Troja, F. v Bird, A

CATCHWORDS

Industrial law - registered

organization

performance

and

observance of rules - whether imposition of levy valid - meanlng of "striking" a levy - meaning of "half-yearly'' - whether implied term can arise in rules.

Conciliation and Arbitratlon Act 1904, S. 141, S. 139.

Gordon v. Carroll (1975) 27 F.L.R. 129

Duqmore V. Porter (1982) 3 I.R. 418

Porter V. Duqmore (1984) 3 F.C.R. 396

Scott v. Jess (1984) 3

F.C.R. 263

F. TROJA v. A. BIRD & ORS.

GRAY S.

MELBOURNE

ZOTH DECEMBER 1985.

B E T W E E N :

T R O J A

Applicant

AND

Respondents

MINUTE OF ORDER

JUDGE

MAKING

ORDER:

GRAY

GATE OF ORDER:

2OTH

DECEMBER

1985

WHERE W E :

MELBOURNE

THE

COURT

ORDERS

that the Rule to Show Cause

is dlscharged.

Note:

Set%lement and entry or

orders 1 s dealt with by drder

Of the Federal Court R u l e s .

IN THE FEDERAL COURT OF AUSTRALIA )

VICTORIA	D STRICT	REGISTRY	)	No. V5 of 1985
)

DIVISION

INDUSTRIAL

)

B E T W E E N :

F. TROJA

Applicant

AND

A. BIRD, J. BRUNT, W. CURRAN,

McPIKE, L. STANLEY, R.

DILLON, L

McDONALD, W. CHRISTENSEN,

McDONALD, J . BONELLO, G. GARDINER,

Respondents

JUDGE:

GRAY J.

2OTH DECEMBER

1985

REASONS FOR JUDGMENT

On 23rd April 1985, a Rule to Show Cause was granted on

the application of the Applicant, seeking orders pursuant to

S .

141 of the Conciliation and Arbitration Act

1904 ("the Act").

The Applicant is

a member of the Australasian Meat Industry

Employees Union ("the Union").

The Union is an organlzation of

- 2 -

employees, reglstered pursuant to the Act.

The Respondents (save

for the Respondent McPike, who has died

smce the Rule to Show

Cause was granted) are all members of the Union, and constitute the committee of management of the Victorlan Branch of the Union.

Prior to 22nd May 1984, the committee of management

the Victorian Branch had fixed the amount

contrlbutions

$50.00 per half-year, that being the maximum permissible under

6(1) of the rules

of the Union, as

it then stood.

On 2Znd May

1984, the committee

management resolved in the following

terms, "that the Union ticket be increased by way	of a levy of
$5.00 per half -year".

In a newsletter dated 4th June 1984, the following item

appeared

"UNION DUES - NOW $55.00

The Union has had to increase the Union

dues by $5.00

per six months, making the ticket

$55.00 for adults per

six months, and

$27.50 per six months

for those

employed as other than

an adult.

In making this decision, the Committee

of Management

took into account the decline in membership

- from

10,000 in January 1983, to a possible 7,000 in June

1984, and the need to be

able to protect conditions and

our members in the present downturn, as it is often the employers' view that the time to attack our members'

conditions is when

a decline is being witnessed."

In a further newsletter dated 13th June

1984, a further item

appeared.

In part, thls read:

"UNION DUES NOW $55 .00

At its meeting

on May 22nd., the Committee

Management discussed the decline in the industry and the consequent fall I n membership, and resolved that it

would be necessary to increase the

Union dues, by levy,

to $55.00 per half year, as from July 1st. If this was

not done, then we would see the small accumulatlon that

the Executive and Committee

of Management have been

able to build up would be lost and the Union could flnd

itself in the red. The Committee of Management was

aware of the recent increases enjoyed

by members, and

the future increases that had been obtained, and they decided that, as far as the C.O.M. was concerned, now was the time to Increase the dues."

Some further explanation

of the financial situatlon of the Branch

then appeared, and the resolution

was quoted in the newsletter.

There is no

evidence as to the authorship of either article

the newsletter, except to the extent that the names

of the Branch

Secretary and Assistant Secretary appeared in the letterhead of

the newsletter in each case. Certainly there is

no evidence

any express approval by	the branch committee of management of the
text of either item.

The Applicant paid the sum of $55.00 to the Union, and

received a ticket

dated

28th J u l y 1984.

This ticket

was

expressed to be in respect of the period "July to December

1984".

It contained the statement that the ticket had been issued to the Applicant "On receipt of the sum of fifty-five dollars (full) for contributions and levies conditionally that all contributions,

fines and levies

due have been paid."

The words "twenty-seven

dollars and fifty cents (half)" had been crossed out

on the face

of the ticket. Subsequently, the Applicant

paid a further sum of

$55.00, and received another ticket dated

24th January

1985,

expressed as being in respect

of the period "January

to June

1985". This ticket was in the same form

as the earlier one, with

the exception that the words "twenty-seven dollars and fifty

cents

(half)"

were

not

crossed

out. In each case, the

.*	* J	- p
I

- 4 -

Appllcant's

affldavit

contains

the allegation that he was

"required" to

pay the sum of $55.00

for the relevant half-year.

The Appllcant contends that the resolution of 22nd May

1984 was not made

in accordance wlth the rules of the Union,

and

is void and

of no legal effect.

He seeks an order that the

Respondents perform and observe the rules

the

Union by

treating as null and void the resolution of 22nd May

1984, and by

taking all reasonable steps to refund to members and former

members monles paid by them, which they would not have paid had

the resolution not been adopted and implemented.

It is

worth

noting that the llmit

on the rate of contributions,

which appears

in rule 6(1) of the rules

of the Union, has been amended to a

higher level, and that the resolution

of 22nd May 1984 has been

repealed. That resolution operated only with respect to two

half-yearly periods, being the second half	o	1984 and the first
half of 1985.

It is necessary to examine the rules

of the Union. Rule

2 contains the objects	of the Union; attention was drawn	to
three of those objects:

To uphold the rights

of organisation of labour

and to improve, protect and foster the best interest of its members, and to subscribe to andfor co-operate with a policy of improving the

cultural and living standards

of its members.

To establish a fund for mutual assistance and

support in carrying out the foregolng objects.

To raise funds by levy for the attainment	of the
objects of the Unlon as set out herein."

- 5 -

As at 22nd May

1984, rule 6(1) provided as follows:

"(1)

A sun In payment of contrlbutions of an amount

of not less than thirteen dollars ($13) and not

more than fifty dollars ($50) as may be decided

upon by the Committee of Management

of any

Branch, shall be paid half yearly not later than

January 31 and July 31 each year by all members,

each branch, sub-branch

or district committee

shall have the right to demand payment of such

contributions, for which

a membership ticket

shall be issued, conditionally that all fines

and levies due are paid, such ticket to

interchangeable between all branches of the

Union.

Persons

joining the Union following

these dates and unflnancial members who pay

all

contributions, fines, and levies shall

be issued

with a ticket."

Sub-rule ( 2 ) provides that contributions should

be paid to

and

collected by the branch secretary or authorised officlal

of the

Union. Sub-rule

( 3 ) provides for contributions to be paid by

juniors, and fixes them at 508

of the half yearly contribution

rate fixed for members. Rule

6A deals with ellgibillty to vote;

it appears that no

member is eligible to vote unless he or she

pays, as well as other monies, all levies owing, not later than

thirty days before the date fixed for the close

of any ballot.

Rule 8 of the Rules of the Union provides:

" 8 .

LEVIES

Levies may be imposed for the purpose

of carrying out

any of the objects

of the Union.

(a) The Federal Council shall have power to strike

levy on all members;

(b) The Committee of Management of any Branch shall

have power to strike

a levy on all or any

section of members in Its

~uridiction.

Any levy imposed under the provisions of this rule

shall not exceed ten dollars

($10) per week per member.

Such levy shall b.e paid to the Branch Secretary

- 6 -

authorised official of the Unlon In each Branch within

twenty-eight days from the date

of the striking thereof.

Each Branch Secretary upon receipt

of any Federal levy

shall forthwith remit same to the Federal Secretary."

So far as 1 s relevant, rule 10 provides:

" 10. MEMBERS UNFINANCIAL

A member who owes

to the Union:-

(a)

Any contributions for a longer period than one

calendar month after the

due date for the

payment thereof; or

(b) Any levy for a longer period than one calendar

month after the last day	on whlch such levy may
be paid; or

(c)

Any fine for a longer period than one calendar

month from the date

of the decision imposing the

fine; or

(d)	Any contributions which he had collected on

behalf of the Union,

shall be deemed unfinancial

nd while he so remains

unfinancial, shall

be excluded from all the privileges,

except the right

to vote pursuant to Rule 6 A , but not

from the obligations of membership, and shall at all

times be and remain liable to pay the whole of such

arrears of contributions, fines, levies, and monies

collected on behalf of the Union, and the Union may at

any time sue such member without prior notice for the

whole or any part

of the monies owed by him."

Rule 30 is entitled "FUNDS". Its opening words provide:

"The Union shall raise

funds by contrlbutions,

levies and fines, which funds, together with any other

moneys received,

may apply for the following

purposes:-"

Rule 32 provides that all monles

due or owing by members shall be

payable to and collected by the

branch secretary or authorised

official of the Union

of each branch.

- 7 -

Under rule 41, a branch conslsts of all members of the Union for the tlme being resident in the branch area.

By vlrtue

of rule 26, there is a branch in each

of the States of Australia,

save for New South Wales, in which there are two branches. Under rule 42(l)(d), a member who fails to pay contributions, levies

fines for a

period exceeding three years

succession may be

expelled or suspended by the

Federal Council or by the committee

of management of a branch.

Rule 49 makes detailed provisions

for

the

government

each

the

branches.

With respect

Victoria, it provides that one hundred financial members of the

branch may

have a special meeting called for the purpose

reviewing any matter declded by the committee

of management, upon

written request to the secretary.

No time llmit is specified

within which such a meeting must be called. Rule 51 includes amongst the functions of a branch committee of management "to administer the rules for the benefit of the members". It is

further provided in that rule that all decisions

of the committee

of management shall be

binding on the members unless negated or

amended

the

majority

members

present

meeting

specially summoned to deal

with the matter under consideration.

By rule 5Z(b), the quorum

for a special meeting of the Victorian

Branch is fixed at 25.

Rule 5 5 lists the duties of the

various

branch officers, including those of the branch secretary;

separate duties are listed for a branch treasurer, but the duties

of the branch secretary make it clear that

he or she is to

act as

a treasurer. He or she is, for Instance, required to

keep a cash

book and record

of branch expenditure, and

to produce at the end

of every six months,

or when called upon by the auditor,

all

books, documents and accounts to the auditor.

He or she is

also

- 8 -

required to receive all contrlbutions,

levles, fines and dues

payable by members and to bank the same. Rule

59 provldes

for

the time and place of general meetings.

These are to take place

once in each half-year in the Vlctorian Branch.	Sub-rule	( 3 )
provides :

" ( 3 ) Special General Meetmgs shall be summoned by the

Branch or Sub-Branch Committee

of Management by

advertisement in a daily newspaper,

and shall be

held at such time and place

s the Committee may

deem proper.

The Applicant's case was that the resolution

of 22nd May

1984 was incapable of amounting to a valid imposition of a

levy

or levies, pursuant to rule

8, and that it was therefore

invalid attempt to fix a rate of contributions exceeding that laid down In rule 6(1). This argument was put on two grounds.

The first was that the committee

of management was not exercising

its power to strike a levy pursuant to rule

8, because It was in

reality endeavouring to increase contributions.

The second was

that any levy fixed

22nd May 1984 would be

required to be

paid, in accordance with rule 8, within twenty-eight days of that day; no levy could be struck so as to be applicable within or with respect to any half-year commencing outside that period.

The first argument was put In various ways. Mr. Tracey of counsel, who appeared for the Applicant, concentrated

upon the

reference in the resolution of 22nd May

1984 to the union ticket,

and to the fact that it was the ticket that was being increased,

as an indication that the resolution amounted

to no more than an

increase

contributions.

The fact

hat

resolution

mentloned each half-year

was also relled

upon as showlng

intentlon

increase

contributions.

the

text

the

resolution were insufficlent, Mr. Tracey relied upon the articles

in the Union's newsletter, and the form of the tickets Issued to

the Applicant. The phrase "Union dues" in each of the newsletter

items was equated with contributions, and attention was drawn to

the fact that juniors were expressed in the newsletter

as being

required to pay $ 2 7 . 5 0 per six months, the effect

of whlch would

have been to

charge them only $ 2 . 5 0

instead of $5.00 under the

resolution.

The reference to this amount is,

of course, repeated

in the form of the tlcket.

The ticket itself, so Mr. Tracey

argued, indicated the intention of the committee of management

simply to increase subscriptions, by expressing the requirement

that $ 5 5 . 0 0

be paid in order to

~ustify

the purchase of the

ticket.

The essence of

the argument was that the express power

to raise contributions was to be found in rule 6 ;

the power

raise levies, found in rule R,

could not be

used in effect to

raise contributions, where the specific power existed and	was
limited.

This argument rests heavily

upon the assumption that

contributions are intended to be the prlmary means of fund raising within the Union, and that the power to raise levies is restricted to the collection of funds for a specific purpose at a particular time. A close examination of the rules, however, does not support either of these assumptions. Rule 30 mentions

contributions, levies and fines

as speciflc sources of funds of

the Union, without

discriminating between them. Under rule

the power to

impose levies may be

exercised for the purpose of

- 10 -

carrying

out

any

the oblects of the Unlon. Mr.

Tracey

conceded

that

would

open to a branch

commlttee of

management to Impose

a levy in the event of a shortage of

funds,

for the carrylng out of the ob~ects

and activitles of the

Union

generally, without the branch committee of management being

requlred to identify any speclfic object which it sought

to carry

out.	This concesslon, which is correct, undermmes much of Mr.

Tracey's argument. If the power to levy can be used to overcome shortages of funds for the general purposes of a branch, it can

be used to overcome such shortages

which arise from the limit

fixed by collected. It must be remembered that

rule

6(1) as to

the

contributions

which

can be

the	power to amend the

limit laid down in rule 6(1) was not a power which a branch committee of management could exercise; by rule 46, the power to

alter the rules

the Union resides in its Federal Councll.

There appears to me to be no reason why a branch committee of management cannot resort to the power to raise levies, found in

rule 8,

it is unable to raise sufficient monies for the

ordinary

conduct of

the branch,

because of

the

limit

contributions found in rule 6(1).

The committee of management of

a branch is, of

course, an elected body.

If its decisions are

unacceptable to members, they may

be attacked through the process

of seeking a special general meeting, or through the ballot box

at the next election for members

of the committee of management.

Nor can it be accepted that the linking of a levy

with

the issue of the half-yearly ticket constitutes evidence that the

decision was actuated by an improper purpose. In rule 6(11 It is

made clear that the issue of a membership ticket is conditional

- 11 -

on the payment of all fines and levies due. If, at 31st January or 31st July in any year, a member had failed to pay a levy which

was due, no ticket could be issued to

that member.

In the

circumstances, it was

not

surprising

that

the

committee of

management should have sought to take advantage

of this rule, and

to make the collection

of a half-yearly levy of $5.00 easier, by

linking its collection to the issue of a ticket.

The

committee

of management sought to do no more than to achieve a	practical
result consistent with the effect of the rules.

The admission into evidence

of the items

from the

two

newsletters was objected to by

Mr. North of counsel, who appeared

for the Respondents.

It is difficult to see how such items could

be admissible as evidence

of improper purpose on the part of the

committee of management.

In no way do they constitute evidence

of lack of

good faith, improper purpose, or ulterior motive

the part of members of the	committee of management who voted in
favour of the resolution.	The onus of proving impropriety lies

upon the party who alleges it. See Scott v. Jess (1984) 3 F.C.R. 263, at pages 269 and 287. Unless the news items could, in some way, be linked with the members of the committee of

management, they do not prove

such an allegatlon. Nor does the

form of the ticket assist the Applicant in proving that the committee of management was actuated by some wrongful purpose. At best, the assertions that junior members were bound only to pay $27.50 (this bemg 50% of the contribution and only 50%

the levy) amounts to

an incorrect conclusion as to the effect of

the resolution creating the levy.

- 12 -

There 1s no other evidence to suggest that the committee

of management, acted in

bad faith, or took lnto account improper

consideratlons in passing the resolution

of 22nd May 1984.

therefore hold that that resoution does not amount to an improper attempt to ralse the level of contributions above that provided

as the maxlmum level in rule

6(1).

Mr. Tracey's

second

argument

requires

a close

examination of rule 8.

At first sight, Mr. Tracey's assertion,

that the specification

of a twenty-eight day period leads

to the

conclusion that the committee

management cannot

fix a

levy

which will take effect outside such period,

has some attractions.

The purpose

of the twenty-eight day period must

be to enable

notice to

be given to members

of their obligation to pay the

amount levied,

and the collection

of that amount from

each

member.

It might also be to enable members to seek to challenge

the fixing of a levy, by putting into effect the procedure for summoning a special general meeting to override the decision of the commlttee of management. Each of these objects could be accomplished by specifylng a period before any resolution imposing a levy could become operative. The actual provision in

is twenty-eight days of the date of the "striking" of a levy.

not

so worded; It

requires

payment

within

the

rule

This

does suggest that	a levy is not operatlve outside twenty-eight
days from the date	of its "striking".

On the other hand, it is clear that rule

8 contemplates

recurring levies.

The express limit of $10.00 per week per

member shows that the rule contemplates continuing obligations

- 13 -

upon members to pay regular

amounts by way

of levy.

This is

strong indication that the collection of levies is not Intended

to be limited to a period of twenty-eight days from the decislon

of a committee of

management to raise a levy.

If such a limlt

had been intended, the overall llmit

the amount

of a

levy

would have been fixed simply at	$40.00 per member, i.e.	four
weeks at $10.00 per week.

The solution to these problems and to the construction

of rule 8 may lie in the meaning of the words "strike" and "striking". The word "strike" is listed in the Oxford Dictionary

as having in

excess of seventy

different

meanings.

difficult to find one which is appropriate to the imposition

of a

levy. Meanings such

as "to fix (a price) by agreement" and

"to

agree (to articles or terms)" carry the idea

of negotiation, with

the striking being the result of successful negotiation. This idea is not really appropriate to a decision by a committee of management to collect a levy from members. It may be, therefore,

that the word

"strike" and the word

"striking" in rule 8 are used

in some special sense, and that the meaning

of them must be

ascertained from

an examination of the rule itself, in the

context of other rules.

In this way, sense can be given to rule

B by regarding the striking

of the levy as the date from

which it

becomes operative. Thus, a decision by a committee of management

simply to impose

a levy of a certain amount would make that

amount

payable

members

within

twenty-eight

days

of the

decision.

A decision to impose

a levy of a certain amount per

member per week would impose

an obligation on each member to pay

that amount within twenty-eight

days of

each relevant week.

- 14 -

declsion to impose a series of levies, operative on dates In the future, wlll make each levy payable within twenty-eight days of its operative date. That date is to be regarded as the date of

the "striking" of the levy.

Such a construction achieves the

sensible result of giving flexibility of action to a committee of management, without, in my view, doing violence to the language of rule 8.

It was, therefore, open to the commlttee of

management

on 22nd May

1984 to resolve in favour

of a

recurring levy at

specific dates in the future.

Was

the resolutlon of that date

effective to accomplish this

end?

The crucial phrase in this

context 1s "per half-year". Numerous references are found in the

rules of the Union to

a half-year. For Instance, branch accounts

are required to

be audited each half-year. Much of the financial

organization of the Union, particularly in the branches, is

on a

half-yearly basis.

In my vlew, the reference to a half-year,

wherever it appears in the rules, is a reference to a half of

calendar year.

In Gibson v. Barton (1875) L.R. 1 0 Q.B. 329, and

Inland Revenue Commissioners v. Hobhouse C19561 1 W.L.R.

1393,

the word "year" was construed as

referring to a calendar

year,

i.e. the period between 1st January and 31st

December, and not to

a period of twelve months from some other date. In my view, in

the rules of the

Union, the phrase "half-year'' refers to the

period from 1st January to 30th

June, and the period from 1st

July to 31st December. No other provision is made

which

would

suggest that the half-years date from any other

times, and

specific provision is made

for six monthly flnancial perlods

commenclng and ending on other dates.

This view appears to be

- 15 -

consistent with the practlce of the Union itself,

In issuing its

membership tickets in respect of the period	from January to	June,
and the period from July to December.

Rule 6(1) requires contributions to

be "paid half-yearly

not

later

than

January

and

July

31 each year".

conclusion as to the use

of the phrase "half-year'' in the rules

is correct, contributions are paid for the period January to

June, both inclusive, and for the period July to December, both

inclusive.

In each case, those contributions are not required to

be paid untll the end

the first month

of the relevant

half-year.

In other words, the references

to specific dates in

rule 6(1) are not, in my	view, Intended to make the half-yearly
periods for contributions	run from those dates.

this analysis, sense is made of the phrase

"per

half-year" in the resolution of 22nd May 1984.

The intention

the resolution was to provide for

a levy of

$5.00, becoming

payable at the beginning

of each half-year

(i.e. half calendar

year) after the resolution

was passed.

In other words, while the

resolution was current, a new

obligation arose to pay a levy of

$5.00 on the first day of

each June and the first day of

each

January, from 1st June 1984 onwards. Rule 8 then operated to requlre each such levy to be paid within twenty-eight days from the first day of the relevant half-year. In order to obtain a

ticket, on 31st January or 31st July,

a member was required to

pay contributions of

$50.00 and a levy

of $5.00.

So construed, the resolution of 22nd May 1984

was

- 16 -

valid exercise of the power glven to the committee

of management

by rule 8.

For these reasons, the Rule

to Show Cause must

discharged. It is unnecessary for me to proceed to consider the nature of the relief sought by the Applicant.

In deference to

the arguments of

counsel, however,

I desire to address myself

briefly to the arguments that were

put.

In the event that the resolution

of 22nd May 1984 was

held to be Invalid,

Mr. Tracey sought

an order that monles

collected pursuant

to the resolution be repaid to members and

former members of the Union. This order was sought on three

bases. Firstly, it was said

to be justified by an lmplled rule

to the effect that moneys obtained

from members in breach

of the

rules would be accounted for. In the second place, repayment

was

said to be

justified by the rules

as a whole, there being an

implied limit upon the entitlement of officers to collect

funds

without proper authority. Thirdly, attention was

drawn to the

specific terms of

certain rules, the argument being that those

rules expressly founded

an order of the kind sought.

In Gordon v. Carroll (1975) 27 F.L.R. 129, at pages 155-156, the Australian Industrial Court held that implied terms

can arise in the rules

of an organization, and could be the

subject of directions pursuant to S . 141 of the Act.

In Dusmore

v. Porter (1982) 3 I.R. 418, at page 421, Northrop J. sald:

"Support for the

vlew that the court would give

directions for the observance

of an implied rule was

sought by reference

to passages appearing in the

judgment given in Gordon

v. Carrol (1977) 27 F.L.R. 129.

It is doubtful whether that case

1s authority for the

proposition relied

upon."

- 17 -

On appeal, In Porter v. Duqmore

(1984) 3

F.C.R. 39fi, at page 407,

Smithers J. (with whom Sheppard

J. agreed) set out the relevant

passage from Gordon v. Carroll and continued:

"In the judgment appealed against the learned judge

referred to a submission

made to him on behalf of the

applicant, that from the fact that the Australian

Industrial Court

had declared that rr. 7 and 10

contravened S . 140(1) of the Act, there should be

implied in the rules	of the Union a provision that the
members and officers	of the Branch would not engage in

conduct giving effect to the

O.K. Card System. The

observations quoted above from Gordon's case were relied

on in support of this submission.

His Honour took the

view that it was doubtful that that case

was authority

for the proposition asserted. Clearly that doubt was

well founded.

In the present case, Mr. Tracey argued that Porter v. Duqmore had

not put to rest the proposition that implied terms in the rules

of an organization are enforceable under S . 141 of the Act. His

argument was that the doubt expressed by Smithers

J. in Porter

Duqmore

was

limited

a doubt

whether

Gordon

v. Carroll

supported the narrow proposition

which

was

specifically the

subject of the judgment in Porter v. Ducrmore.

An examination

what Northrop J. said, however, alongside the passage	I have
quoted from Smithers J., makes it clear that Smithers	J. was

confirming the existence of a doubt whether implied terms can be found in the rules of an organization registered under the Act,

and

enforced

under

S . 141.

In Dusmore v. Porter

pages

421-422, Northrop J. expressed a number of practical reasons why S . 141 of the Act should be construed as referring only to the

rules of an organlzation which were in operation at the time

its first registration,

as altered subsequently in accordance

with S . 139 of the Act.

It is true that, in Porter v.

Duumore,

- 18 -

Smithers J., at pages

408-409, did appear to embark upon

examination of the question whether

implied term existed in

the rules of the organization there being examined. At page	410,
however, his Honour said:

"But the problem m hand would seem rather to

one of construction of the terms used

as ascertained by

what has been referred to

as the orthodox exercise, than

to be solved by

an inquiry as to the presence or

otherwlse of an Implied term."

In Scott v. Jess (1984) 3 F.C.R. 263 , at pages 283-284,	I
expressed the view that S. 141 of the Act does not enable the enforcement of implied terms in the rules of organizations. Mr.

Tracey submitted that

I had misconstrued the judgment

of Smithers

J. in Porter v. Dusmore. I do not consider that

I had, and

adhere to the

view which I expressed in Scott v. Jess.

Even if an

attempt is made to articulate a term to

implied in the rules of the

Union, or a limitation to be found by

implication in those rules, it

s by no means easy to find such

term or limitation properly expressed in the words used by

Mr.

Tracey.

Rule 30 of the rules of the Union expressly contemplates

that

the

Union may

receive

monies

otherwise

than

from

contributions, levies and fines. Some members

may desire to make

gifts to the Union

(as in the case

of a work-place collection

specifically designed

to assist employees from another work-place

who are on strike). Others may make payments under a mlstake

law, or in submitting to honest claims by the Union against them.

In those circumstances, the general law would seem to deny them

the opportunity to recover monies paid. To construe the rules as including a term that officers will account o members for monies

- 19 -

recelved by the

Union without proper authority under its rules

may be

going well beyond the kind

implication whlch would

result from the application of

tests such as those laid down

B.P. Refinery Pty. Ltd.

v. Hastinqs Shire Council

(1977) 52

A.L.J.R.

20, at page 26, especially the test that

an Implied term

must be

"so obvious that it goes without saying". Difficulties

arise in treating the rules

a a contract between each member

and

all other members,

when matters

of the relationship between

member and the

Union itself require determination. Any monies

received are the property

the Union, not the property of

any

member or members.

Such monies can only be paid out upon proper

authority derived from the rules, or on the basis of	established
legal principles.

Mr. Tracey's argument drew

attention to rule 51, which

provides,

among the functions

a branch

committee

management, the function "to administer the rules

for the benefit

of the

members".

He also

referred

rule

55(c)(2),

which

imposes on a branch secretary an obligation to receive

all

contributions, levies, fines and

dues payable by members within

the jurisdiction of

his branch, and to bank the same.

Mr.

Tracey's argument, the express terms

of these provisions were

such as to found a general order under

S. 141 for repayment to

all members and former members

an invalidly collected levy.

So to construe these rules would involve great difficulty.

There

are grave dangers In attempts by the Court to found orders under

S . 141 of the Act upon expresslons In the rules of

organizations

such as "the benefit of the

members". Opinions

may differ very

widely as to whether a particular course is or

is not for the

- 20 -

benefit

the

members.

Generally, it

is for

the

elected

officials of an organization

to make that decision, rather than

for the Court. There

real risk in

the Court acting on

the

assumption that it is qualified to make such a determination.

Scott V. Jess (above), the Full Court rejected as an appropriate test of the expenditure of the resources of an organization the test of whether such expenditure was in the interests of the members as a whole.

An express duty upon a branch secretary to receive and bank all contributions, levies, fines and dues does not, on

its

face, support an order of the kind sought. Some implication, to

the effect that the branch secretary was not to receive any other

monies,

would be necessary. In the

context of

the

rules,

especially rule 30, no such implication can be

made.

For these reasons, even if I had reached the conclusion that the resolution of 22nd May

1984 was invalid, and that monies

had been collected without proper authority under the rules,

should have been very reluctant to grant the relief sought in the

Rule to Show Cause.

The order of the Court will be that the

Rule

to Show Cause is discharged.

[1985] FCA 641

20 Dec 1985