Roots, David Christopher v Mutton, S.

[1978] FCA 15

ROOTS v. MUTTON (1978) 32 FLR 15
Conciliation and Arbitration

COURT

FEDERAL COURT OF AUSTRALIA

J.B. Sweeney(1), Evatt(1) and Deane(1) JJ.

CATCHWORDS

Conciliation and Arbitration - Registered organizations - Rules - Directions for performance or observance of rules - Suspension from office - Purported amendment of rules empowering committee to suspend officer - Whether general power of amendment of rules - Nature of rules - Construction of rules - Express and implied powers - Conditions attaching to exercise of power - Whether mandatory or directory - Failure to comply with conditions - Validity of amendment - Conciliation and Arbitration Act 1904-1976, s. 141.

HEADNOTE

Section 141 of the Conciliation and Arbitration Act 1904-1976 provides by sub-s. (1) that the court may, upon complaint by a member of an organization and after giving any person against whom an order is sought an opportunity of being heard, make an order giving directions for the performance or observance of any of the rules of an organization by any person who is under an obligation to perform or observe those rules.

The rules of an organization provided by r.28 for the amendment of the rules as follows: "(1) The rules of the union shall not be amended except on a resolution carried by a majority of the council. (2) Any member desiring to submit to the council any proposal to amend the rules must first submit such proposal to the meeting of his branch specially convened for the purpose. (3) if such proposal be approved by a majority of the members present at such meeting it shall be forwarded to the head office for submission to the council. (4) The general secretary shall prepare an agenda of any such proposals and forward copies of same to all branches, not less than six (6) weeks prior to the council meetings to which such proposals are submitted. (5) The council may at any time make or amend any rules, so that the rules of the union may comply with the requirements of the Commonwealth Conciliation and Arbitration Act, or any similar State Act."

In November 1975, r. 36 (12) was inserted into the rules by resolution only of the federal council of the organization. That sub-rule purported to empower the federal executive, amongst other things, to suspend from office a member who had behaved in any insulting or offensive manner at any meeting of the organization or branch.

In October 1977 charges were laid against an organizer of the Queensland branch of the organization who had been elected for a three-year term ending on 31st May, 1978. The federal executive, after finding the charges proved, suspended the organizer from office from 1st November, 1977, to 31st May, 1978. The organizer sought orders as to the invalidity of r. 36 (12) and his purported suspension under that rule.

Held: (1) As rules were, in their nature, a compact between the members, a power to amend the rules must, in the absence of legislative authority, be found in the rules themselves.

(2) Where such a power is contained in the rules, a purported exercise of it which disregards mandatory conditions attached by the rules to its exercise is ineffective.

Scurr v. Brisbane City Council (1973), 133 CLR 242, applied.

(3) On a proper construction, r. 28 conferred upon the federal council an implied general power to amend the rules in accordance with the procedural requirements prescribed by that rule.

(4) The procedural requirements in r. 28 were to be construed as mandatory rather than directory: a fundamental factor indicating their mandatory nature was the intention of r. 28 that amendment should have a basis in the membership itself (by way of a member's proposal of amendment with membership consideration of it. Other indications were the imperative nature of the language in the rule and the fact that the provisions of r. 28 which prescribed the procedure for the exercise of the power formed the basis from which the existence of the power was implied. Accordingly, as there had been no compliance with the procedural requirements of r. 28, r. 36 (12) had not been validly adopted and the purported suspension under it was void.

HEARING

Sydney, 1978, March 20, 21, 23. #DATE 23:3:1978

ORDER NISI.

A member of an organization registered under the Conciliation and Arbitration Act 1904-1976 sought orders under s. 141 of the Act directing the respondent members of the federal council of the organization and members of the committee of management of the Queensland branch of the organization to perform and observe the rules of the organization by treating as null and void r. 36 (12) of the rules of the organization and the purported suspension of the applicant under that rule.

F. S. McAlary Q.C. and M. Cockburn, for the claimant.

E. A. Laurie Q.C. and R. Kenzie, for certain named respondents.

Cur. adv. vult.

Solicitors for the claimants: White, Barnes and McGuire.

Solicitors for certain named respondents: Ryan Carlisle, Needham & Thomas.

JUDGE1

March 23.

THE COURT delivered the following judgment.

This is the return of an order nisi made by Evatt J. on 16th December, 1977, pursuant to s. 141 of the Conciliation and Arbitration Act 1904-1976 ("the Act"). (at p16)

1. The applicant, David Christopher Roots, is a member of the Australian Plumbers and Gasfitters Employees' Union ("the union") which is an organization of employees registered under the provisions of the Act. In May 1975, the applicant was elected as an organizer of the Queensland branch of the union for a term of three years terminating on 31st May, 1978. In October 1977, charges were laid against him before the federal executive of the union. These charges were heard by the federal executive on 31st October, 1977, and the following day. On 1st November, 1977, the federal executive, having heard the matter, carried a resolution in the following terms: "The federal executive, after hearing all the evidence, find the charges proven, and suspends D. Roots from holding office in the union from 1st November, 1977, to 31st May, 1978". (at p17)

2. It is common ground between the parties that the federal executive purported to deal with the applicant and to impose the period of suspension which it imposed pursuant to r. 36 (12) of the certified rules of the union. So far as is relevant, that rule is in the following terms: "12. The council executive shall, subject to the confirmation or otherwise of its actions by the next ensuing meeting of the council, have the following powers: (a) to suspend from office, or impose a fine not exceeding $50 on any member of the union if it is satisfied that such member - . . . (iv) has behaved in an insulting or offensive manner at any meeting of the union or of a branch; . . ." (at p17)

3. The applicant seeks orders that such of the respondents as are at present members of the federal council of the union or members of the committee of management of the Queensland branch of the union perform and observe the rules of the union by treating as null and void both r. 36 (12) and the purported suspension of the applicant in pursuance of the provisions of that rule. The grounds upon which the applicant relies are: (i) that the procedural steps leading to the purported insertion in the rules of the provisions of r. 36 (12) were ineffective with the result that r. 36 (12) was never validly introduced into the rules; (ii) that even if the procedural steps necessary to amend the rules by inserting the provisions of r. 36 (12) had been effectively taken, the provisions of r. 36 (12) are null and void as being contrary to the provisions of both s. 133 (1) (f) and s. 140 (1) (c) of the Act; and (iii) that, even if the provisions of r. 36 (12) are not invalid, the purported suspension of the applicant from holding office in the union for the specified period was beyond the powers conferred upon the federal council by those provisions. (at p17)

4. The provisions of r. 36 (12) were purportedly introduced into the rules by a resolution passed at a meeting of the federal council of the union held in November 1975. At the commencement of that meeting, the only reference to amendment of the rules which appeared in the rules of the union were the provisions appearing in what is now r. 28. Those provisions are as follows: "AMENDMENT TO RULES. (1) The rules of the union shall not be amended except on a resolution carried by a majority of the council. (2) Any member desiring to submit to the council any proposal to amend the rules must first submit such proposal to the meeting of his branch specially convened for the purpose. (3) If such proposal be approved by a majority of the members present at such meeting it shall be forwarded to the head office for submission to the council. (4) The general secretary shall prepare an agenda of any such proposals and forward copies of same to all branches, not less than six (6) weeks prior to the council meetings to which such proposals are submitted. (5) The council may at any time make or amend any rules, so that the rules of the union may comply with the requirements of the Commonwealth Conciliation and Arbitration Act, or any similar State Act". (at p18)

5. The rules of the union comprise the compact between its members. In the absence of legislative provision to the contrary, there is no inherent power in the union to alter or amend its rules except possibly where the alteration or amendment is made with the agreement of all its members. Any power to alter them must, in the absence of legislative authority (and there is none), be found in the rules themselves. Where the power exists in the rules it must be fairly construed. Any purported exercise of it which goes beyond the ambit of the power when so construed or which disregards mandatory conditions which the rules prescribe for the exercise of the power will be ineffective. If the power of amendment is given by directory provisions (as distinct from mandatory conditions) relating to the manner of its exercise, failure to comply substantially with those provisions will ordinarily invalidate a purported exercise of it: Scurr v. Brisbane City Council (1973) 133 CLR 242, at pp255-256 . (at p18)

6. The first thing to be noted about the provisions of r. 28 is that they do not, in express terms, confer upon the federal council any general power to amend the rules. The provisions of sub-cl. (1) of r. 28 are, in terms, prohibitory: the rules shall not be amended except on a resolution carried by a majority of the council. The following three sub-clauses of r. 28 prescribe a procedure designed to lead up to the consideration by the council of a proposed amendment to the rules. Sub-clause (5) of r. 28 dispenses with the need to comply with that prescribed procedure and confers an express power to amend when, and only when, the proposed amendment to the rules is in order to attain compliance with legislative requirements. (at p18)

7. Unless there is to be found, in the provisions of r. 28, an implied power in the federal council to amend the rules, the applicant is plainly entitled to succeed in these proceedings. In the absence of such an implied power to amend, neither the addition of the provisions to be found in r. 22 (6) (d) to which reference will subsequently be made nor the provisions of r. 36 (12) in pursuance of which the resolution suspending the applicant was purportedly passed were ever effectively added to the rules of the union. We have, however, reached the conclusion that the provisions of r. 28 clearly confer upon the federal council an implied general power to amend the rules in the manner and in accordance with the procedural steps which the rule, by negative and positive stipulations, prescribes. (at p18)

8. The fact that the power to amend the rules contained in r. 28 is implied rather than express is, in itself, a strong indication that the provisions of the rule which not only prescribe the procedure for the exercise of the power but form the very basis from which the existence of the power is implied are mandatory rather than directory. The language in which that procedure is couched serves, in any event, to make that clear. The verb "shall", in sub-cll. (1), (3) and (4) and the verb "must" in sub-cl. (2) are clearly more appropriate to mandatory conditions than to directory provisions. The dispensation, in sub-cl. (5), of the need to comply with the procedural requirements in the limited class of amendment with which sub-cl. (5) is concerned underlines the mandatory nature of those requirements in the ordinary case. (at p19)

9. Quite apart from the above considerations, there is a more fundamental reason for construing the procedural requirements contained in sub-cll. (2), (3) and (4) of r. 28 as mandatory rather than directory. Underlying these provisions is the obvious philosophy that, apart from the case where amendment is necessary to comply with legislative requirements, amendments to the rules of the union should have a basis in the membership itself. The initial promoter of an amendment to the rules is seen as acting in his capacity as a member of the union rather than as an officer or as a member of the federal council or of the committee of a branch of the union. The proposed amendment must, if it is to be submitted to the federal council, be approved by a majority of the members of the branch to which the relevant member belongs at a meeting specially convened for the purpose of considering it. It cannot be dealt with by the federal council unless notice that it is proposed to consider it has been forwarded to all branches of the union not less than six weeks prior to the relevant meeting of the federal council. The requirement of notice to all branches is clearly designed to ensure that, except where the proposed amendment is to meet legislative requirements, no amendment will be made to the rules of the union without the members of the union being, at branch level, given the opportunity of considering the proposed amendment and making their views known in relation to it. Since branches meet monthly, six weeks' notice is designed to ensure that each branch will meet after it gets notice of the proposed amendment and before the council meets. (at p19)

10. As has been said, the provisions of r. 36 (12) were purportedly added to the rules of the union by resolution passed at a meeting of the federal council held in November 1975. It could not be suggested that their addition to the rules was necessary to secure compliance of the rules with any legislative requirement. Compliance with the procedural requirements prescribed by r. 28 was therefore necessary if the amendment was to be validly made in pursuance of that rule. In fact, there was no such compliance. The amendment originated with the Queensland branch. No relevant special meeting of members of the Queensland branch was ever called for the purpose of considering the amendment. It was not, in fact, either considered or approved at any relevant meeting of the members of that branch. It was forwarded to the general secretary of the union with no warrant other than a resolution of the committee of management of the branch to back it. (at p20)

11. It was submitted on behalf of the respondents who appeared to defend the proceedings that the federal council's power to make the relevant amendments was to be found in the provisions of r. 22 (6) (d) rather than in the provisions of r. 28. Rule 22 (6) (d) was inserted in the rules of the union at the November 1975 meeting of the federal council at a point prior to the passage of the resolution purportedly inserting the provisions of r. 36 (12). It provides: "(6) The function of the council shall be to administer the rules of the union for the general welfare of the members, to endeavour to carry out the objects of the union and to consider and transact all business submitted by the branches where necessary to maintain the proper functioning of the union and shall provide for: . . . (d) to repeal, alter or add to the rules of the union; . . . " It was also submitted, on behalf of those respondents, that, in order to give sense to the sub-clause, the words "shall provide for" should be read as meaning "shall include power". (at p20)

12. In the view we take of them, the provisions of r. 22 (6) (d) do not, in the context of r. 28, add any power to the powers already possessed by the federal council. They simply make explicit, in detailing the functions of the federal council, the power to repeal, alter or add to the rules which was already implicit in the provisions of r. 28. In any event, even if r. 22 (6) (d) were properly seen as an independent grant of power to amend, alter or add to the rules, the mandatory procedure contained in r. 28 would, in the view we take, be applicable to the exercise of that power. Our conclusion in this regard is fortified by consideration of other provisions contained in r. 22 (6). Thus, for example, it is inconceivable that the inclusion, among the functions of the federal council, of the power to appoint the members of the executive should be seen as independent of the specific powers contained in r. 31 and as warranting a disregard of the procedures laid down by r. 31 as applicable to such appointments. In any event, it would seem unlikely that r. 22 (6) (d) would have been operative at the relevant time since it would not have been certified by the registrar (see s. 139 (4) of the Act). (at p20)

13. It follows that the failure to comply with the mandatory procedural requirements specified in r. 28 had the consequence that the amended rule under which the suspension was imposed on the applicant was not validly adopted by the federal council. Even if the procedural steps set out in r. 28 were directory rather than mandatory, we would remain of the view that the provisions of r. 36 (12) were never validly adopted for the reason that we consider that the failure to comply with the procedure set out in r. 28 was of such significance as to prevent there having been any substantial compliance with that procedure (see Scurr v. Brisbane City Council (1973) 133 CLR 242 ). (at p21)

14. This position is not affected by the fact that the rule, in its amended form, was certified by the industrial registrar and remains part of the "certified rules". In proceedings such as these, it is open to an applicant to attack the validity of a rule on grounds which go to its original adoption notwithstanding subsequent registration of that rule (Krantz v. Maynes (1967) 10 FLR 134 ). Indeed, it was common ground between the parties that the purported suspension of the applicant could not be justified in the event that we reached the conclusion that the provisions of the so-called r. 36 (12) had never validly been adopted. (at p21)

15. In the result, the applicant has never been validly suspended from the office of organizer to which he was elected. He is entitled to orders: (1) that those respondents who appeared treat as null and void the purported resolution of the council executive of the organization purporting to suspend him from holding office in the union from 1st November, 1977, to 31st May, 1978; (2) that the said respondents and each of them perform and observe the rules of the organization by recognizing the applicant as an elected organizer of the Queensland branch of the organization for the balance of the term for which he was elected. (at p21)

16. Having reached the conclusion we have, we find it unnecessary to consider the other matters raised. We feel we should however point out that the rules appear to be in a somewhat unsatisfactory state and will inevitably present further difficulties of interpretation both to members and officers and, in the event of dispute, to the court. It is clearly desirable that steps be taken, as soon as practicable, to remove such difficulties. (at p21)

17. It is noted that, even though the union did not seek to make submissions as to the validity of r. 36 (12), we were assured that the order nisi had in fact been served upon it. It should also be noted that our decision in favour of the applicant does not involve any finding that the applicant was not guilty of the conduct charged against him or that the facts were not such as to warrant the taking of disciplinary action against him. These matters have simply not been involved in the questions which have arisen for decision in these proceedings. (at p21)

ORDER

Orders accordingly.