Sherrif v Townsend

Re: GARRY EARNEST SHERRIF & OTHERS
And: LEONARD CECIL TOWNSEND & OTHERS (1980) 48 FLR 20
V. Nos. 12 & 17 of 1979
N.S.W. Nos. 26 & 31 of 1979
Industrial Law - Conciliation and Arbitration

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA & NEW SOUTH WALES DISTRICT REGISTRY
INDUSTRIAL DIVISION
Smithers(1), Evatt(2) and Northrop(3) JJ.

CATCHWORDS

Industrial law - whether rules contravene section 140 of the Conciliation and Arbitration Act - failure of rules to provide for branch status - disproportionate representation on Federal Council - control of committees - failure of rules to provide for separate election for each office - exclusion of officers from election to offices - validity of elections and resolutions where rules invalid - validation of invalid proceeding pursuant to s.171C of the Act - Scheme for the constituting of Federal Council - approval of scheme by the Court - principles applicable - collective body.

Conciliation and Arbitration - Registered organization - Rules - Failure to make provision required by Conciliation and Arbitration Act - Oppressive, unreasonable or unjust - Failure to provide branch status for sub-branch - Representation of branches on federal council - Right of member to stand for offices of secretary and delegate - Failure of rules to provide separate election for each office - Election of office bearers - Collegiate electoral system - Federal council as college - Autonomy of branches - Participation of branches in State industrial systems - Requirement that rules provide for control of committees by members - Committees, federal council ceasing to exist or function effectively - Reconstitution of federal council - Conflicting schemes submitted - Power of court to approve different scheme - Action to be taken by collective body - Federal council appropriate body to take action - Conciliation and Arbitration Act 1904 (Cth), ss. 4, 118C, 132 (2), 133 (1) (a), (b), (c), (d), (db), 133A, 133AA, 136A, 140 (1) (a), (c), (d) (5C), (5D), (7), 141 (8A), 171D, 171D (2) - Conciliation and Arbitration Regulations 1956, reg. 115 (1) (c), (d), (2).

Conciliation and Arbitration - Registered organization - Performance and observance of rules - Acts and decisions made by invalidly constituted federal council - Validation of acts and decisions - Conciliation and Arbitration Act 1904 (Cth), ss. 141, 171C, 171C (2).

HEADNOTE

Four proceedings under the Conciliation and Arbitration Act 1904 ("the Act") were heard together. They each related to the Vehicle Builders Employees' Federation of Australia ("the federation") a registered organization.

V. 12 of 1979

By rule nisi the claimants, members of the Geelong sub-branch committee of management, sought orders: (i) that various rules of the federation contravened s. 140 (1) of the Act; (ii) under s. 141 of the Act that the respondents being various members of the federal council perform and observe the rules of the federation by treating as null and void the election of certain officers and the purported alteration of certain rules.

Held: (1) Per curiam - The orders sought that r. 39 contravened s. 140 (1) (a) of the Act in failing to provide that there be a branch of the federation in respect of the City of Geelong and its environs should be refused: (a) the remedy of the problems that existed between the Victorian branch and the Geelong sub-branch lay in the enforcement of the rules or their alteration and (b) for the court to create a new branch would be to redesign the federation, an action inappropriate to be undertaken under s. 140 (1). Allen v. Townsend (1977), 31 FLR 431, referred to.

Per Evatt J. - The rules may contain an implied power to disband a sub-branch.

(2) (a) Per curiam - Rules 1 (b) and 4 (c) of the federation contravened s. 140 (1) (c) of the Act because in providing for equal representation on federal council of branches possessing very unequal membership they did not come within the spectrum within which the weight of representation or voting power at meetings of the federal council might validly range. McLeish v. Kane (1978), 36 FLR 80, applied. (b) Per Evatt and Northrop JJ. - The whole of r. 1 contravened s. 140 (1) (c) in that respect and as a result the rules failed to make a provision required by the Act and the Conciliation and Arbitration Regulations ("the regulations") - the election of a committee of management of the federation. This part of the proceedings should be adjourned under s. 140 (6) of the Act to enable the alteration of the rules.

(3) Per Evatt and Northrop JJ., Smithers J. dissenting - The orders sought, that rr. 1 (b) (i) and 4 (a) contravened s. 140 (1) of the Act in precluding a branch secretary being elected a branch delegate to federal council, should be refused because under those rules a member could be a candidate for both offices and only if elected to both would he be required to elect which he wished to hold.

(4) Per Smithers and Evatt JJ., Northrop J. dissenting - Rule 1 (b) (ii) contravened s. 140 (1) (a) of the Act in providing that each branch secretary shall be a member of federal council. In this respect the rule did not comply with s. 132 (2) of the Act and reg. 115 (1) (d) as it did not provide a separate election for each office in the organization. Although an order had not been sought, for similar reasons r. 1 (b) (iii) and (iv) contravened s. 140 (1) (a).

(5) Per curiam - Rules 5 (b) and 9 (d) which provided for the election of the holders of the offices of president, vice-president and two trustees by a collegiate electoral system under s. 133 (a) (ii) of the Act in which the college, the federal council, contained persons who had not been elected as members were valid because: Per Smithers J. - (a) Notwithstanding the invalidity of r. 1 (b) all the persons who comprised the federal council may have been elected to "one of a number of offices" within the meaning of "collegiate system" as defined in s. 4 and thus have been qualified to perform the functions of the second stage of the electoral system; (b) the rules, on their proper construction, awaited a validly constituted federal council upon the existence of which they might function effectively.

Per Evatt and Northrop JJ. - The federal council constituted a one-tier collegiate electoral system which complied with s. 133 of the Act.

(6) Per Evatt and Northrop JJ., Smithers J. dissenting - Rule 48 (c) did not contravene s. 140 (1) (d) of the Act because although it required the approval of the federal executive committee for the submission by a branch committee of management of a local question or dispute to a State industrial tribunal - (a) s. 140 (1) (d) did not apply to branches which did not come within s. 136A of the Act, and (b) the rule did not apply to a State registered body but only with respect to a branch of the federation in circumstances where in law the federation was the party affected by the question or dispute.

(7) Per Evatt and Northrop JJ. - The orders sought that the rules contravened s. 140 (1) (c) of the Act, in that they failed to make provision for the control of committees of the federation by its members, should be refused as the rules made the required provision and when altered in accordance with the order would further do so.

(8) Per curiam - Because of the invalidity in the constitution of the federal council at relevant times the orders sought under s. 141 of the Act should be made. N.S.W. 31 of 1979

The New South Wales branch secretary and the federal council delegates of that branch sought orders under s. 141 of the Act that the respondents being other members of federal council treat as null and void resolutions passed at a meeting of that council in August 1979. The federal secretary of the federation sought the validation of acts done at that and a later federal council meeting under s. 171C (2) of the Act.

Held: Per curiam - (1) The orders sought under s. 141 of the Act should be made for similar reasons to those given in deciding the like application in matter V. 12 of 1979.

(2) The application under s. 171C should be dismissed because: (a) it was not clear that the acts concerned would not do substantial injustice to the organization or its members; (b) the amendments were made by a federal council aware of the challenge to its composition and in the absence of representatives and interested parties - the sub-branches and of the New South Wales branch representatives.

V. 12 of 1979 and N.S.W. 26 of 1979

The applicants in N.S.W. 26 of 1979 being officers of the New South Wales branch sought orders under s. 171D of the Act that the federal council, federal executive committee and Victorian branch had ceased to function effectively and that various offices were vacant and could not be filled under the rules and an order under s. 171D (2) to approve a scheme to reconstitute that branch. In addition, in V. 12 of 1979 various parties sought orders for the approval of a scheme under s. 171D reconstituting the federal council.

Held: (1) The declarations sought under s. 171D in relation to the federal executive, federal council and various offices should be made as the criteria referred to in that section had been satisfied.

(2) The court is authorized by s. 171D (2) to approve a scheme for the taking of action by the collective body comprising the members of the federal council, as constituted pursuant to the rules as previously certified, for the reconstitution of the federal council.

Gordon v. Carroll (1975), 27 FLR 129, referred to.

(3) The federal council was a suitable body to take action for the reconstitution required as: (a) it remained a collective body within s. 171D (2) despite the declarations made; (b) the action involved should be taken by the most representative body available.

(4) Because of the divergence in the schemes submitted by the parties the court should approve a scheme enabling the federation itself to determine the structure of its federal council, federal executive committee and the offices affected. Under the scheme those bodies and the officers would continue on an interim basis.

(5) Per curiam - The application in relation to the Victorian branch should be refused because: Per Smithers and Evatt JJ. - (a) Although the constitution of the branch committee of management contravened reg. 115 (1) (d) as only a number of committee members had been directly elected thereto, the branch rules provided an effective means for reconstituting that committee; and (b) accordingly the preconditions for an order under s. 171D did not exist.

Per Smithers J. - Appropriate declarations should be made under s. 140 (5D) in relation to branch r. 4 and the branch rules as a whole.

HEARING

Melbourne, 1979, June 19-22; September 17-21, 24-26; 1980, March 13; April 3. #DATE 3:4:1980

RULES NISI. APPLICATIONS.

The matters were heard before a Full Court pursuant to orders under s. 118C of the Conciliation and Arbitration Act 1904.

The facts appear from the judgments of Smithers J. and Northrop J.

B. J. Shaw Q.C. and A. G. Uren, for the claimants in V. 12 of 1979, the respondents in V. 17 of 1979 and certain respondents in N.S.W. 26 and N.S.W. 31 of 1979.

M. Harrison, for the respondents in V. 12 of 1979, the claimant in V. 17 of 1979 and certain respondents in N.S.W. 26 and N.S.W. 31 of 1979.

P. O'Callaghan Q.C. and R. Kenzie, for certain respondents in V. 12 of 1979 and the claimants in N.S.W. 26 and N.S.W. 31 of 1979.

Cur. adv. vult.

Solicitor for the claimants in V. 12 of 1979, the respondents in V. 17 of 1979 and certain respondents in N.S.W. 26 and N.S.W. 31 of 1979: A. J. Macken.

Solicitors for the respondents in V. 12 of 1979, the claimant in V. 17 of 1979 and certain respondents in N.S.W. 26 and N.S.W. 31 of 1979: M. Harrison & Partners.

Solicitors for certain respondents in V. 12 of 1979 and the claimants in N.S.W. 26 and N.S.W. 31 of 1979: McClellands.

T. J. GINNANE

JUDGE1

Relief claimed under s.140(1) by way of conferring Branch status on the Geelong Sub-Branch - V No. 12 of 1979

In this matter the claimants in paras. 1,2 and 3 of the order nisi seek an order that sub-rule (a) of rule 39 of the rules of the Vehicle Builders Employees Federation of Australia (the Union) contravenes s.140(1)(a) of the Conciliation and Arbitration Act 1904 (the Act) in that it fails to provide that there be a Branch of the Union in respect of the City of Geelong and its environs in the State of Victoria.

Rule 39 of the Union is in the following terms: -
"39. TERRITORY AND POWERS OF BRANCHES

(a) Subject to these Rules, the following are recognised Branches of the Federation with full autonomy within their various territories:

(i) The Victorian Branch covering the States of Victoria and Tasmania whose headquarters shall be situated at Melbourne.

(ii) The New South Wales Branch covering the State of New South Wales and the Australian Capital Territory whose headquarters shall be situated at Sydney.

(iii) The Queensland Branch covering the State of Queensland whose headquarters shall be situated at Brisbane.

(iv) The South Australian Branch covering the States of South Australia, Western Australia and the Northern Territory whose headquarters shall be situated at Adelaide.

(b) All Branches shall conform to the Rules of the Federation.

(c) Branches and Sub-Branches shall conform to the rules of the Federation.

(d) In the event of any official or representative visiting on the Federation's business another State or Territory where a recognized Branch is operating, he shall first contact the office of that Branch for the purpose of discussing such business."

It was conceded by Mr. Shaw who appeared for the claimant that, provided that the internal affairs of an organization are regulated in a way which meets the requirements of the Act, those affairs are a matter for the organization itself and not for the Court. His contention was that the internal affairs of the respondent Union were not so regulated. He conceded and relied upon the propriety of an organizational structure comprising branches which elect delegates to a federal council. And he conceded that normally it is for the Union itself to decide how many branches it will have and the basis upon which the membership of each branch should be determined. But he contended that a structure reasonable enough on its face would be open to scrutiny by the Court and the relevant rules subject to sanctions under s.140 of the Act in certain circumstances. In particular if it were shown that despite the apparent reasonableness the voice and interests of a particular group of members was effectively and continuously ignored and frustrated so that that group of members was thereby subjected to conditions which were oppressive, then there would be revealed a latent fault in the rules defining the structure and calling for remedial action under s.140(1).

It was submitted that the voice and interests of the members of the Geelong sub-branch of the Union had been ignored and frustrated by the Victorian Branch and the Federal Council to such an extent that it is manifest that structural change is necessary to ensure the reasonable representation and participation of those members in the affairs of the Union. He said that in the operation of the affairs of the Union according to the existing structure there had emerged between the group of members in the Geelong sub-branch and the Victorian branch and between that group and Federal Council a sense of grievance, bad relations, absence of co-operation, indeed, such a degree of branch hostility to the sub-branch that it could be said that the rules providing for the structure imposed upon members conditions and restrictions which having regard to the objects of the Act were oppressive, unreasonable and unjust and thereby offended against the provisions of s.140(1).

It was said that the evidence establishes more than a mere clash of personalities. Rather the situation is that by reason of the history, the local interests and the ethos of the Geelong membership, sub-branch status of the Geelong membership is incompatible with the representation and participation of those members in Union affairs as required by the Act. In support of those contentions Mr. Shaw referred to conduct disclosed in the lengthy course of litigation which has characterised the relationship between the Geelong Sub-Branch and the Victorian Branch and to a lesser extent the Federal Council. He urged that reference thereto revealed what may be called oppressive and aggressive conduct by the officers of the Victorian Branch and by the Branch itself. And it is true that those officers and the Branch have from time to time taken action against the sub-Branch which has evoked criticism from the Commonwealth Industrial Court, the Australian Industrial Court and the Federal Court. Some of these matters of litigation are discussed in Allen v. Townsend (1977) 31 F.L.R. 431 at p. 448 et seq. The tense situation created thereby is discussed at p. 454. It seems also that latterly history is repeating itself. I do not find it necessary to enter upon the details of the more recent controversies. It may be said quite fairly, however, that much of the controversy between the sub-branch and the branch has arisen out of the lack of definition in the rules of their respective functions, rights, and duties. The relevant rules leave much to be implied, are calculated to produce misunderstanding and have tested the resources of the Courts. The difficulties caused by these factors in the practical working of the affairs of the Union in relation to its Geelong members is discussed in Allen v. Townsend (supra) at p.461 et seq. It is also arguable that the difficulties of which the sub-branch complains arise just as much from the fact that the sub-Branch exists, as from the fact that it is not a Branch. The case for the sub-Branch is that because difficulties arise out of sub-Branch status the Court should see as the only remedy, the increase of influence and representation which would accompany Branch status. But this is highly questionable. The Union has some 48,000 members. It has four Branches, namely Queensland, N.S.W. Victoria and South Australia. There are sub-branches in Victoria and Queensland. The approximate membership of the New South Wales Branch is 10,000 of Victoria 23,000, of South Australia 11,000 and of Queensland 4,000. Under the rules the members of the Geelong sub-Branch are members of the Victorian Branch. The Geelong sub-Branch has been in existence since 1936 and has about 4,000 members.

It is pointed out that so far as the members of the Geelong Sub-Branch seek to make their voice heard in the affairs of the Union at the higher levels they must do so through the Branch. So must the members of any Branch. But under those rules the members of the Geelong sub-branch have the right to vote for the Branch General Secretary, Treasurer, Assistant Secretary and Organizer and if the Sub-branch so claims by resolution of a general meeting of its members, for any Branch Officer or delegate. Any member of the sub-Branch may nominate for election to any Branch Office. All members of the Sub-Branch may attend any meeting of the Branch meetings which are held each month except January.

It is apparent therefore that the sub-Branch members have the benefits of local organization in their sub-Branch as well as full rights to participate in the affairs of the branch as members thereof. Of course these benefits were originally conferred because members working in Geelong would be disadvantaged in attending branch meetings and the like because of the distances involved. With the passage of time these disadvantages have considerably decreased. Modern transport has done much to reduce distance.

Federal Rule 45(a) provides that a sub-Branch shall at all times be under the control of and take instructions from the State Branch. Federal Rule 45(d) requires the sub-Branch the end of each half year after defraying the working and other expenses of the sub-Branch to forward all funds above $200 to its branch provided that where a sub-Branch employs a full time official or officials the amount to be retained by such sub-Branch may be in excess of $200 and in such case the amount to be retained shall be determined by the Branch in General Meeting. Rule 45(d) confers upon a State Branch various important powers in relation to a sub-branch. After examining the relevant rules the Court which decided Allen v. MacWhirter (1974) 157 C.A.R. 1046 said at pages 1052 - 1053: -

"We have been led to our conclusion that the Sub-Branches are intended to have a substantial status within the organization by a number of items in the rules.

In the first place the Objects clause contains in part (h) the object 'to establish Branches and sub-branches throughout the Commonwealth'. Sub-Branches would hardly be dignified by this special reference if they were merely to be matters of administrative convenience.

Secondly, there are a number of rules in which Branches and Sub-Branches are referred to together as having the same standing for the purpose of the particular rule. These include rules 2,6(c)(iii), 6(d)(i), 22,30 and 41.

It is true that there are a number of other rules, apart from rule 45, which clearly place the Sub-Branches in a position subordinate to their Branches. These include rules 4(a), 39 and 42 and Victoria Branch rule 19. But the fact that they are subordinate in some respects does not mean that they are not an integral part of the system, with their own distinct place in it. It is significant that there is no power given to a Branch to disband one of its Sub-Branches."

I refer also to my own remarks in Allen v. Townsend (supra) at pages 461 and 462 which although tending to clarify the respective functions of the sub-Branch and the Branch nevertheless reveal a situation which, for satisfactory operation, calls for a degree of mutual understanding, good will and co-operation. Unfortunately this has not been forthcoming. After reflecting upon the incidents which have occurred since Allen v. Townsend was decided it would seem that both parties have failed to respond. Difficulties are likely to continue until the sub-Branch accepts its role as such and the Branch realises the limits of its right to control the sub-Branch and gives up the idea of attempting to destroy the sub-Branch by tactical methods. These recurring difficulties are the real basis for Mr. Shaws contention that the rules have produced a situation frustrating to the membership.

Mr. Shaw has pointed out that Geelong is 45 miles from Melbourne, that it has a history of separate development, and regards highly its independence and cohesion as a social and industrial unit. He pointed also to the fact that the great bulk of the membership of the sub-Branch is employed at the local Geelong works. Accordingly he said, it is an important factor that there is a local unity and spirit which calls for recognition and expression. In addition it is said that the employees at Geelong have different Industrial interests from those elsewhere in Victoria. He urged that for all those reasons, elimination of tensions and efficient Union service to the Geelong members can be achieved only by the sub-Branch becoming a Branch of the Union.

Nevertheless in my opinion it cannot be said that in failing to constitute the Geelong sub-branch as a branch the rules, in particular rule 39, contravene the provisions of s.140(1) of the Act. It cannot be said that the rules pursuant to which there is no separate branch for the Geelong members offends those provisions because the aspirations of the members of the sub-branch and the ambitions of the Victorian branch bring those two groups into collision. The remedy is to enforce the rules, if necessary through the Court, however arduous this may be, or to change them. But to create a new branch is to re-design the Union and quite inappropriate to be undertaken pursuant to s.140(1). It is important also that although there may be particular aspects of industrial conditions and practices which are special to the employees of Fords at Geelong, it is essential that their general industrial interests be pursued by the Branch on a Victorian basis or by the Federal Council on a National basis. The general award under the Act pursuant to which the bulk of the Geelong workers are employed is a Ford workers award covering the members of the Union employed by the Ford Motor Company throughout Australia. Also Union affiliation and negotiation in fields such as the A.L.P., the Victorian Automobile Chamber of Commerce, the Victorian Chamber of Manufactures and the Metal Trades Industries Association are conveniently established on a state-wide basis. Of course of Branch status were conferred upon the sub-Branch the functions and benefits enjoyed by the sub-Branch would be expanded and its autonomy would extend beyond that relating to local union affairs of local members of the Victorian Branch to that of a Branch having authority in relation to all Union affairs of members in its area.

This would be a major re-organization, especially of the Victorian Branch. It would lose a large part of its membership and its income. It would be excluded from Union activity in an area of Victoria where it has had jurisdiction since long before the creation of the sub-branch. Whatever the benefits, if there would be any, from such a re-organization it is not a matter for this Court. And to say as, is said in this case, that this major change is to be achieved through an attack on rule 39 on the grounds that the Branch fails to accord proper attention to the desires of the sub-Branch, and even acts in a manner hostile to it is to introduce a novel conception of the purpose and scope of s.140(1) of the Act.

If there had never been a sub-Branch at Geelong it could not be said that the rules were necessarily at fault. It is not really to the point to refer to the history of Geelong, the unity and ethos of the dwellers at what has been called "the Pivot", its sense of rivalry with Melbourne, its cohesive development and its desire for independence. What the Union rules are concerned with is the organization of its members for industrial purposes and achievement of industrial benefits in the industry with which it is concerned. The Union having created the sub-branch probably in response to distances which were burdensome in the days when it was created and possibly to those intangibles referred to above, has found that lack of definition of functions responsibilities and rights has led to conflict. There is nothing so surprising about this and the obvious remedy is to amend the rules to supply the much needed definitions. I cannot think that rule 39 imposes conditions and relief under claims 1, 2 and 3 of the order nisi should therefore be refused.

Attack on the Constitution of Federal Council - V No. 12 of 1979

By para. 4 of the order nisi the claimant seeks an order declaring that Federal rule 1(b) and rule 4(a) contrave the provisions of s.140(1)(a) of the Act. Rule 1(b) and rule 4(a) are in the following terms: -
"1(b) The Federal Council shall consist of: -

(i) Two delegates from each Branch elected as prescribed in Rule 4 neither of whom shall be the Secretary of such Branch.

(ii) The Secretary for the time being of each Branch of the Federation;

(iii) The Federal Secretary of the Federation;

(iv) The Assistant-Federal Secretary of the Federation."

"4(a) Each Branch shall elect biennially two delegates to the Federal Council, neither of whom shall be the Branch Secretary."

In respect of rule 1(b)(i) the order is sought first, on the ground that having regard to disparity in membership numbers of the different branches equal representation of each branch in the Federal Council is contrary to the provisions of the Act. Secondly it is sought on the ground that the exclusion of branch secretaries from eligibility to act as an elected branch delegates to Federal Council is contrary to the provisions of the Act. In respect of rule 4(a) the order is sought pursuant to paras. 7 and 8 of the order nisi on the ground that the exclusion of branch secretaries from eligibility for election as branch delegate to Federal Council is contrary to the provisions of the Act.

There are four branches of the respondent Union the current membership of which is approximately as follows, namely,

Victorian Branch 23,000
N.S.W. Branch 10,000
South Australia Branch 11,000
Queensland Branch 4,000

As constituted in accordance with r.1(b) Federal Council has 14 members. As each branch provides two delegates and its own secretary the effective representation of each branch is three members. It is clear that any two branches voting together balance the other two branches. In such a case the effective decision in Council would be made by the Federal Secretary and the Assistant Federal Secretary. This situation may be brought about by the six votes of the 14,000 members of, say the N.S.W. and Qld. branches against the six votes of the 34,000 members of say Victorian and South Australian Branches.

It is apparent that the equal branch representation of the very unequal branches contravens s.140(1)(c) of the Act. The principles expounded in McLeish v. Kane 22 A.L.R. 547, particularly at p.557 et seq are in point. Reference may also be made to McKenzie v. Administrative and Clerical Officers Association (1962) 5 F.L.R. 342, particularly at p.348 and Crealy v. Commonwealth Bank Officers Association (1957) 1 F.L.R. 153 insofar as they discuss the domination by smaller branches of larger branches.

The attack on rule 1(b)(i) based on the exclusion of State Branch Secretaries from eligibility to stand for election as Branch delegates to Federal Council is conveniently considered in relation to the claim made in paras. 9,10 and 11 of the order nisi that rule 1(b)(ii) of the rules of the Union contravenes s.140(1)(a) and (c) of the Act. That rule provides that each Branch Secretary shall be a member of Federal Council. Although no order is specifically sought with respect to rule 1(b)(iii) and (iv) the question has inevitably arisen as to whether the provision that the Federal Secretary and Assistant Federal Secretary shall be members of Council complies with the provisions of the Act and the regulations thereunder.

The provisions directly relevant to these questions are Regulation 115(1)(d) and s.133 of the Act. Regulation 115(1)(d) prescribed pursuant to s.132(2) of the Act, provides that an organization shall be regulated by rules providing inter alia, in relation to the organization for -

(i) the election of: -

(A) a committee of management of the organization and of each branch thereof;

(B) officers of the association and of each branch thereof;

(C) any conference, council, panel or other body (additional to the Committee of Management) which is empowered to determine policy or to exercise functions of management in the organization or branch.

(ii) the powers and duties of committees and of officers;

(iii) . . .

(iv) the removal of members of the committee and of officers;

(v) the control of Committees of the organization and its branches by the members of the organization and the members of the branches respectively.

Section 133 of the Act assumes there will be an election for each office in an organization and lays down conditions additional to those prescribed pursuant to s.132(2) for "The election of the holder of each office within the organization" (See s.133(i) (a)(b)(c) and (d)).

The definition of "Office" contained in s.4 of the Act emphasises the separateness of the traditional offices of organizations such as the office of member of Committee of Management, President, Vice-President, secretary and assistant secretary. By virtue of the definition "office" means, inter alia:

(a) the office of a member of the committee of management of the organization or branch;

(b) the office of president, vice-president, secretary assistant secretary or other executive officer by whatever name called of the organization or branch;

(c) the office of a person holding, whether as trustee or otherwise property of the organization;

(d) every office within the organization or branch for the filling of which an election is conducted within the organization or branch.

It follows from the foregoing that to comply with regulation 115(1)(d) the rules of an organization must, in relation to the office of a member of the committees of management, provide for the filling of that office by election To my mind it is fundamental to the concept of filling an office by election that the election contemplated is an election to that office and not to some other office. In the case of this union the provision in the rules that there is to be a Federal Council is clearly a provision creating the Committee of Management required by regulation 115 (1)(d). It is manifest therefore that to comply with the regulations and the Act the rules must provide for election to the offices of membership of the Federal Council by election thereto.

The effect of the provisions of rule 1(b)(ii),(iii) and (iv) that the Branch Secretaries and Federal and Assistant secretary shall be members of Federal Council is that each of the persons holding those offices is invested with an additional office, namely that of member of the Committee of Management namely, the Federal Council. The office taken by the person concerned can be filled only by that person. Nevertheless the office that he takes is in all respects that of a member of the Committee of Management. And it is clear that the rules do not provide for the holding of an election of the person concerned to that office. They only operate to fill the office of a member of the Committee of Management when some person has been elected to another specified office. In effect the rules provide that the persons elected to the designated executive offices shall accede to the office of member of Federal Council without election thereto. The effect of the rule in question is to create a position on the council that is essentially an office and to prescribe that it will be filled without an election by a nominated person. It is not too much to say that the rule does the very thing which the statute and regulations are designed to avoid, namely the accession to any particular elective office by some means other than by election.

It is sought to justify the provisions of rules 1(b)(ii) and (iii) and (iv) by reference to the circumstance that each of the designated executive officers have, according to the rules, acquired the offices they hold by an election, conducted in the face of a provision in the rules that any person standing for election for that executive office would automatically become a member of Federal Council if elected to that executive office. It is said that members of the organization participating in that election would know that provision of the rules, or must be deemed to know it, and may therefore be treated as participating in an election of the candidate not only to the executive office in question,but also to the office of member of Federal Council. And it is said that in this way the rules do provide for election to the office of member of Council to which the elected executive officer will accede upon election to his executive office. It may be mentioned in passing that it seems somewhat difficult to think that when the legislative authority was making a law the primary purpose of which was to ensure the democratic control of Unions by the membership, it, or the Minister implementing those provisions in regulation 115, would act on the view that any substantial proportion of the membership would have such a knowledge of the rules as to be aware of a rule that a branch or Federal Secretary was automatically a member of Federal Council. Such an assumption would be quite unreal and out of harmony with the nature of the governmental exercise in hand. And indeed if a member were so aware and his knowledge also extended to the relevant statutory provisions he might wonder why, although the office of member of Federal Council and the office in respect of which he was invited to cast his vote were separate offices, he was asked to vote for the election of the candidate to only one of those offices. To my mind it is quite artificial to regard a provision for the election of a candidate to the office of say, Branch Secretary, as an election to the Office of Federal Councillor merely because of a provision in the rules that the person elected as Branch Secretary shall be a member of Federal Council.

Looking at the legislative provisions one is forced to the conclusion that they envisage a separate election, direct or collegiate, for each office in the organization. The concept; no doubt, is, that in respect of each office the members either directly or in college shall have a choice. When a rule provides that a person elected to a particular office shall thereupon accede to another office the electorate is denied a choice as to whether it desires that that person shall hold that other office. In connection with the filling of that latter office the electorate has had no choice as to whether or not that person shall hold that office.

The procedure for the filling of the office of Federal Councillor created by the rule for automatic accession thereto amalgamates election to two offices in the process of an election for one. The organization must have Branch Secretaries and Federal Secretaries and members cannot properly participate in the affairs of the Union unless they vote in the elections for the filling of those offices. A democratic procedure requires that the electorate, presented with candidates for election as Federal or Branch Secretaries, should be able freely to choose the best candidate according to his qualifications for the office with respect to which they must vote. Where there is a provision that the candidate will upon election to that office also assume another, the voters' considerations are not free in this respect. Voters might well consider any particular candidate a good administrator but not a good policy man or the reverse. Under the system adopted they lose the chance to vote for the best man for each particular office which is involved. Those voters who understand the position must consider the qualifications of the various candidates for the other office as well. Those who don't vote in ignorance and cast their vote with reference only to part of the considerations they should have in their minds and are to that extent misled. The voting paper will give them no assistance. The election is inevitably a muddled one. The regulation appears to me to contemplate that an election for a particular office shall be complete in itself and disparate from election to any other office.

In all its procedural aspects an election for Secretary is an election for that office and nothing else. So far as it operates as an election for something else that aspect as it operates as an election for something else that aspect has never been before any electorate and is something added by the external force of the rule. It would seem to me difficult to think that the Minister in promulgating regulation 115(d) contemplated that in relation to any of the offices in respect of which regulation 115 requires that there be an election the provisions of that regulation would be satisfied by a rule which provided that a person who was elected to one of those offices should thereupon accede to another or others thereof. Was it contemplated, for instance, that a rule might provide that a person elected as Vice President should automatically accede to the office of Secretary, or that a person elected as trustee should automatically fill the office of Vice-President. The scope for such provisions would be very wide. It is the practice of some unions to have elections for organizers, returning officers and door keepers. Such persons hold offices within the meaning of the definition in s.4. Would regulation 115(1)(d) be satisfied by a rule that a person elected doorkeeper or even returning officer should accede to the office of President or Secretary? Such a rule would eliminate the necessity for a separate election to the office of President or Secretary. And of course it could be said that those voting for doorkeeper or secretary know, or if they studied their rules would know, that, the effect of their votes for a successful candidate for doorkeeper was a vote for filling not that office alone but also the office of President. For myself I fail to see any ground for departing from a simple construction of the statute and the regulation which on their face require that each of the offices to be filled under rules providing for election thereto shall be filled by an election which is an election for that office at which the voters are asked to vote in respect of that office.

So far as rule 1(b)(ii) is concerned its inevitable effect is that there is on Federal Council a member who has not been elected to that position. If the person elected as Branch secretary had stood for election as such and also as delegate to Federal Council he might well have been elected to one and not the other. The rule effectively adds an unelected member of Council to those who have been elected. It may be noticed in passing that the added member remains a member for four years whereas elected members lose their membership after two years. In my view rule 1(b)(ii) is therefore invalid.

The same considerations affect the provisions of rule 1(b) (ii) and (iv) which provide that the Federal Secretary and Assistant Federal Secretary of the Union are to be members of the Federal Council. In my view each of rules 1(b)(iii) and (iv) are invalid for the reasons discussed immediately above. Also that part of r.4(a) which excludes branch secretaries are excluded from eligibility for election as branch delegates to Federal Council and the corresponding part of rule 1(b)(i) are invalid because they are designed to serve the scheme created by the invalid provisions of r.1(b)(ii) and are not otherwise supportable on any valid ground. In my opinion therefore in current conditions of branch membership the whole of rule 1(b) contravenes the provisions of s.140(1)(a) and (c). Relief to this effect relates also to the claims made in paras. 5, 6, 7, 8, 9, 10 and 11 of the order nisi.

I would add that I do not see any reason based on democracy or good organization why the Federal Secretary or for that matter the Federal Assistant Secretary should not be a member of Federal Council. It could be that the legislature might be induced to take this view and if so to take appropriate action. It would be a different matter that the law should sanction rules which provide generally that a person elected to one office should automatically assume another.

Attack on rules relating to election of President and certain other officers

By paras. 12 and 13 of the order nisi the claimant attacks rules 5(b) and 9(d) of the Federal Rules of the Union. Those rules provide for the election of the President, the Vice-president and Trustees of the Union to be elected by and from the members of Federal Council at biennial meetings of the Council. The claimant argued that if there are on Federal Council persons who have not been elected as members thereof the Council is not a competent body to operate as part of a collegiate electoral system within the meaning of s.133(1)(a)(ii) of the Act as defined in s.4 thereof. An election by and from the Council so constituted is, it is said, not an election by and from the persons elected to a number of offices by a direct voting system. See the definition of collegiate system in s.4 of the Act.

I am not satisfied that this argument is correct. Even if the Branch and Federal Secretaries were not elected to the Federal Council they certainly were elected to the offices they hold. It may be that notwithstanding the invalidity of r.1(b) all the persons who comprise the Federal Council according to it may constitute a group of designated persons who have been elected to "one of a number of offices" within the meaning of the definition of "collegiate system" contained in s.4 of the Act and are thus qualified to perform the functions of the second stage of the electoral system. If so rules 5(b) and 9(d) do not offend the provisions of s.140(1) or s.133 or regulation 115(1)(d). However, whether this be so or not rule 5(b) does not, in my opinion contravene those provisions. It is a perfectly proper provision for the election of Union officers by a Federal Council validly constituted. Its own validity is not affected by the invalidity of rule 1(b) which purports to prescribe the persons who shall be the members of Federal Council. It but awaits a validly constituted Council upon which event it will function quite lawfully and effectively. The same might be said about rule 9(d) save that it proceeds upon the view that the Federal Secretary will necessarily be a member of the Council. If he is not a member of Council that part of the rule which places duties and rights on the Federal Secretary just could not apply. The rule should in my opinion be construed as though the expression "if a member of the Council" appeared after the words "Federal Secretary". If the Federal Secretary be not a member of Council the persons elected to the Council may of course choose their own chairman for the conduct of the business to be undertaken in accordance with rule 9(d).

Branch autonomy concerning submissions on industrial questions

By para. 14 of the order nisi the claimant seeks an order that rule 48(c) contravenes the provision of s.140(1) (a) and s.140(1)(d) of the Act in so far as that rule makes it a condition of the submission by a Branch Committee of Management of a local question or dispute to a State Industrial Tribunal that approval of such a submission has been given by the Federal Executive Committee. In my opinion this provision is a direct invasion of the autonomy of the Branch and offends s.140(1)(d). Of course it may be that a question or dispute although having the appearance of being "local" may have attributes which give it the quality of being more than local. But this does not justify the restriction which the rule imposes in respect of questions and disputes which are truly local within the meaning of the rule.

Attack on election of President and other officers in March 1979

By para. 16 of the Order Nisi the claimant seeks an order that the respondents treat the purported election of certain of the respondents as Union Officers, namely D. Foreman as President, E. Burge as Vice President and C. Jarrad and W. Allamby as Trustees, at a purported meeting of the Federal Council held in Adelaide on 19 to 22 March 1979, as null and void on the ground that at the material dates rule 1(b) was invalid and those elected to the council were not validly elected thereto.

The elections pursuant to which the persons who attended the meeting in Adelaide were elected took place when branch membership was approximately as stated above in the discussion concerning the validity of Federal Rule 1(b). Accordingly it is apparent that rule 1(b) was invalid at the date of those elections and no validly constituted Federal Council could be elected pursuant to them. The election by the Federal Council in March 1979 of the officers mentioned above was therefore null and void and the respondents should be ordered so to treat it.

Purported alterations of rules by "Federal Council"

By paras. 17 and 18 of the order nisi the claimants seek an order that the respondents treat as null and void any purported alteration to the rules of the Union and any resolutions of the meeting at Adelaide of 19 to 22 March 1979 relating to the alteration of the rules of the Union or to the administration, staffing or use of funds and in particular such resolutions as purport to direct the Federal Secretary to take such action as would prohibit the Geelong sub-branch from attacking the rules of the Union. For reasons set forth above it is clear that the orders sought in these paragraphs should be granted.

Relief sought pursuant to s.171C in N.S.W.No. 31 of 1979

By application dated 25 September 1979 filed in these proceedings the respondent Townsend seeks orders pursuant to s.171C(2) validating all acts done, matters determined or resolutions passed at meetings of the Federal Council of 15, 17 and 18 of August 1979 and 10 September 1979.

By application dated 2 October 1979 filed in these proceedings the respondent Townsend seeks orders pursuant to s. 171C(2) validating resolutions and purported rule amendments carried by the Federal Council at the meetings aforesaid amending the Federal Rules of the Union by,

(a) removing the words "or sub-Branch" from Federal Rules 2(g), 5(c), 6B;

(b) deleting rule 41 and substituting therefor a rule providing inter alia that the supreme governing authority of each Branch except the N.S.W. Branch shall be its Branch Executive Committee or Committee of Management save that where such Committee deems fit it may from time to time reserve any particular question for the determination of a Branch General Meeting or at some plant, factory, shop or District General meeting for such determination save that all proposed alterations to Branch rules shall be referred to Branch General meetings;

(c) making a number of other substantial changes.

The N.S.W. Branch delegates and its Branch Secretary were absent from the relevant meeting. Their absence was justified on technical grounds. Without approving their reliance on those grounds it remains true that such a ground did exist and for present purposes the important factor is that the N.S.W. Branch representatives were not present.

These amendments are so fundamental that it would not be just or proper that they should be enacted other than by a Federal Council constituted in accordance with the Act where the branches and members are appropriately represented. They threaten the existence of the Geelong sub-Branch and other sub-branches and they threaten the authority of General Branch meetings in the management of the Branches. As appears from my observations in proceedings V. No. 12 of 1979 the Federal Council was not validly constituted during 1979. In addition the amendments were made at the relevant meetings in the absence of any representatives of the Geelong sub-Branch or any of the other sub-Branches. Also the amendments were made by a council which at the relevant time was well aware of the grounds of invalidity alleged against it which in fact rendered its proceedings invalid. I would not regard this last matter as necessarily leading to a conclusion that its proceedings should not be validated. There may be occasions where the council might legitimately and fairly act with such knowledge but in the best interests of the organization. In such a case I do not see why the Court should not validate what was done. But in this case there is a real risk of injustice to sub-branches and the members of sub-branches, there is a real challenge to the authority of General meetings and other major changes are involved. Such amendments by an invalid body could only be validated where it was abundantly clear that validation would not do substantial injustice to the organization or any member thereof. I am not so satisfied. There is an additional reason why in my opinion the amendments should not be validated. That is that they provide for the membership of Federal Council of the Branch Secretaries, the Federal Secretary and Assistant Secretary, without the persons holding those offices being elected as councillors. The basis upon which I would refuse validation on this ground is set out in my observations in proceedings V No. 12 of 1979.

Approving a Scheme

The question then arises whether relief can be afforded to this organization under s.171D. It is a serious situation that by reason of the numerical changes in the membership of branches rule 1 pursuant to which the constitution of the council is determined was in contravention of s.140(1) of the Act before the last elections pursuant to which the organization purported to elect its delegates to Federal Council. Under that rule delegates go out of office after two years and they go out of office at different times because the elections in the branches are held at unsynchronised dates. The disparity in branch membership which brought rule 1 into contravention of s.140(1) occurred before the last elections. No suggestion was made to the Court that it might be possible to provide for a current membership of the Federal Council by identifying and locating past members whose membership may possibly have persisted by the application of some principle of holding over. It appears therefore to be clear that by reason of the invalidity of rule 1 the Federal Council is a collective body of the organization which has ceased to exist or to function effectively and that there are no effective means under the rules of the organization by which it can be reconstituted or enabled to function effectively. In this situation the claimants in proceedings V. No. 12 of 1979 and the claimants in proceedings N.S.W. No. 26 of 1979 have submitted to the Court for approval schemes for the reconstitution of the Federal Council to enable it to function effectively. Each of these schemes is designed to achieve the election of a Federal Council comprised of Branch representatives on a fair and reasonable proportionate basis as between branches. It would appear manifestly just, equitable and convenient that this should be achieved.

In these circumstances s.171D authorises the Court, by order, to approve a scheme for the taking of action by a collective body of the organization or by an officer or officers of the organization for the reconstitution of the collective body, namely the Federal Council which has ceased to exist.

A question arises as to whether the members of the Federal Council constituted according to the rules of the organization as heretofore certified would constitute a collective body within the meaning of s.171D(2). The next question is whether it is a suitable body to take action for the reconstruction of the Federal Council according to rules which do not contravene the provisions of s.140(1).

As to the first of these questions the answer is in the affirmative. Part IXA of the Act is designed to facilitate the correction of situations which occur from time to time in organizations in which their government is frustrated by non-observance of the rules or failure of the rules to comply with the provisions of the Act where correction can be achieved without injustice to the organization or members or creditors thereof. The situation in this organization is that because of the changes in membership of branches due largely to industrial developments out of the control of the Union there is a serious imbalance in branch membership which has caused rule 1(b)(1) to contravene s.140(ii) of the Act.

This situation should be corrected. Its current manifestation is that in the words of s.171D "a collective body of the organization" namely the Federal Council has ceased to exist or to function effectively. To reconstitute that collective body and to enable it to function effectively new rules providing for a Federal Council which will not offend s.140(1) must be made. They can be made by the members of the Federal Council constituted as provided in the rules heretofore certified, acting pursuant to a scheme approved by the Court, if, notwithstanding the defects in those rules and invalidly of the Federal Council so constituted, they are a collective body within the meaning of s.171D(2). Whether they are or not depends on the interpretation of that section in the context of Part IXA. From the definition of "collective body" in s.171A and the provisions of s.171B it is apparent that a reference in PartIXA to a collective body includes a Committee of Management of an organization with respect to which there is an invalidity in the election of the members of that body. Such a collective body is a body which does not exist as a legally constituted body according to the rules of the organization. In s.171B it is a collective body comprising members all or some of whom are invalidly elected which is referred to as a collective body. The members of that body are to be identified by reference to the factual acts of members of the organization in voting for them in elections. For the purposes of Part IXA there is no incongruity in regarding and referring to that collection of elected persons as a collective body. It appears to me that this is what Part IXA does. Accordingly it is the actions of such a body which may be validated. It follows that it is such a body which may take approved action pursuant to an approved scheme for the reconstruction to enable itself to function effectively.

In a case like the present it is clear that the Federal Council must be reconstituted. The federal Council is by definition a "collective body for the purposes of Part IXA". Its invalidity does not deprive it of its character as a collective body.

The alternatives before this court are to approve a scheme whereby the necessary action to reconstitute the collective body might be taken by a collective body of the organization or by an officer or officers of the organization. In my opinion it is not in accordance with the spirit of the provisions of the Act that in a case like this officers of the organization should be authorised to take such action. Such action when taken must, in order to give satisfaction to members, be taken by a representative body of members. True it is that the collective body must be reconstituted because its representation is imbalanced. It might be thought that it itself is therefore insufficiently representative for the task of reconstruction. But it is the most representative body available. It is representative of each Branch. When the nature of reconstruction is considered it is in my view sufficiently representative for that task. The task is a limited one, not to devise an ideal constitution, but to devise one which will comply with the provisions of the Act. A Federal Council elected in accordance with such a constitution although not necessarily ideal would at all times have satisfied the statutory conditions of representative government. It is to be remembered also that the rules providing for the reconstruction of the Federal Council will be scrutinized by the Industrial Registrar pursuant to s.139(4).

Accordingly in my opinion the Court is authorised by s.171D(2) to approve a scheme, for the taking of action by the collective body comprising the members of the Federal Council as constituted pursuant to the rules as heretofore certified, for the reconstitution of the Federal Council of the organization and to enable it to function effectively. In my opinion it is appropriate that such a scheme be approved.

In a scheme of reconstruction submitted by the applicants Sheriff and others in proceedings No. 12 of 1979 the basis of branch representation adopted is as follows: -
"Branches with up to 4,000 members 3 delegates
Branches with 4,001 to 8,000 members 4 delegates
Branches with 8,001 to 12,000 members 5 delegates
Branches with 12,001 to 16,000 members 6 delegates
Branches with 16,001 to 20,000 members 7 delegates
Branches with 20,001 to 24,000 members 8 delegates
Branches with more than 24,000 members 9 delegates."

In an alternative scheme of reconstruction submitted by the respondents to those last mentioned proceedings the concept was adopted of the "existing" Federal Council voting on a branch proportional basis in a rule-making procedure to make rules for the reconstruction of the Federal Council on a proportional branch representative basis as follows: -
"1. Each Branch will be represented at the Federal Council meeting to be held at Melbourne, Victoria, on 7th November 1979, or at any such meeting if postponed or adjourned to some later date, as is determined by the Rules of the Organization and in particular Rule 1 thereof.

2. The votes carried and exercised by the Branch Secretaries and delegates for the purpose of that Federal Council meeting or meetings referred to in paragraph 1 hereof shall be governed by the following formula:

(a) Each Branch Secretary and two delegates from each Branch shall each have one vote where the Branch's financial membership does not exceed 1500.

(b) Where a Branch exceeds 1500 financial members then its Branch Secretary and two delegates shall each have an additional vote for each additional 1500 financial members or greater part thereof.

(c) Financial members shall be those members who were financial as at the 30th June, 1979.

(d) The phrase 'greater part thereof' shall mean 1001 financial members as at the 30th June, 1979.

3. That the voting powers of the Federal Secretary and Assistant Federal Secretary for the purposes of that Federal Council Meeting shall be governed by the following formula:

(a) There shall be a quota of votes alloted to the Federal Secretary and Assistant Federal Secretary combined which shall be equal to one sixth of the total number of votes attributable to Branch Secretaries and delegates under paragraph 2 hereof and if such number is not an even number then it will be calculated to the lower even number.

(b) The Federal Secretary and the Assistant Federal Secretary shall each carry and exercise one half of the votes arrived at by (a) above."
The approximate current membership of the branches and Officer's voting strength is as follows: -

Branch No. of Votes M'ship Percentage Percentage
______ ____________ ______ (inc. Branch Secs) of Members of Votes

__________ ________

N.S.W. 3 10331 21.75 21.428

Vic. (includ-

ing Geelong) 3 22446 47.26 21.428

Qld. 3 4125 8.68 21.428

SA 3 10585 22.29 21.428

Fed.Sec. 1 7.142

Assistant

Fed.Sec. 1 7.142

__________________________________________________

Total 14 47487 99.98 99.996

___________________________________________________
It was said by the Court in Gordon v. Carrol & Ors. (1975) 27 F.L.R. at p. 166: -

"although s.171D says that the Court may 'approve a scheme it would give serious consideration to devising a scheme itself if the Federal Executive did not do so. In the event it was not necessary to decide the matter in this case but we are inclined to view that a power to approve a scheme must include a power to amend a scheme or where necessary to devise one. It follows that whenever possible the scheme should be proposed by those who will have to administer it."

However, in view of the divergence between the schemes submitted by the parties in this case it is desirable that the organization in representative meeting devise for itself a constitution for the Federal Council which will reflect representative opinion so far as it can be ascertained at this stage. When a Federal Council assembles after election according to the rules to be made for the purpose of reconstruction it will be able to consider whether those rules should be continued or amended.

As was said in Gordon v. Carrol (supra) at p.174, "11 organizations have, through their office bearers, an obligation to their members, to keep their rules under review and to see that they do not fall behind the developing needs of the organization". In this case a review of the rules from time to time might have avoided the present impasse. However, it is the intention of Parliament that when such an impasse has arisen the Court has authority to approve an appropriate scheme where it is satisfied that an order approving such a scheme will not do substantial injustice to the organization or to any member of the organization. I am so satisfied with respect to the order approving the scheme set out in the appendix to these reasons for judgment and would therefore order accordingly.

Proceedings N.S.W. No. 26 of 1979

In an application filed on 15 August 1979 in proceedings N.S.W. No. 26 of 1979 the applicants being officers of the N.S.W. Branch of the Union sought declarations pursuant to s.171D of the Act that:

1. The Federal Council of the Union is unable to function effectively and there are no effective means under the rules by which it can be enabled to function effectively;

2. The Executive Committee of the Union has ceased to function effectively and there are no effective means under the rules of the organization by which it can be enabled to function effectively;

3. A declaration that the Offices of Federal President, Federal Vice President, member of Federal Council and the office of member of the Federal Executive purportedly held by the respondents Foreman (Federal President), Jarrad (Federal Vice President), the applicant Thompson and the respondents Foreman, Burge and Jarrad (members of Federal Council) and by the respondents Foreman, Burge and Jarrad (members of Federal Executive) are vacant and there are no effective means under the rules of the organization to fill such offices.

4. A declaration that the Victorian Branch of the Union has ceased to function effectively and there are no effective means under the rules by which it can be enabled to function effectively;

5. An order under s.171D(2) approving a scheme for the reconstitution of the Branch or to enable it to function effectively and for the filling of the offices aforesaid.

6. Such ancillary or consequential declarations as the Court shall see fit to make as to (1) above.

As to (1) above. For reasons stated above the declaration sought should be made.

As to (2) above. For similar reasons the declaration sought should be made. The Executive Committee is a panel or body empowered to exercise functions of management within the meaning of regulation 115(1)(d)(i)(C). Under the rules it is not an elected panel or body. In addition the Federal Executive Committee lacks validity because of the invalidity of the Federal Council itself for reasons set forth above.

As to (3) above. Because of the invalidity of the Federal Council the declaration sought should be made.

As to (4), (5) and (6). According to Rule 4 of the Branch rules what is called the Branch Executive or Committee of Management is brought into being. Rule 4 provides as follows: -
"4. Branch Executive or Committee of Management The Branch shall be governed by the following officers: President, two Vice-Presidents, General Secretary-Treasurer, Assistant Secretary and Organizer, Organizers, Three Trustees, the ex-President and four (4) committeemen. The Branch Executive shall meet every fourth Tuesday of each month and shall deal with all correspondence, organizer's reports and any other business that may be placed before them. Their decisions in all cases, (where possible) shall be referred to the Branch meeting for endorsement, or otherwise. Seven (7) members shall form a quorum."

Of the officers who are to govern the Branch according to rule 4 only the four committeemen are persons for whose presence on the Committee there is to be an election. Thus rule 4 sets up a Committee of Management by appointing thereto persons who have been elected to other offices, and one person, the ex-President, whose other office has expired. As the Committee is at present constituted there are twelve of such appointed officers and four elected Committeemen. According to the view expressed above as to the requirements of regulation 115(1)(d) a Committee of management or a Branch Executive so constituted does not comply with those requirements. Having regard to the high proportion of non-elected members thereof it must be regarded as invalid.

It is manifest that action should be taken to correct this position. However, pursuant to Branch Rule 27, the Branch rules may be amended at a Special Branch meeting. Therefore it cannot be said that there are no effective means by which the Branch Committee of Management may be reconstituted or enabled to function effectively. Accordingly the condition of an order approving a scheme inder s.171D is not fulfilled. However, under the application for ancillary declarations it is appropriate that the Court should by order pursuant to s.140(5D) declare that rule 4 contravenes the provisions of s.140(1)(a) in that rule 4 of the Victorian Branch Rules provides for a Branch Committee of Management comprised of members who have not been elected and that the rules of the organization contravene s.140(1)(a) in that they fail to provide for the election of a Committee of Management of the Victorian Branch of the organization.

Proceedings N.S.W. No. 31 of 1979

In these proceedings orders were sought,

1. declaring that the meetings of the Federal Council of the Union held on 15, 17 and 18 August 1979 and any meeting of the Executive Council held in connection with such meetings were null and void and of no legal effect;

2. declaring that the resolutions purportedly passed at such meetings are null and void and of no legal effect;

3. ordering that the respondents and each of them perform and observe the rules of the Union by ceasing to recognise as valid the resolutions aforesaid.

For reasons appearing hereinbefore the orders sought should be made.
Application by L. C. Townsend and others for orders validating purported amendments of rules at meetings held in August and September 1979 (N.S.W. No. 31 of 1979)

In the matter of the two applications filed 25 September 1979 and 2 October 1979 respectively in proceedings N.S.W. No. 31 of 1979 for relief pursuant to s.171C(2) of the Act reasons set forth above both applications should be refused.

JUDGE2

There are before the Court four matters, namely V12 of 1979, V17 of 1979, 26 of 1979 and 31 of 1979 which, by consent, were heard concurrently. Applications were filed under both s.171C and s.171D of the Conciliation and Arbitration Act 1904 (the Act) in two of the matters.

I have had the advantage of reading the reasons for judgment herein of both Smithers and Northrop JJ.

The grounds relied upon in the various matters and applications together with the history in relation to the Vehicle Builders Employees Federation of Australia (the organization) and its Geelong Sub-branch together with the various rules of the organization under challenge are fully set out in the reasons of Northrop J. and I find it unnecessary to repeat that history or to set out the relevant rules.

Matter V12 of 1979

The order nisi granted herein dated 4 April 1979 seeks 18 orders.

Paras. 1 to 15 inclusive seek orders under s.140 of the Act whilst paras. 16, 17 and 18 seek orders under s.141.

Paras. 1,2 and 3 seek orders that r.39(a) of the certified rules of the organization contravenes the Act in that it fails to provide for a branch of the organization in the city of Geelong, Victoria and its environs.

I am of the view that such orders sought should be refused for the reasons for judgment in this regard of Smithers J. with which I agree. I would only add that although there is no rule in the certified rules granting specific power to disband any sub-branch of a branch of the organization such a power could in my view be implied under the present rules. But it is unnecessary however to make any final decision in this regard or whether, assuming such implied power, certain conditions or procedures should or would be required to implement such power in certain circumstances.

Paras. 4, 5 and 6 seek orders that r.1(b)(i) and r.4(a) contravene the Act in that those rules provide for an equal number of delegates from the various branches of the organization to its Federal Council, its supreme governing body. Although there was some dispute as to the actual number of members attached to each branch of the organization it is clear that on any set of figures there is an imbalance in the voting power of the branches at Federal Council and that such imbalance is of a degree that falls outside the spectrum referred to in McLeish -v- Kane (1978) 22 A.L.R. 547 and accordingly, in my view, both r.1(b)(i) and 4(a) in this regard contravene s.140(i)(c). I agree with the reasons of Northrop J. that the whole of the rule is contrary to s.14)(i)(c) in this regard.

Paras. 7 and 8 seek orders that r.1(b)(i) and r.4(a) contravene s.140(i) in that such rules preclude a secretary of a branch of the organization being elected a branch delegate to Federal Council. Rule 1(b)(i) and (ii) and r.4(a) in this regard are complementary. The rules of the organization do not prevent a member being a candidate for both the office of branch secretary and the office of delegate of that branch to Federal Council. If such member is elected to both offices then he would be required to elect which office he wished to hold. Consequently I am of the view that the attack on rules 1(b)(i) and 4(a) in this regard fails.

Paras. 9, 10 and 11 seek orders that r.1(b)(ii) contravenes s.140(1)(a) of the Act in that such sub-rule provides that the secretaries of the various branch of the organization shall be members of its Federal Council without any of such secretaries being elected, within the meaning of the Act and Regulations thereunder, to hold the office of a federal councillor. I have already expressed the view that r.1(b)(ii) is contrary to s.140(i)(c) as being contrary to the principles set out in McLeish -v- Kane (supra) if r.1(b)(i) is struck out, but having regard to the proposed scheme approved by the Court under s.171D of the Act, and as grounds 9, 10 and 11 were fully argued the Court's view thereon should be stated. I am of the view that such sub-rule is contrary to s.140(1)(a) and agree with the reasons for judgment in this regard of Smithers J. It is pointed out, that although no order was sought that sub-rules 1(b)(iii) and (iv) (which refer to the General Secretary and the Assistant General Secretary) contravene s.140(1)(a) the reasons expressed concerning sub-r.1(b)(ii) would apply equally to sub-rules i(b)(iii) and (iv). Further the remarks of Smithers J. concerning the possible legislative amendment to the Act or Regulations in regard to a Federal Secretary of an organization being permitted, if a particular organization so desires, to assume automatically the office of a member of the committee of management are noted. For my part I would add to the Federal Secretary, the offices of the various branch secretaries in the belief that generally such secretaries could bring to an organization's supreme governing body and its federal management committee, local administrative knowledge.

Paras 12 and 13 seek orders that r.5(b) and 9(d) of the rules of the organization contravene the Act in that they provide for the election of the holders of the offices of President, Vice-President and 2 Trustees by a voting system which is not in accord with the Act and Regulations made thereunder. In my view, if the Federal Council was validly constituted the election of such officers by such Council in accordance with r.5(b) and 9(d) would be valid for the reasons expressed by Northrop J. in this regard.

Para. 14 seeks an order that r.48(c) contravenes s.140(i)(d) of the Act insofar as it contains the words "and from the Federal Executive Committee". I am of the view that the sub-rule does not contravene s.140(i)(d). With respect, the conclusion of Northrop J. in this regard is, in my view, correct, but for my part I limit the reasons for such conclusion to that part of s.140(i)(d) which reads: "shall be such as to provide for the autonomy of a branch in . . . matters concerning the participation of the branch in any State Industrial Conciliation and Arbitration system."

Para. 15 seeks orders that the certified rules of the organization contravene s.140(i) in that they fail to make provision for the control of committees of the organization by its members. Rule 15 purports to provide for such control by means of a plebescite of members under certain conditions. I am of the view that r.15 together with certain of the other rules of the organization fall within the principles set out in the reasons for judgment by Sweeney J. in Boland -v- Federated Liquor and United Industries Trades Union (unreported Judgment) 3 April 1979 concerning the meaning of control of committees referred to in Reg. 115(i)(d) which I respectfully adopt. Accordingly, I agree with the reasons of Northrop J. herein in this regard. Paras. 16, 17 and 18 seek orders under s.141. As I am of the view that the Federal Council which met in Adelaide between 19 and 22 March 1979 was then invalidly constituted I am of the opinion that orders as asked in these paragraphs should be made.

V17 of 1979

As the orders sought herein were not pressed by the claimants the order nisi should be discharged.

No. 26 of 1979

This is an application under s.171D of the Act and is in identical terms to the application filed under that section by the claimants in V No.12 of 1979. I agree with the reasons for judgment of Smithers J. and of Northrop J. in regard to the necessity for a scheme under s.171D insofar as the Federal Council and Federal Executive are concerned, and agree with the particular scheme proposed. I agree with the reasons of Smithers J. that in regard to the Victorian Branch of the organization there are effective means under the rules of the organization or the branch by which it can be made to function effectively assuming that such branch has ceased to function effectively. Accordingly no declaration in this regard under s.171D should be made. I do not think it appropriate to make orders under s.140 of the Act on an application made under s.171D.

No. 31 of 1979

In this matter orders were sought pursuant to s.141 calling upon certain members of the Federal Council to show cause why certain resolutions passed at a meeting of the Federal Council held on 15, 17 and 18 August 1979 and consequential Federal Executive Meetings should not be treated as null and void. The grounds on which such orders were sought were that the Federal Council and Federal Executive at the relevant times were improperly constituted for the same reasons which applied to meetings of those two bodies in March 1979. Clearly the Federal Council and Executive were still invalidly constituted in August 1979 and I agree with the proposed orders in this regard.

Applications under s.171C

I am of the view that the applications under s.171C of the Act should be refused for the reasons in this regard of Smithers J. with which I agree.

JUDGE3

There are before the Court a number of related matters concerning the Vehicle Builders Employees Federation of Australia, hereinafter called "the Federation", an organisation of employees registered under the Conciliation and Arbitration Act 1904, as amended, hereinafter called "the Act". With the consent of all parties the matters were heard concurrently. In order to assist in an understanding of the issues raised, it is necessary at the outset to identify the particular proceedings before the Court.

On 4 April 1979 G.E. Sherriff, a member of the Federation, obtained a rule nisi in matter V. No. 12 of 1979 calling upon L.C. Townsend, J.K. Sandilands, C.E. Jarrad, J.E. Buck, W.J. Allamby, D.J. Foreman, J.D. Bennett, P.W. Meehan, G.M. Burge, A. McDonald, C. Austin, J.S. Thompson, J. O'Neill, W.Taylor and the Federation to show cause why orders numbered 1 to 18 inclusive should not be made. Sherriff is a member of the committee of management of the Geelong sub-branch of the Victorian branch of the Federation, hereinafter called "the Geelong sub-branch". The respondents to the proceeding, other than the Federation, constitute the members of the Federation currently holding office, or purporting to hold office, as a member of the Federal Council of the Federation. The orders sought, being numbered 1 to 15 inclusive, were based on s. 140 of the Act. The orders sought in 1, 2 and 3 were directed to the validity of Rule 39(a) of the rules of the Federation and sought orders to the effect that the Geelong sub-branch be constituted a branch of the Federation while the orders sought in 4 to 11 inclusive were directed to Rules 1 and 4 of the rules of the Federation and raised the validity of the constitution of the Federal Council of the Federation. The orders sought in 12 and 13 were directed to Rules 5 and 9 of the rules of the Federation and raised the validity of the method of electing the President, Vice-president and the two Trustees of the Federation. The order sought in 14 was directed to Rule 48 (c) of the rules of the Federation and raised the validity of one part of that Rule, while the orders sought in 15 raised a general question of whether the rules of the Federation failed to make provision for the control of committees of the Federation by the members of the Federation.

It was contended further that Rule 1(b)(i), by providing that a branch secretary could not be a branch delegate to Federal Council, is contrary to s.140(1) of the Act. The term of office of a branch secretary is longer than that of a delegate and the elections may take place at different times. But this does not affect the legal position. Rule 1(b)(i) & (ii) and Rule 4(a) are complementary. There is nothing in the rules of the Federation to prevent a branch secretary being a candidate for the office of delegate to Federal Council, or likewise to prevent a delegate to Federal Council from being a candidate for the office of branch secretary. A branch secretary, by reason of being holder of that office, is a member of the Federal Council. If enabled to hold office as a delegate to Federal Council as well, the branch concerned would be deprived of its proper representation at Federal Council. If a branch secretary is elected as a branch delegate to Federal Council, or if a branch delegate to Federal Council is elected a branch secretary, that person would be required to elect which office he would thereafter hold, and in the absence of an express election the law would determine an implied election, depending on the particular facts of the case, see Egan v. Maher No. 2 (1978) 35 F.L.R. 252, per Evatt J. at p.260 and Northrop J. at p. 262-264.

Rule 5 of the Rules of the Federation is headed "Officers of Federal Council", and by Rule 5(a) the officers are stated to be the President, the Vice-president, 2 Trustees, the Federal Secretary and Assistant-Federal Secretary. Rule 5(b) provides that the President, Vice-president and Trustees shall be elected by and from members of the Council at its biennial meeting. Rule 9 is headed "Meeting of Federal Council", and Rule 9(d) contains machinery provisions for the election of the President, the Vice-president and the two Trustees. It was contended that the method of electing persons to those offices was not a direct voting system or a collegiate electoral system, as provided for in s.133(1)(a) of the Act - see also s.4 for definitions of the expressions "collegiate electoral system", "direct voting system" and "one tier collegiate system". Under the rules of the Federation, the members of the Federal Council are elected by a direct voting system, the delegates of branches and the branch secretaries by the financial members of each branch and the Federal Secretary and the Assistant-Federal Secretary by the financial members of the organization. The members of the Federal Council constitute the first subsequent stage following the direct voting system by which they were elected to Federal Council and constitute the college to elect the officers specified in Rule 5(b). This is a one tier collegiate electoral system and complies with the requirements of s.133 of the Act. The contention is rejected.

Orders based on s.140 of the Act were sought, directed to the validity of Rule 39(a) of the Rules of the Federation which provides as follows: -
"39. TERRITORY AND POWERS OF BRANCHES

(a) Subject to these Rules, the following are recognised Branches of the Federation with full autonomy within their various territories:

(i) The Victorian Branch covering the States of Victoria and Tasmania whose headquarters shall be situated at Melbourne.

(ii) The New South Wales Branch covering the State of New South Wales and the Australian Capital Territory whose headquarters shall be situated at Sydney.

(iii) The Queensland Branch covering the State of Queensland whose headquarters shall be situated at Brisbane.

(iv) The South Australian Branch covering the States of South Australia, Western Australia and the Northern Territory whose headquarters shall be situated at Adelaide."
Orders are sought to the effect that the Geelong sub-branch be constituted a branch of the Federation. At the present time members of the Geelong sub-branch are members of the Victorian branch, and, for practical purposes, enjoy all the rights and privileges of being members of the Victorian Branch. The orders sought are rejected for the reasons given by Smithers J. A few comments only are made. As said earlier, it is for an organization, subject to the requirements of the Act, to mould its own structures as it sees fit. Although for the sake of convenience or for historical reasons branches are constituted within organizations, branches are not an essential part of an organization in the sense that the Act does not require that branches be constituted within organizations. The rules of an organization which did not constitute branches would not, by that reason alone, offend s.140(1) of the Act. The Act is directed to protect the interests of members of organizations, not the establishment of branches. The reasoning expressed in McLeish v. Faure, supra, is based on that concept. Prima facie, the vote of each member of an organization should have the same value, but for various reasons, some variations in value do not thereby make invalid the rules providing for those variations. The Australian Constitution confers rights and privileges upon the States, but the Act does not confer upon branches, as branches, any rights or privileges. The rights of the members of the Geelong sub-branch to be represented on the Federal Council are satisfied by their being members of the Victorian branch. At the present time, the rules providing for equal representation and voting value on Federal Council between members of branches of the Federation operate unreasonably against members of the Federation within the Victorian branch in that the voting power of the Victorian branch's 23,000 members is the same as the voting power of the Queensland branch's 5,000 members. It is not for the Court to mould the structures of the Federation to conform to its modes of thought as to what are the desirable structures of the Federation.

The next matter based on s.140 of the Act to be considered is the attack on part of Rule 48(c) of the rules of the Federation. That paragraph provides as follows: -
"A Branch Committee of Management may submit any local question or dispute to a State Industrial Tribunal after obtaining approval for such submission from the Branch in general meeting and from the Federal Executive Committee and may appoint any person or persons to represent the Branch before such Tribunal."
The words "and from the Federal Executive Committee", it is contended, are contrary to s.140(1)(d) of the Act. That paragraph must be construed having regard to s.136A of the Act which was inserted into the Act at the same time as s.140(1)(d). Full argument was not directed to this aspect of the matter, but nevertheless the attack on Rule 48(c) is rejected. No machinery provisions have been introduced by the States which enable s.136(A) to be effective. In New South Wales, Queensland, South Australia and Western Australia neither the organization nor its branches have a right to participate in State industrial, conciliation and arbitration systems constituted within those States. For practical purposes, State registered bodies only have the right to such participation. In Victoria and Tasmania it is the organizations which legally participate in the industrial, conciliation and arbitration systems constituted therein. Under Rule 2(h) of the rules of the Federation, the Federal Council is authorized
"(h) To make any necessary approach to Federal or State Conciliation or Arbitration Courts or Commissions, Wages Boards or like bodies in respect to any Award, Determination, Agreement or industrial dispute".
The Federal Executive Committee meets more frequently than the Council, Rule 13(a), and its powers are set out in 13(b) as follows: -
"(b) Subject to these Rules the Executive Committee shall transact such business of the Federation as it thinks fit, and shall give effect to the Rules of the Federation in the best interests of its members, but shall not authorise the expenditure of the Federation's funds except on ordinary working expenses".
See also Rule 39(a) set out above which makes the powers of the branches subject to the rules of the Federation. Rule 48(c) cannot apply to require a state registered body, even if its membership is identical with that of a branch of the Federation, to obtain prior approval from the Federal Executive Committee before submitting any question or dispute, local or otherwise, to a State Industrial Tribunal. It can operate only with respect to a branch of the Federation properly so called and in circumstances where in law the Federation is the party affected by any question or dispute coming before a State Industrial Tribunal. On the contentions put, I am not satisfied that s.140(1)(d) applies to branches which do not come within s.136A of the Act. This contention is rejected.

The final matter based on s.140 of the Act remaining for consideration is the claim that the rules of the Federation contravene s.140(1)(c) of the Act in that they fail to make provision for the control of committees of the Federation by the members of the Federation, being a provision required by the Act and by the Regulations, and in particular reg. 115(1)(d)(v). This claim is rejected.

Under the Rules of the Federation, general meetings of members within a branch of the Federation, are held regularly. Delegates to Federal Council are elected every two years. Federal Council meets at least once in each year, and Special Meetings may be convened upon the written request of any two or more branches or by resolution of the Federal Executive Committee. That Committee, which comprises the President, Vice-president, two Trustees, Federal Secretary and Assistant-Federal Secretary, are held at least once every four months. In addition, under Rule 15, any two or more branches may, at special meetings convened for the purpose, demand a ballot of all members of the Federation upon any question, and the result of the ballot is binding on all members of the Federation. In all these circumstances, the rules of the Federation make provision for the control of committees of the Federation by the members of the Federation. This control will become even stronger when the rules of the Federation are altered to overcome the imbalance of representation and voting value presently existing in the Federal Council as between members of the Federation in different branches.

The other orders sought in Matter V. No. 12 of 1979, apart from the Applications under s.171D of the Act, are based upon s.141 of the Act. The basis of the claims is that, at the time the Federal Council conducted the elections to offices on the Federal Executive Committee, and passed certain resolutions, the rules of the Federation under which branch delegates had been elected to Federal Council were invalid. Orders in those circumstances are sought under s.141 of the Act that the Court should give directions under s.141 (1G) of the Act that the respondents to the rule nisi, being persons who are under an obligation to perform or observe the rules of the Federation, should treat as null and void and of no effect those elections and specified resolutions which were challenged. Not all resolutions passed at that meeting of Federal Council are being challenged and unless and until orders are made under s.141 of the Act, those unchallenged resolutions can be acted upon. Any directions given are binding upon the respondents to the rule nisi only, and in themselves do not operate to make a rule of the Federation void, see R v. Judges of the Commonwealth Industrial Court ex parte Amalgamated Engineering Union (1960) 103 C.L.R. 368, R. v. Australian Industrial Court ex parte Maynes, supra, Alan v. Townsend, supra and Egan v. Maher No. 1, supra.

At the March 1979 Federal Council Meeting, D. Foreman, C. Burge, C. Jarrad and W. Allamby were elected President, Vice-president, Trustee and Trustee respectively. For reasons already given, at the time of that election, and at the time the members of Federal Council, being branch delegates, were elected to office, the relevant rules of the Federation making provision for the Federal Council were contrary to the provisions of the Act. Accordingly the elections of those persons to the Federal Executive Committee were invalid and in Matter V. No. 12 of 1979 an order should be made giving directions that the respondents (other than the Federation) and each of them, treat as null and void and of no legal effect, the purported election of D. Foreman, C. Burge, C. Jarrad and W. Allamby to the office of President, Vice-president, Trustee and Trustee respectively.

For the same reasons, the directions sought with respect to specified resolutions passed at the same meeting of Federal Council, will be given. The resolutions challenged relate to purported alterations to the rules of the Federation and the administration, staffing and use of funds of the Federation, and are specified in the Order made in this matter.

Before considering the applications made under s. 171 C and 171 D of the Act, it is desirable to determine the issues raised in Matter N.S.W. No. 31 of 1979. Following adjournment of the hearing of the proceedings on 22 June 1979, the Federal Executive Committee initiated procedures for the calling of a special meeting of the Federal Council of the Federation for the purpose of altering the rules of the Federation. Having regard to the provisions of the rules of the Federation regulating the method by which its rules may be altered, it is extremely doubtful if the Federal Council has power to alter rules at a special meeting, see Rule 2(b), Rule 9, Rule 10 and Rule 50 of the rules and in particular the different periods of time referred to in Rule 10(a) and Rule 50(a) and (b). A special meeting was convened for August 1979, but the notice of meeting given to the N.S.W. branch secretary did not comply with the requirements of Rule 50(a), and the procedures thereafter provided for were not complied with by the N.S.W. branch secretary. It is not necessary to express any final opinion on the matters just mentioned.

The special meeting of Federal Council was held at Melbourne on 15, 17 and 18 August 1979. The branch delegates at that meeting had been elected pursuant to Rules 1 and 4 of the rules of the Federation, and for reasons already given, at a time when part of those rules were contrary to the provisions of the Act. Thus for reasons already given, it is appropriate that Orders be made giving directions that the respondents to Matter N.S.W. No. 31 of 1979 observe and perform the rules of the Federation by treating as null and void and of no effect the resolutions passed at those special meetings. In the same matter the claimants seek directions with respect to all resolutions passed at the meetings of the Federal Executive Committee held in connection with those special meetings of Federal Council. The Claimant is entitled to those directions and orders are made accordingly.

There remains to be considered the applications under s. 171C and s.171D of the Act. These applications are made by various parties in each of matters V. No. 12 of 1979, N.S.W. No. 26 of 1979 and N.S.W. No. 31 of 1979. The applications under s.171C are considered first. In substance, those applications are based on the fact that irregularities have occurred with respect to the Federal Council and the Federal Executive Committee of the Federation, being the invalidities already discussed, and that the Court, in the exercise of the discretion conferred by s.171C (2) (a) of the Act should validate the resolutions of the Federal Council altering the rules of the Federation and passed at the meetings of the Federal Council in August 1979 and subsequently at a meeting held on 10 September 1979. The rule alterations extended further than alterations to the constitution of the Federal Council.

The applications under s.171C should be refused. The constitution of the Federal Council is a matter of keen debate within the Federation. The other rule alterations effected likewise concern matters of keen debate within the Federation. The procedures for the calling of the meetings were commenced at a time when there had been a substantial part hearing of matters V. No. 12 of 1979 and V. No. 17 of 1979, and it was apparent that there was great substance in the claim that the rules constituting the Federal Council were invalid. Nevertheless, without seeking any interim orders from the Court and during the adjournment of the hearing of the proceedings, procedures were commenced to enable the very same Federal Council to make rule alterations of a controversial nature. Matter N.S.W. No. 31 of 1979 was commenced before the August meetings. Despite the refusal of the Court constituted by a single Judge to make interim orders staying the holding of those meetings, it should have been abundantly clear that, apart from the invalidity of the rules constituting a Federal Council, the procedures required for the calling of the meetings had not been followed. Nevertheless, the August meetings were held, and in an attempt to overcome some of the invalidities affecting those meetings, a further meeting was convened for 10 September 1979. The unfairness of the actions taken is highlighted by the amazing fact that unless a member of the Federal Council or Federal Executive Committee attends a meeting, he does not receive a copy of the minutes of that meeting - a procedure that seems completely unjust and unreasonable. In all these circumstances, the Court should not exercise its discretion and make orders under s.171C of the Act.

The applications under s.171D call for different considerations. Apart from the attack on the Victorian branch of the Federation contained in the application being Matter N.S.W. No. 26 of 1979, applications under s.171D were directed to the Federal Council, the Federal Executive Committee and the offices of the President, Vice-president and the two Trustees of the Federation. For the reasons already given, the Court should declare under s.171D that two collective bodies as defined in 171A of the Act, namely the Federal Council and the Federal Executive Committee of the Federation, have ceased to exist or to function effectively and that there are no effective means under the rules of the Federation to enable either to be reconstituted or enabled to function effectively, and that offices in the Federation, being the offices of President, Vice-president and two Trustees respectively, are vacant, and there are no effective means under the rules of the Federation to fill any of those offices. In fact no party before the Court seriously argued that such a declaration should not be made. The debate between the parties was to what scheme should be approved under s.171D(2) of the Act. Various schemes were presented by differing parties. One scheme was based on the assumption that the Geelong sub-branch be constituted a branch of the Federation. For reasons already given, a scheme based on that assumption cannot be approved. Other schemes were presented and disputed. Some were based on a greater equality of representation of branches on Federal Council, depending on the number of members in each branch. Others were based on a voting structure giving greater equality of votes based upon the number of members in each branch, the voting values to be exercised by the existing branch representatives and the Federal Secretary and Assistant-Federal Secretary. No scheme suggested that the members of Federal Council should be elected by all financial members of the Federation in a manner similar to that adopted with respect to the Federal Secretary, and the Assistant-Federal Secretary. No party argued that either of the two major schemes presented was contrary to the provisions of the Act. In these circumstances, it would be unwise for the Court to express its preference between competing schemes: to do so would be to impose its modes of thought to mould the structures of the Federation. As has been said earlier in these reasons, subject to complying with the requirements of the Act, it is for the Federation to determine its own structures.

Accordingly the Court proposes to approve none of the schemes presented by the parties, but to approve a scheme which will enable the Federation itself to determine the structure of its Federal Council.

The jurisdiction conferred by s.171D(2) must extend to the Court having power to approve a scheme which is different from any schemes presented to it by the parties appearing before the Court. Under that sub-section, the Court has jurisdiction to approve a scheme for the taking of action by a collective body of the Federation or by an officer of the Federation for the reconstruction of a collective body or to enable it to function effectively or for the filling of offices. The Court is satisfied as to compliance with the requirements of s.171D(3), and notice has been given by way of advertisement under s.171D(6). Under 171D(4) the Court has jurisdiction to give such ancillary or consequential directions as it thinks fit, while s.171D(5) gives added effectiveness to any order or direction made by the Court.

The essential feature of the scheme to be approved is to enable the Federal Council to be constituted in compliance with the rules and to come into existence as speedily as possible. Once that reconstituted Federal Council is in existence and able to function, it can elect validly persons to the offices of President, Vice-president and two Trustees respectively, thereby filling those offices and at the same time validly constituting the Federal Executive Committee. Thereafter, the reconstituted Federal Council can consider, and if thought desirable, alter any of the rules of the Federation including the constitution of the Federal Council, provided that the requirements of the rules as to the alteration of rules are followed.

Under s.171D(2), the required action can be taken by a collective body of the Federation. The Federal Council is such a collective body. The rules constituting the Federal Council have not been made the subject of an order declaring that the whole or part of a rule or rules of the Federation contravene s.140(1) of the Act, see s.140(5D) and s.141(8A) of the Act. Accordingly there is nothing in existence upon which s.140(5G) can operate. The Federal Council remains a collective body within s.171D(2) of the Act, despite the declaration made under s.171D(1). In any event, the combined effect of the powers conferred by s.171D(4) & (5) enables the Court to give directions to treat the Federal Council as a collective body of the Federation, and if necessary the Court should give such directions. Likewise, the position is similar with respect to the Federal Executive Committee and the offices affected.

Accordingly, the Court approves a scheme to enable the Federal Council and the Federal Executive Committee of the Federation to continue to function on an interim basis and for the persons presently purporting to hold the offices of President, Vice-president and Trustee respectively, to continue to hold those offices on an interim basis. Until the Federal Council is reconstituted and complies with the requirements of the Act, the Federal Council is not to exercise its power of altering the rules of the Federation, except in compliance with the scheme approved by the Court. After being reconstituted, the Federal Council will be in a position to exercise its powers in full in compliance with the rules of the Federation. The scheme approved provides for a meeting of Federal Council, as presently constituted, to resolve upon the appropriate rules for the reconstruction of the Federal Council. The rules of the Federation, insofar as they lay down a procedure to be followed with respect to an alteration of rules, need not be followed. The only rules to be altered under the scheme are Rules 1 and 4. A timetable is laid down in the scheme and must be followed. If not complied with, the Industrial Registrar will be in a position to exercise the powers conferred by s.140(7) of the Act.

On the material placed before the Court, I am not prepared to make a declaration with respect to the Victorian branch of the Federation.

Orders accordingly.

[1980] FCA 44

03 APRIL 1980