Shrubb, David George v Air Pilots Guild of Australia

[1979] FCA 77

SHRUBB v. AIR PILOTS' GUILD OF AUSTRALIA (1979) 40 FLR 374
Conciliation and Arbitration

COURT

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL DIVISION
J.B. Sweeney(1), Evatt(1) and Northrop(1) JJ.

CATCHWORDS

Conciliation and Arbitration - Registered organizations - Cancellation of registration - Interest of applicant for cancellation - Alleged erroneous registration of organization - Wilful neglect by organization to provide for collection of subscriptions - Failure of organization to observe rules - Justice of order - Conciliation and Arbitration Act 1904 (Cth.), ss. 88z, 132 (1) (b), 143 (1) (a), (c), (e), (2) - Conciliation and Arbitration Regulations, reg. 115 (1) (d) (xii).

HEADNOTE

The applicant, an airline pilot and the president of the Australian Federation of Air Pilots (the federation), a body to which s. 88z of the Conciliation and Arbitration Act 1904 (the Act) applied, made application for the cancellation of the registration of the respondent guild, a registered organization under the Act. There was considerable overlap in the membership rules between the guild and the federation. The application was made on three grounds: (1) the guild was registered erroneously or by mistake in that, at the time of its registration, it was not an association the members of which included not less than 100 employees in or in connexion with an industry; (2) the proper authority of the respondent had wilfully neglected to provide for the levying and collection of subscriptions, fees or penalties from its members; (3) the rules of the guild in so far as they provided for the keeping of a register of members had not been observed.

The application was made under s. 143 of the Act which in relevant parts provided:

"143 (1) Any organization or person interested, or the Registrar, may apply

to the Court for an order directing the cancellation of the registration of an

organization on the ground that -

(a) the organization has been registered erroneously or by mistake; . . .

(c) the rules of the organization, in so far as they provide for a matter in

accordance with the prescribed conditions, have not been observed; . . .

(e) the proper authority of the organization has wilfully neglected to provide

for the levying and collection of subscriptions, fees or penalties from members

of the organization."

Rule 18 (a) (viii) of the guild's rules in compliance with s. 132 of the Act and reg. 115 (1) (d) (xii) of the Conciliation and Arbitration Regulations required the keeping of a register of the names, addresses and qualifications of all members of the association arranged according to branches.

Held: (1) The applicant was a person interested within the meaning of s. 143 (1) of the Act as in his daily occupation he might be vitally affected by the activities of the guild, and each of the members of the federation of which he was president might be similarly affected.

Metropolitan Coal Co. of Sydney Ltd. v. Australian Coal and Shale Employees' Federation (1917), 24 CLR 85, applied.

(2) The second ground relied upon by the applicant under s. 143 (1) (e) of the Act had been established as: (a) soon after registration the guild had amended its rules removing all disabilities to which unfinancial members were liable; (b) there had been no attempt either by action by the officers or by the council of the guild or otherwise to collect subscriptions nor had provision been made for such collection; (c) the neglect to provide for the levying and collection of subscriptions, fees or penalties had been wilful within the meaning of s. 143 (1) (e) of the Act as it was a deliberate and intentional act.

(3) The third ground relied upon by the applicant under s. 143 (1) (c) of the Act had been established as there was no register, as defined in r. 18 (a) (viii), maintained.

(4) It was not necessary in the absence of full argument to decide whether the first ground had been established.

Quaere whether the court under s. 143 (1) (a) of the Act could, perhaps many years later, review a decision of the Industrial Registrar or on appeal, of the Conciliation and Arbitration Commission, to register an organization.

(5) It was appropriate in this case to order the cancellation of the registration of the guild under s. 143 (2) of the Act as: (a) the guild had not sought an adjournment; (b) the grounds established were longstanding ones which the guild had taken no action to rectify; (c) no injustice would be caused to the guild or any member thereof.

HEARING

Sydney, 1979, July 23-25; August 9. #DATE 9:8:1979

RULE NISI.

The facts appear in the judgment.

C. N. Jessup, for the applicant.

F. Stevens, for the respondent.

Cur. adv. vult.

Solicitors for the applicant: Mahonys.

T. J. GINNANE

JUDGE1

August 9.

THE COURT delivered the following written judgment.

This is an application by Mr. David George Shrubb for the deregistration of the Air Pilots' Guild of Australia (the guild). The applicant is an airline pilot and is also president of the Australian Federation of Air Pilots (the federation). (at p375)

1. It is necessary to set out very briefly the prior history of the two bodies. Some time in about 1960 air pilots formed a new association, now the federation. There had been an organization registered under the Act under the title of the Australian Air Pilots' Association but it appears to have become defunct and deregistered. Thereafter there were some arbitral proceedings between airline operators and air pilots and eventually the Conciliation and Arbitration Act 1904 was amended in 1967 to insert Pt IIIA dealing with the Flight Crew Officers Industrial Tribunal. Under this Part, provision was made for the establishment of such a tribunal and its powers. It was given jurisdiction to deal with industrial questions relating to what may be termed air crew officers including pilots. Provision was also made in the Part for the Minister to declare an association, not being an organization, but which exists or is carried on for the purpose of furthering the interest in relation to industrial matters of flight crew officers who are members of the body, to be a body to which s. 88z of the Act applied. The effect of the declaration was that certain sections of the Act had effect as if the declared body were an organization and the body, whether incorporated or not, was capable of being a party to proceedings before the Tribunal. (at p376)

2. Provision was made for conciliation committees including members nominated by flight crew officers and for any award made under the Act to be binding on certain persons and classes of persons. The Tribunal has continued to function and has made a number of awards covering air crew officers including pilots. (at p376)

3. After the amendment, the federation was declared a body to whom the relevant provisions applied. In the years since then, the federation has obtained awards and agreements and has otherwise protected the industrial interests of pilots and others. (at p376)

4. The guild was formed in 1969. An application for registration was first made on 3rd February, 1969, but this was later withdrawn. A further application was made on 23rd June, 1969. Objections to the registration were lodged by two senior officers of the federation and by the Transport Workers' Union of Australia. The last-mentioned objection was withdrawn but the other two after a hearing were disallowed and the guild was registered as an organization. An appeal was brought against the registration but was dismissed. The constitution rule of the federation, generally speaking, covers persons employed as pilots, flight engineers or flight navigators in commercial aviation who hold certain technical qualifications. The constitution rule of the guild provides that it shall consist of persons employed as pilots in the industry of commercial aviation who hold what appear to be like qualifications. There is, then, clearly a considerable overlap in the two membership rules. (at p376)

5. The grounds upon which deregistration is sought are as follows: 1. the guild was registered erroneously or by mistake in that, at its registration, it was not an association the members of which included not less than 100 employees in or in connexion with any industry (ss. 143 (1) (a); 132 (1) (b) at 3rd February, 1970). 2. the proper authority of the guild has wilfully neglected to provide for the levying and collection of subscriptions, fees or penalties from members of the guild (s. 143 (1) (e)). 3. the rules of the guild in so far as they provide for the keeping of a register of members have not been observed (s. 143 (1) (c); reg. 115 (1) (d) (xii); guild r. 18 (a) (8)). (at p376)

6. The first question raised was whether the applicant was a person interested within the meaning of s. 143 of the Act. That section provides that any organization or person interested, the Minister or the Bureau may apply to the court for an order directing the cancellation of registration of an organization on certain grounds there set out. As we have said, Mr. Shrubb holds the office of president of the federation and is himself employed as a senior jet pilot by Qantas Airways Ltd. He has been so employed for some considerable time and it is clear that his career is that of pilot in the aviation industry. In his daily occupation he may be vitally affected by the activities of the guild. As an organization covering the field it does, it could secure an award which would bind him whether a member of the guild or not, and so directly affect his remuneration and conditions of employment. This could go to questions of preference, promotion and other like matters. He is, as we have said, also president of the federation. It has some 2,500 members, 1,900 of whom are employed by what are known as Australian airline operators, that is to say, the airlines which carry persons for reward such as Qantas, T.A.A., Ansett Airways and the like, and the balance of whom are employed as pilots in various flying schools, flying charter flights and in other similar fields. Each of these members may be affected as a pilot in the same manner as Captain Shrubb himself. (at p377)

7. The guild and the federation are rival bodies, each seeking to enrol and retain members. The term "person interested" has been held to be one which should not be narrowly construed: Metropolitan Coal Co. of Sydney Ltd. v. Australian Coal and Shale Employees' Federation (1917) 24 CLR 85, at p 92 , and the interest to be looked for is an interest in the industrial sense: per Isaacs and Rich JJ. (1917) 24 CLR, at p 75 . In our view the applicant is clearly a person interested. (at p377)

8. The first ground put to us, that the guild was registered erroneously or by mistake is put on two bases. In the first place that the guild was not at the time of its registration an association, and secondly that at that time it did not have 100 members. It is claimed that if in these circumstances the registration took place, it had been registered erroneously or by mistake. We have found considerable difficulty with this ground. It is to be noted that the question of registration is an administrative act committed to the Industrial Registrar. An appeal lies from him in such a case to the Commonwealth Conciliation and Arbitration Commission. It would in those circumstances seem odd that this Court should be able to review the decision of the Industrial Registrar, perhaps made many years before, to determine whether he fell into error or registered by mistake and it would appear that if the matter, as this one did, went on appeal to the Commission this Court could also review the decision of the member of the Commission who sat on the appeal and determine whether he for his part had registered erroneously or by mistake. The difficulties are added to when consideration is given to the terms of s. 132 (3) that: "Upon registration, the association shall become and be an organization" and the terms of s. 135 that: "The Registrar shall issue to each organization registered under this Act a certificate of registration in the prescribed form, which certificate shall until proof of cancellation be conclusive evidence of the registration of the organization therein mentioned and that it has complied with the prescribed conditions to entitle it to be registered." (at p378)

9. There is authority on the effect of s. 135 in Federated EngineDrivers' and Firemen's Association of Australasia v. Broken Hill Pty. Co. Ltd. (1911) 12 CLR 398 but in that case the provisions corresponding to s. 132 (3) were not referred to. That case was considered by the High Court of Australia in R. v. Clarkson; Ex parte Victorian Employers' Federation (1973) 131 CLR 100 . (at p378)

10. It is then a question not free of difficulty and in this case while we have had argument on the point by counsel for the claimant, there was slight reference only to it on behalf of the respondent. In view of the conclusion we have reached, we thought it preferable not to pronounce on this ground until the matter has been fully argued. (at p378)

11. The second ground argued before us is that the proper authority of the guild has wilfully neglected to provide for the levying and collection of subscriptions, fees or penalties from members of the guild. In its rules at the time of registration the guild provided for an annual subscription of .5 per cent of the minimum guaranteed yearly salary or its equivalent. Special provision was made for members elected between 1st July and 31st October each year and for members elected after the first day of November each year. The annual subscription was payable by a new member on lodgment of his application for membership and annual subscriptions were payable to the secretary of the association. Provision was made that applicants for membership of the guild prior to its registration need not make this payment, but upon registration the subscriptions not previously paid became immediately due and payable. Unfinancial members were those in arrears for subscriptions etc. for a period exceeding three months from the date on which they became due. An unfinancial member was not entitled to take part in the association's business nor to claim any of the benefits or privileges of membership until his debt was paid. There was also power to impose a fine where a member was unfinancial and failed to pay the debt after fourteen days' notice. Provision was also made for unfinancial members to be sued for the recovery of the debt and there was a provision that a member failing to pay subscriptions for a period of six months was liable to be struck off the roll of membership but remained liable for any moneys unpaid. Unfinancial members were also unable to take part whether as candidate or voter in any elections. (at p378)

12. In 1971, some few months after registration, the rules were amended by removing many of the provisions against unfinancial members and again in September 1973 they were amended by removing the remaining disabilities to which unfinancial members were liable. The subscriptions and entrance fees were altered at the same time, the subscription after 1973 apparently becoming $20 per annum in the case of general pilots and $100 per annum in the case of airline pilots. (at p379)

13. The general secretary was the officer to sue or be sued on behalf of the guild and its federal council would appear to be the body having general power of management of the guild. Notwithstanding the rules, it appears that almost from the beginning of the guild's history no real attempt has been made to collect or to set up any appropriate machinery for the collection of subscriptions or other moneys due to the association. Mr. Harrington, apparently one of the earliest members of the guild and at present still employed as an airline pilot, was the first vice-president. He made an affidavit filed in this matter and in it said that financial statements were presented to the federal council by Mr. Cameron who was then and still is the president of the guild. He said that no one office bearer of the guild was assigned to collect subscriptions. Mr. Harrington said it was obvious from the financial statements that subscriptions were not being paid and that after the guild's first year of operation he raised for the first time the matter of unpaid subscriptions and raised it again on two or three subsequent occasions. He pressed for collection of subscriptions and the issue of summonses if this step was necessary. Mr. Cameron, he said, opposed his proposals and said: "If pressure was applied for payment of subscriptions a large number of members would resign." Mr. Cameron would not allow him to send out reminder notices or demands for payment and his, Mr. Harrington's, proposals were not supported by any other office bearer. He held office until February or March 1973 and said: "No real effort was made to collect subscriptions during the time I was an office bearer of the guild." He said further that Mr. Cameron expressed the fear that the guild would be deregistered if it had less than 100 members and the rules were changed for the explicit purpose of allowing unfinancial members to remain members and retain voting rights. Mr. Harrington was required to attend for cross-examination but this request was withdrawn and Mr. Harrington was not subject to any cross-examination. (at p379)

14. In the circumstances we have no hesitation in accepting Mr. Harrington's account of the early years of the guild as true. (at p379)

15. Evidence was also given by a Mr. Rees who described himself as a representative of the New South Wales branch on the federal council of the guild. Mr. Rees was called by the respondent. He said he had never seen a list of members whether financial or not and agreed that the guild had not taken any legal proceedings for the recovery of subscriptions. The reason for this he said was: "It is extremely difficult in this industry to keep track of people and pilots. They're a very fluid group." This was not borne out by documents later put before us showing that the Department of Transport issues annually lists of persons holding various forms of pilot's licences and giving their addresses. He said he did not recall action ever having been taken by the council under its power to purge the register of its unfinancial members. He said he had no idea what percentage of members had not paid dues and that the only action of which he knew which had been taken was contained in circulars which were despatched to members and asked them to endeavour to enrol new members. This, he said, was inferentially a request for payment of subscriptions owing by that member. Mr. Cameron, the president of the guild from its foundation, said that finances were always one of the matters which were discussed at meetings of the guild and that it was usually then decided that members would be circularized to pay outstanding fees. He said that no legal proceedings had ever been taken because: "We believe in the general aviation field the general aviation pilot is very poorly off" and he said that other members of the executive were all of the same opinion that for those reasons it would not be justified in bringing legal action. He said that two or three names were purged from the register each meeting of the federal council which took place once each year. (at p380)

16. We prefer however to accept Mr. Rees' evidence and we are satisfied that nothing has been attempted by way of collection of subscriptions except the occasional indirect references in circulars. Certainly there has been a spectacular lack of success. It appeared from a cash book, which seemed the only form of accounting, that the total income of the guild has been as follows:
    
    

Year ending Total income Interest

$ $

31st December, 1976 968.72 39.42

31st December, 1977 768.43 32.43

31st December, 1978 704.95 32.91 (at p380)

1. When one takes into account that of those amounts of income Mr. Cameron as an airline pilot contributes $100 each year, it is clear that there is no real collection of subscriptions from members. For the same three years it appears that payments made by members were as follows: Year ending 1976 - by thirty-nine members; Year ending 1977 - by thirty-two members, and Year ending 1978 - by twenty-two members. (at p380)

2. It also appeared during cross-examination that there were about twelve members employed as airline pilots. It was further shown that never at any time had payments been made by more than one-third of the members in any one year but no records were kept of the amounts owing by members. (at p380)

3. We are satisfied that there has been no attempt either by action by the officers or by council or otherwise to collect subscriptions and we are further satisfied that the real reason for this is Mr. Cameron's fear that if persons who had joined up were asked to pay subscriptions they would immediately resign and he would be left with less than 100 members. (at p381)

4. Payment of subscriptions is, we think, quite fundamental to the existence of an organization. An organization's prime function is to be representative of and to represent its members and it cannot do this if it has virtually no funds. It then is just not a viable organization and as we discuss later, the industrial record of the guild is an unfortunate reflection of this. The ground in the Act does not require that organizations successfully collect all dues but it does require that provision be made for collection. There are hosts of such provisions: the appointment of collectors; arrangements with employers; the appointment of local officers and payment of commissions and the like but this is a case where there has been no effort at all reflected, as we have said, in the fact that although there is still a claim that the guild has 100 members its annual income has dropped to $670, $100 of which comes from one member. We are of the view that this ground has been established. (at p381)

5. We are quite satisfied that the neglect to provide for the levying and collection of subscriptions, fees or penalties has been wilful. The word "wilfully" as used in the section seems to us to involve no more than that it was a deliberate and intentional act and of this there can be no doubt. (at p381)

6. The third ground is that the rules of the guild in so far as they provide for the keeping of a register of members have not been observed. Section 132 and reg. 115 (1) (d) (xii) make it necessary for an organization to provide in its rules for the keeping of a register of members arranged, where there are branches of the association and the register is kept at the office of the association, according to branches. There appears to be a New South Wales branch and it appears that whatever register there is, is kept at the office of the association. (at p381)

7. The relevant rule is r. 18 (a) (viii) which requires the keeping of a register of the names, addresses and qualifications of all members of the association arranged according to branches. From the evidence it appears that the relevant records kept by the association were firstly a card index which was said to be an aide memoire for Mr. Cameron and which was said by Dr. Stevens appearing on behalf of the guild not to be its register. (at p381)

8. Secondly there was a cash book which contained so far as is relevant the names of members who paid subscriptions during a year and the amounts of such payment. Since only a very small proportion of members' names appear in any one year, this clearly was not a register. (at p381)

9. The third was a list of members prepared for the returning officer and forwarded each year to the Industrial Registrar together with a request that elections be conducted by either the Registrar or a Commonwealth electoral officer. This was said to be prepared in each year from the list forwarded the previous year with additions to and subtractions from it taken from entries in the minutes of the federal council meeting. It did not contain particulars of the qualifications of members and no attempt was made to keep the addresses up to date. Lists for the years 1970, 1971 and 1972 were produced from the files of the Industrial Registrar and lists for the years 1977 and 1978 were produced by the guild. No explanation was given for the failure to produce lists for the intermediate years. These lists again did not contain the qualifications of members nor did they have any up to date addresses. In cross-examination a comparison of certain names with those appearing in a list of pilots to whom licences had been issued together with their addresses established that the addresses shown in the list were in many cases quite inaccurate. On the evidence there was no attempt to keep the addresses of members up to date. (at p382)

10. In our view none of these amount to a register within the meaning of the rules. A register may take many forms, a card index, a book, or material used where accounts have been computerized, but there is no way in which the card index, the cash book or the lists prepared for election purposes can be so dignified. We might add that Mr. Rees, the New South Wales representative on the council, claimed to have no knowledge of these records or of any register of any members. (at p382)

11. We are then in the position that the second and third grounds relied on have in our view been made out. (at p382)

12. The question then is what action is appropriate under s. 143 (2). No adjournment for any period was asked for and having found two grounds of the application have been established we must consider the matters raised in par. (b) of that subsection. Part of it may be disposed of immediately in that there has been no action taken by the guild in relation to those matters. Moreover, although the grounds have been known to the guild since some time in April, the guild has not chosen to put before us any resolution of one of its controlling bodies or anything to indicate that it is aware of any need for a change in these matters. Would then an order directing the Registrar to cancel the registration of the guild be unjust? In our view, considering the whole of the circumstances of the guild it would not. (at p382)

13. The two matters to which we have drawn attention have existed since the registration of the guild in 1970. We think no injustice would be involved to the guild considered as an organization in directing the cancellation of its registration nor in our view would any injustice to members of the guild be involved. It is clear that it exists as a mere shell of an organization It has some twenty-two members contributing to its funds, a mere handful of persons employed in the industry and far fewer than the number of members required to gain registration. It may have about 120 other members whose membership appears to be merely nominal. No elections in the guild have ever been contested and it seems that participation by members is purely nominal. The awards in the industry seem to have been obtained by action by the federation before the Tribunal and those awards appear to bind all pilots, whether members of the federation or not. Indeed, one curious feature of the case is that Mr. Cameron himself is what is termed an "agency client" of the federation. An "agency client" is a pilot etc. with conscientious objection to full membership of the federation who makes application and is so classified. He is required to pay an annual subscription equivalent to that paid by a full member. The rules provide that he shall be represented by the federation in contract negotiations with his employing company and is entitled to provident fund cover and legal representation and assistance in the case of an aircraft accident or incident. He cannot, however, vote or attend meetings or hold office. No injustice then would be done to members of the guild. So far as employers of pilots are concerned, the guild complains that employers will not negotiate with it and on the material contained in Mr. Cameron's affidavit they have sought the adjournment of hearings of disputes until this present application is dealt with. There is no reason to think that they will be in any way adversely affected by this decision. (at p383)

14. In the case of the federation, since it supports the application, it is not necessary to consider the question of justice in relation to it. (at p383)

15. The guild has had the advantage of being a registered organization for approximately ten years. It is an affiliate of the Australian Council of Trade Unions and of the New South Wales Trades and Labour Council. With all those advantages it has enrolled but a handful of members and that number is dwindling. In our view it has not sought to establish itself or to be active or to be truly representative of the employees of the class it seeks to cover. It claims to be a party to two awards only, one of which was obtained on the application and through the negotiation conducted by the federation and the other of which is an award termed a "roping-in" award by which the guild was made a party to an award which had already been obtained by the federation. It should be added that the Australian Council of Trade Unions and the New South Wales Labour Council sought leave to intervene in the proceedings. During the course of that application it was said that it was feared that if it was possible for an unregistered organization to be set up in direct competition to a registered organization there could be some inducement for some people at some future time to set up a body specifically to subvert a registered organization. Mr. McArdle who made the application agreed that this was not this case. The court refused the application. (at p384)

16. We are satisfied that the proper order to make in these proceedings is that the court direct the Registrar to cancel the registration of the Air Pilots' Guild of Australia and we so order. (at p384)

ORDER

The court directs the Industrial Registrar to cancel the registration of the Air Pilots' Guild of Australia.