated in the Divisional Executive Resolution and/or the 23 October Letter. Section 164 of the FW(RO) Act does not enable the granting of relief of that nature.
It follows that I would, for those reasons, decline on discretionary grounds (if not for want of a power under s 164 of the FW(RO) Act) to grant the relief that the applicant seeks.
CONCLUSION
The application must (and will) be dismissed. Presumably conscious of the effect of s 329(1) of the FW(RO) Act, the respondents have not sought an order for costs and none shall be made.
It does not seem far-fetched to imagine a future in which the Division (or perhaps the applicant) makes further demands of the Branch for payment of what was paid to Ms Willoughby. Those demands might well be drafted in such a way as avoids the limitations by reason of which relief has here been denied. Although it would, of course, depend upon the circumstances—which, of course, might not marry precisely with those that presently confront the court—it might well be that any subsequent non-compliance with any such demands would more readily lend itself to a remedy under ss 164 or 164A of the FW(RO) Act. One hopes that it doesn’t come to that.
I certify that the preceding one hundred and forty-two (142) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Snaden. Associate:
Dated: 6 May 2020
SCHEDULE OF PARTIES
VID 152 of 2018 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:
DAVID FRANCEY
Eleventh Respondent:
SCOTT THOMSON
Twelfth Respondent:
DAVID SMITHWICK
Thirteenth Respondent:
MAUREEN PARKER
Fourteenth Respondent:
ROGER BLAND
Fifteenth Respondent:
DAVID KETCHION
Sixteenth Respondent:
ANDREW YOUNG