Ron Porter v Transport Workers Union of Australia

[1992] FCA 236

236 9'2

JUDGMENT No. ....., .... , .... J . , . ,

C A T C H W O R D S

Industrial - Industrial agreement registered with the State Industrial Conciliation and Arbitration Commission - Dispute - Compromise deed of settlement registered - Effect of registration with State Commission - Changeover of Branch Committee of Management - Federal rules of Union - Power of committee - bona fide exercise of power for proper purpose - conflict of duty and interest.

Industrial Relations Act 1988 (C'th) S. 196, S. 208, S. 209.
Industrial Conciliation and Arbitration Act 1961 (Qld) S. 40.

Industrial Relations Act 1990 (Qld) S. 12.4.

Cooper J.. Brisbane. 16 April. 1992

XALIA. ALLAN DAVID MCPAUL,

!. R. BOYCE. D. BALL. M. FURNER. FRANK

ISBY. JOHN BARTLETT and BRIM SORENSON

LIMITED DISTRIBUTION

C A T C H W O R D S

Industrial - Industrial agreement registered with the State Industrial Conciliation and Arbitration Commission - Dispute - Compromise deed of settlement registered - Effect of registration with State Commission - Changeover of Branch Committee of Management - Federal rules of Union - Power of committee - bona fide exercise of power for proper purpose - conflict of duty and interest.

Industrial Relations Act 1988 (C'th) S. 196, S. 208, S. 209.

Industrial Conciliation and Arbitration Act 1961 (Qld) S. 40.

~ndustrial Relations Act 1990 (Qld) S. 12.4.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY

INDUSTRIAL DIVISION

No. 012 of 1992

BETWEEN:  RON PORTER, PAUL HOOPER, KEN DAHLEN, PETER CHAPMAN, HUGHIE JOHN WILLIAMS, JOHN DUKE, PETER BIAGINI, BILL MORRISON and HANK VAN OS

Applicants

TRANSPORT WORKERS UNION OF AUSTRALIA

First Respondent

ALLAN DAVID McPAUL, L. WARD. CECIL BALDERSON, R. BOYCE, D. BALL, M. FURNER, FRANK GARRETT, D. HAGGETT . D. THOMAS. BRENTON KECHELL, J. HINSPETER. M. WALKER, C. ROHWEDER and G. NEWTON

Second Resuondents

ALLAN DAVID MCPAUL, HENRY ASPLIN, GREG NEWTON. LEN WARD, DICK ROBSON. PETER BIAGINI, PAT HORGAN . DON BARDEN, FRANK GARRETT, JOHN

HINSEPTER, CECIL BALDERSON. STUARTCROSBY, JOHN

BARTLETT and BRIAN SORENSON

Third Respondents

MINUTES OF ORDER

JUDGE MAKING ORDER:	Cooper J
DATE OF ORDER:	16 April, 1992
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

1.        The application for interim orders and interlocutory relief, in the terms sought, is refused.

1. Adjourn the application to the Registrar to fix a date for directions as to further conduct of the proceedings.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY

INDUSTRIAL DIVISION

No. 012 of 1992

BETWEEN:  RON PORTER, PAUL HOOPER, KEN DAHLEN. PETER
CHAPMAN, HUGHIE JOHN WILLIAMS. JOHN DUKE. PETER
BIAGINI, BILL MORRISON and HANK VAN OS

Applicants

.- AND: TRANSPORT WORKERS UNION OF AUSTRALIA

First Res~ondent

m:  ALLAN DAVID McPAUL, L. WARD, CECIL BALDERSON,
R. BOYCE, D. BALL, M. FURNER, FRANK GARRETT. D.
HAGGETT. D. THOMAS, BRENTON KECHELL, J.
HINSPETER, M. WALKER, C. ROHWEDER and G. NEWTON

Second Respondents

ALLAN DAVID McPAUL, HENRY ASPLIN. GREG NEWTON.
LEN WARD, DICK ROBSON, PETER BIAGINI, PAT
HORGAN, DON BARDEN, FRANK GARRETT. JOHN
HINSEPTER, CECIL BALDERSON, STUART CROSBY, JOHN

BARTLETT and BRIAN SORENSON

Third Respondents

CORAM:	Cooper J
PLACE :	Brisbane
DATE :	16 April, 1992

EX TEMPORE REASONS FOR JUDGMENT

This is an application by certain members of the incoming branch committee of management of the first respondent for interim relief under sections 208 and 209 of the Industrial Relations Act 1988, and in the pendant jurisdiction of this court. As the relief concerns monies recently paid to officials of the Union in their capacity as employees, an urgent decision is sought as to the disposition of those funds. Accordingly, I do not propose to canvass in detail all of the evidence or all of the submissions made.

The following are the essential facts. In 1982, an industrial agreement was registered in the State Industrial Conciliation andubitration Commission dealingwith entitlements of certain employees of the first respondent. By virtue of section 40 of the Industrial Conciliation and Arbitration Act 1961 (Queensland) as amended, that agreement had the same effect as an award made by the state commission between the parties and was enforceable as such. There is some dispute as to whether a "wage freeze" was imposed by the Union shortly before or after that agreement was made. It is tolerably clear, however, that employees were never paid in accordance with the agreement.

On 17 March 1992, solicitors on behalf of a number of officials of the Union made a demand on their behalf for payment of arrears of salary and allowances in accordance with the provisions of the 1982 agreement. On 19 March 1992, the Union received advice from its solicitors and counsel that it was liable to make the payments claimed. On 20 March 1992, the matter was referred to the State Industrial Relations Commission

payment and the state commission found that such a dispute	on the basis that there was a dispute as to the entitlement to
existed. The Union negotiated with the claimants in the state commission and a compromise of the claim was reached and reduced to a deed of settlement. The compromise provided for payment of various money sums to the various claimants together with providing an indemnity as to any income tax to which a claimant may be assessed in consequence of the payment. For their part, each claimant relinquished his or her claim to pursue payment in accordance with the 1982 agreement.
On 13 April 1992, the branch committee of management authorised the president to execute the deeds on behalf of the Union and this was done. On 13 April 1992, the state commission approved the terms of the compromise and the deeds were registered pursuant to section 12.4 of the Industrial Relations 'Act - 1990 (Qld. ) . Each agreement thereafter had the force and
effect of a state award and was enforceable by the parties to it as such. Conformably with the deeds, the sums agxeed to be paid have been paid over to the second respondents by the first respondent.
The new branch committee of management was declared as elected on 4 March 1992 and is to take office on 20 April 1992.
The applicants contend that:
(a) Compromising of the claims in the manner which occurred was in breach of rule 59 (g) of the federal rules of the Union.
(b) Compromising of the claims was beyond the power of the present branch committee of management, and, that if such power existed, then it was not exercised bone

fide and for the purpose of the Union and for the purposes given by the rules. The improper purpose, it was alleged, was inferentially to pay claims which the outgoing committee knew or suspected would not have been paid by the new committee.

(C) If there was a power to do the acts in the manner which has occurred, then such power to the extent that it was not proscribed by the rules in respect of the period between the declaration of the ballot and the installation of the new branch committee of management contravened section 196 of the Industrial Relations Act 1988 which provides: -

"The r u l e s o f an o r g a n i s a t i o n :

( C ) sha l l not impose on a p p l i c a n t s for

membersh ip	or members o f the o r g a n i s a t i o n
c o n d i t i o n s ,	o b l i g a t i o n s or restrictions t h a t

h a v i n g r e g a r d t o the o b j e c t s o f t h i s A c t and

the purpose o f the r e g i s t r a t i o n o f

o r g a n i s a t i o n s under t h i s A c t , a r e

o p p r e s s i v e , unreasonab le or u n j u s t " .

(d)	Those members of the branch committee of management who were recipients of payments, although they did not vote on any question of their personal entitlement, nonetheless, placed themselves in a position of conflict of duty and interest and acted in breach of their fiduciary duty by voting to make payments to other members and by not leaving the room when their own interests were under consideration.
In my view rule 59 of the federal rules of the first respondent empowers each branch committee of management to fix
salaries and allowances (see rule 59(b)).	The rule places

restrictions on outside employment (rule 59(c)). Sub-rule (d) gives an entitlement to annual leave on certain terms and sub- rule (e) provides for entitlement to long-service leave. Sub- rule (£) provides for a special account to be opened to receive funds to cover long-service and annual leave entitlements. Sub- rule (g) provides as follows:

"Shou ld a n y d i s p u t e a r i s e under th i s r u l e , the m a t t e r

s h a l l be d e t e r m i n e d by the f e d e r a l c o u n c i l whose

d e c i s i o n s h a l l be f i n a l and c o n c l u s i v e " .

The matters contained in rule 59 as a matter of construction contain so far as is relevant matters going to the fixation of wages andminimum annual and long leave entitlements. A dispute under the rules is one limited to the subject matter of the rule. The dispute in the instant case, on the material before me, did not fall into the category of negotiation as to the fixation of salary entitlement or entitlement to annual or long leave as provided for by the rule. The dispute was as to the payment of entitlements under a registered industrial agreement.

I am not persuaded that there is an arguable case that the relevant dispute was one which was by rule 59(g) obliged to be referred to the federal council. There is in consequence no arguable breach of this rule in the events which have occurred.

There has been no serious suggestion that if the 1982
agreement was to be given effect to, the claims made by the

officials were not sustainable to some degree. There is nothing

could take away the rights of the claimants to enforce the 1982	to suggest that a voluntary wage freeze imposed by the Union
agreement if they saw fit. The evidence would suggest that until recent times, the existence of this agreement was not widely known to the officials or membership of the Union. The question is not whether or not the compromise was a good one and whether or not the incoming branch committee of management could have done better. It is a question of whether the power to do what the branch committee of management did exists and if it dld whether or not the power was exercised bone fide for the purpose for which it was given.
I am not persuaded that a general power of management carrying with it the power to compromise a valid and enforceable demand for payment under a registered industrial agreement can be characterised as oppressive, unreasonable or unjust because the occasion upon which it falls to be exercised falls between the declaration of a poll and the assumption of office of new members of the branch committee of management. In the instant case, the exercise of the power was with the advice of solicitors and counsel and the approval of the state commission. There is no suggestion that what occurred was a sham or a fraud.
It was submitted that the incoming branch committee of management would not have paid the sums claimed and that the present branch committee of management acted with indecent haste in the matter because it was aware of this fact. However, if the claims were valid and enforceable, the Union was obliged to pay or compromise them, and to leave the matter to the incoming
the interests of the Union. The question of payment still branch committee of management - would not advance the matter in
remained.
It was submitted that the branch committee of management ought to have used powers under the rules to refer the question of entitlement to a referendum of members, or to the federal executive, in an attempt to resolve the matter internally, having regard to the large amount involved, and the serious effect that payment would have on the Union finances. It was further submitted that directions can ultimately be given by this court that such a course be undertaken. In this regard, it should be noted that the monies have been paid to the claimants, under a registered industrial agreement. The agreement has been fully performed by the Union. No resolution of members can of itself take away the legal entitlements of the claimants under a registered industrial agreement. It is within the power of the applicants, upon assuming office, to pass the necessary resolutions, themselves, if they deem it appropriate, without the intervention of the court, and this will occur no later than 20 April 1992.
It was submitted that what has occurred was not in accordance with the spirit of the Industrial Relations Act and the rules of the Union to resolve matters of this type by conciliation and agreement within the structure of the organisation itself, and, with disclosure of the existence of such a dispute or controversy to the wider membership. This may well be so. However, I am not persuaded that anything which
of the Act or the rules, or that there ought to be implied into occurred was unlawful in the sense of contraveningthe provisions
the federal rules, rules and restrictions which would prohibit what has occurred.
There remains the question of whether there has been any conflict of duty and interest, or breach of fiduciary duty. If there has been, then it does not, in my view, fall to be addressed under sections 208 and sections 209 of the Act. It may be dealt with in the pendant jurisdiction of this court. However, this requires that relief in that jurisdiction be linked to a common transaction or substratum of fact, giving rise to a claim, clearly falling within the original jurisdiction of the court. In this case, the jurisdiction under sections 208 and 209 of the Industrial Relations Act. As I have indicated, I am not 'persuaded that the applicants have an arguable or colourable claim to such relief in the circumstances which have occurred. In the events which have occurred, having regard to the independent legal advice taken and the part played by the state commission, I am not persuaded that there is an arguable case that the third respondents acted in breach of their fiduciary duty to the Union or the membership. The applicants are, therefore, left to pursue such remedies as they may have, before such courts or tribunals as they may be advised, or within the internal structures of the Union.
It follows that I am not persuaded that an arguable case has been made out on any ground. Nonetheless, I should state that if I were so satisfied, then the monies having been
paid, and the Union having performed fully its obligations under the agreement, the relief sought seeking injunctions restraining
payment out by the Union, would be of no effect, and the court would not, in the circumstances, make such orders. In the end result the applicants did not seek such interlocutory orders against the first and third respondents when it became known that the money had in fact been paid out. So far as the recipient respondents are concerned, there is no evidence to suggest that there is a real risk that any of them, having been given notice of these proceedings, would, in the event that a judgment was

granted against them, not be in a position to satisfy that

judgment from funds held by those recipients.

In the circumstances, the application for interim

orders and interlocutory relief, in the terms sought, is refused.

I adjourn the application to the registrar to fix a date for

directions as to further conduct of the proceedings.

I certify that this and the eight (8)

preceding pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Cooper.

Date:  16 April, 1992

j-ceo f l.b&-w

Associate

Counsel for Applicant:	Mark Plunkett
Solicitors for Applicant:	Callaghan & Reidy
Counsel for First Respondent:	I. Hanger Q.C. and D. Hall
Solicitors for First Respondent:	Peter Channel1 and Associates
Counsel for Second Respondent:	Glenn Martin
Solicitors for Second Respondent:	W.H. Tutt & Quinlan