FEDERAL COURT OF AUSTRALIA

Skourdoumbis v Findlay [2002] FCA 638

INDUSTRIAL LAW - organisation – rules - validity - rule providing for numbers of delegates elected by divisional branches to divisional conference - lack of proportion between the membership of divisional branches and relative voting power on divisional conference - referendum of all members of division could direct divisional conference – delegates to divisional conference constitute electoral college for election of divisional executive and part of electoral college for election of national officers – whether conditions, obligations or restrictions on members that are oppressive, unreasonable or unjust – effect of change of objects of Act and purposes of registration of organisations under Act - whether contravention in rule relating to numbers of delegates to divisional conference or in rules as a whole

INDUSTRIAL LAW - organisation – rules – performance and observance - referendum of financial members of division – requests by divisional branch committee of management and by petition of members of division within one divisional branch – proposal for amendments to rules - whether divisional branch unfinancial - requirement to “pay” sustentation fees – whether satisfied by set off against greater debt owed by divisional office to divisional branch – whether enough signatories to petition financial members – whether proposed rule amendments would contravene Act – whether divisional executive entitled to refuse to conduct referendum

WORDS & PHRASES - “pay”

Workplace Relations Act 1996 (Cth) ss 3(f), 3(g), 187A, 196(c), 208, 209

Conciliation & Arbitration Act 1904 (Cth) ss 2(e), 2(f), 140(1)(c)

Industrial Relations Act 1988 (Cth) s 196(c)

Workplace Relations and Other Legislation Amendment Act 1996 (Cth)

McLeish v Kane (1978) 22 ALR 547 followed

McLeish v Faure (1979) 25 ALR 403 followed

Luckman v Australian Postal and Telecommunications Union (1978) 28 ALR 393 considered

Sherriff v Townsend (1980) 30 ALR 223 considered

Willingale v Australian Federated Union of Locomotive Enginemen (1982) 62 FLR 129 considered

Scott v Rolfe (1979) 36 FLR 249 considered

Cook v Crawford (1982) 43 ALR 83 considered

Willingale v Australian Federated Union of Locomotive Enginemen (1983) 68 FLR 149 considered

Lawley v Transport Workers’ Union of Australia (1987) 22 IR 114 followed

Burwood Cinema Ltd v Australian Theatrical and Amusement Employees’ Association (1925) 35 CLR 528 considered

R v Dunphy; Ex parte Maynes (1978) 139 CLR 482 considered

Egan v Maher (1978) 20 ALR 421 considered

Griffiths v Ansett Pilots Association [2001] FCA 1215 followed

Drake Personnel (New Zealand) Ltd v Taylor [1996] 2 NZLR 644 referred to

Gladstone Milk Bar Ltd v Henning [1998] 3 NZLR 183 referred to

LEO SKOURDOUMBIS v ALEX FINDLAY, RICK FOWLER, GREGORY COLIN WILLIAMS, EDWARD NORMAN HARRIS, BRADLEY PARKER, MICHAEL MITTEN, FRANK VARI, MICHAEL HARITOU, JAMES ROBERT EMERY, STEPHEN ROWE, CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION AND JOHN MAITLAND

V 281 of 2001

JOE PATTI v MICHAEL HARITOU, ALEX FINDLAY, RICK FOWLER, GREGORY WILLIAMS, EDWARD HARRIS, BRADLEY PARKER, MICHAEL MITTEN, JOHN MAITLAND AND CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

V 636 of 2001

GRAY J

21 MAY 2002

PERTH (HEARD IN MELBOURNE)

                                                                                                                               V 636 of 2001

THE COURT ORDERS THAT:

1.         Paragraphs 1, 2 and 3 of the rule to show cause granted in matter no. V 281 of 2001 be discharged.

2.         The rule to show cause granted in matter no. V 636 of 2001 be discharged.

3.         Otherwise, the consolidated proceeding be adjourned to 9 September 2002, for the purpose of giving the Construction, Forestry, Mining and Energy Union an opportunity to alter its rules.

4.         On or before 16 August 2002, the Construction, Forestry, Mining and Energy Union file and serve an affidavit, setting out the alterations it has made to its rules to eliminate the contravention of s 196(c) of the Workplace Relations Act 1996 (Cth) identified in the reasons for judgment in this proceeding and the procedures followed to alter those rules.

5.         On or before 23 August 2002, any party wishing to contend that the rules as altered fail to eliminate the contravention identified in the reasons for judgment in this proceeding or are otherwise in contravention of the Workplace Relations Act 1996 (Cth), or that the alterations to the rules have not been made validly, file and serve a statement of contentions of fact and law, stating particulars of the contention, and any affidavit on which that party seeks to rely.

6.         On or before 30 August 2002, the Construction, Forestry, Mining and Energy Union file and serve any statement of contentions of fact and law, and any affidavit on which it may seek to rely, in answer to any such contention.

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

                                                                                                                               V 636 of 2001

REASONS FOR JUDGMENT

1                     This consolidated proceeding raises issues as to the validity and construction of the rules of the Construction, Forestry, Mining and Energy Union (“the Union”).  The Union is an organisation, registered pursuant to the Workplace Relations Act 1996 (Cth) (“the WR Act”).  The Union exists in its present structure as a result of several amalgamations of organisations originally registered pursuant to the Conciliation and Arbitration Act 1904 (Cth) (“the C&A Act”) and the Industrial Relations Act 1988 (Cth) (“the IR Act”).  The IR Act was amended significantly, and renamed to become the WR Act, by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth).

2                     The history of amalgamations has resulted in the existence within the structure of the Union of divisions, corresponding wholly or in part with what were formerly separate organisations.  Rule 27 of the rules of the Union (“the Union Rules”) makes provision for such divisions.  One such division is known as the FFTS Union Division, which corresponds with a former organisation known as the Federated Furnishing Trades Society of Australasia.  The FFTS Union Division has its own rules (“the Division Rules”). 

3                     Proceeding no. V 281 of 2001 was commenced by a rule to show cause, granted on 19 April 2001.  The applicant, Leo Skourdoumbis, is a member of the Union attached to the FFTS Union Division.  The respondents named in the original rule to show cause are the members of the Divisional Conference of the FFTS Union Division (“the Divisional Conference”), elected by the members of the five divisional branches that make up the FFTS Union Division.  The Union itself is also a respondent.  The original rule to show cause sought four orders.  The first was an order pursuant to s 209 of the WR Act that the individual respondents perform and observe the Division Rules by refraining from holding a meeting of the Divisional Conference on 26 April 2001.  That order is no longer relevant; 26 April 2001 came and went without such a meeting being held.  The second order sought invoked s 209(7) of the WR Act.  The fourth order was sought pursuant to s 208 of the WR Act.  Under both s 209(7) and s 208(2), the Court may declare that the whole or a part of a rule of an organisation contravenes s 196, or that the rules of an organisation contravene s 196 in a particular respect.  Both the second and fourth orders sought are based on the allegation that r 5(A)(2) of the Division Rules contravenes s 196(c) of the WR Act in so far as it fails to provide appropriate representation for the members of the FFTS Union Division Victorian Divisional Branch (“the Victorian Divisional Branch”).  These issues relating to the validity of r 5(A)(2) of the Division Rules are central to the proceeding as it now stands.  In addition, the third order sought in the original rule to show cause was an order that the individual respondents perform and observe the Division Rules by taking a referendum of the whole of the financial members of the FFTS Union Division on a question whether r 5(A)(2) of the Division Rules should be amended in a particular way.  This order is no longer sought, because of circumstances detailed later in these reasons for judgment.  On its face, therefore, proceeding no. V 281 of 2001 is concerned with the validity of a particular provision of the Division Rules.

4                     Proceeding no. V 636 of 2001 was commenced by a rule to show cause granted on 7 June 2001.  The applicant is Joe Patti, a member of the Union attached to the FFTS Union Division.  The respondents constitute the Divisional Executive of the FFTS Union Division (“the Divisional Executive”).  The order sought is an order pursuant to s 209 of the WR Act that the respondents perform and observe the Division Rules by taking a referendum of the whole of the financial members of the FFTS Union Division on two questions.  The first question concerns the amendment of r 5(A)(2) of the Division Rules.  The proposed amendment is different from the proposal that was the subject of the third order sought in proceeding no. V 281 of 2001.  The second question proposes the insertion of a new r 35A into the Division Rules.

5                     On 10 December 2001, I made orders consolidating the two proceedings, granting leave for the Union to intervene and adding John Maitland as a respondent, on the basis that, as National Secretary, he is entitled ex officio to be a non-voting member of the Divisional Conference and the Divisional Executive.

The Union Rules

6                     The history of amalgamation of organisations that led to the Union having its present structure is reflected in r 2 of the Union Rules, which specifies the various categories of persons who are eligible to be members of the Union.  The practice has been to incorporate the totality of the eligibility rules of an amalgamating organisation.  Members who are attached to the FFTS Union Division are, at least primarily, those who fall within subr (F) of r 2, which contains in substance the eligibility rule of the former Federated Furnishing Trades Society of Australasia.  Rule 7 relates to membership.  Subrule (iv) provides that a member shall be attached to the division of the Union covering the industry or employment of the member and shall be in only one such division.  By the terms of that rule, the decision to attach a member to a particular division is not for the member, but for some person or body within the Union.  Subrule (viii) contains provisions for the transfer of a member from one division to another, in the first instance by agreement between the two divisions or divisional branches.  Where agreement cannot be reached, the decision is made by the National Executive or an officer designated by the National Executive. 

7                     Rule 8 of the Union Rules provides for entrance fees and contributions.  Subrule (i) provides that entrance fees and contributions payable on application for membership shall be in accordance with the rules of the division to which a person or member is to be or is assigned.  Rule 8 then continues:

“(ii)     Any member who has failed to pay the entrance fees, or contributions,
            levies and fines imposed in accordance with the rules of the union on
            or before the date specified in such rules, shall be deemed to be
            unfinancial, and shall not be eligible to receive any benefits,
            participate in any deliberations, propose or second any new applicant
            for admission or exercise any authority or any membership rights,
            provided that the rules may provide that some members or some class
            or classes of members may vote in a ballot and/or may differentiate
            between classes of members as to the amount of any contribution
            and/or entrance fee.

(iii)      A member shall be deemed to be financial immediately upon payment
            of all arrears outstanding.”

8                     It should be noted that r 5 of the Union Rules contains a definition of “financial member”.  The term is defined to mean any member who has paid all subscriptions, fines, levies and dues in accordance with the Union Rules.

9                     Rule 13(i) of the Union Rules provides that the supreme governing body of the Union shall be the National Conference, convened every two years or specially in accordance with the Union Rules.  By r 13(ii), the National Conference consists of all of the members of each and every divisional executive for every division of the Union.  Rule 14 provides for a National Executive Committee, consisting of the National President, the National Senior Vice-President from the FFTS Union Division, the National Secretary, the National Assistant Secretary and the full-time elected officer of each division at a national level who is not otherwise a member of the National Executive Committee.  Rule 15 provides for a National Executive, composed of the National Executive Committee and the principal officer of each divisional branch of the Union who is not otherwise a member of the National Executive Committee. 

10                  Rule 16 of the Union Rules provides for the election of national officers.  The National Secretary, National Assistant Secretary and National President are to be elected by and from a body described as the National Collegiate.  This body consists of the delegates to all of the divisional conferences of the Union.  Subrule (i) makes provision for divisions with more than one divisional branch to be represented by at least one officer.  Special provision is made that the principal officer of the FFTS Union Division shall be a National Senior Vice-President who shall be and remain a member of the National Executive and the National Executive Committee. 

11                  Rule 17 of the Union Rules requires that divisional branch delegates to a divisional conference are to be elected in accordance with the rules of the division every four years in conjunction with the divisional branch elections.  The election is to be by direct ballot of the financial members of each divisional branch.  Rule 18 of the Union Rules provides for a divisional executive, to be elected either by and from the divisional conference or by direct ballot of the financial members of the division.  It also provides for the divisional officers at a national level to be members of the divisional executive.  The position of delegate to National Conference is to be held by the same person as holds the position as divisional branch member of the divisional executive; the election to one position is to be an election to the other position and a removal from one position is to be a removal from the other.

12                  Rule 27 of the Union Rules provides that there shall be divisions of the Union, established on the basis of industry or occupation.  There are provisions for autonomy of each division in various matters, including the industrial interests of its members, the election of officers, matters arising from the objects of the division, the structure of the division and the
funds and property of the division.  Of some importance to the present case is subr (iv), which provides as follows:

“Each Division shall have rules and have power to make, alter or rescind such rules, to be called Divisional Rules.  Without limiting the generality of the foregoing paragraph, each Division shall have power to determine policy for that Division, not inconsistent with the rules and policy of the Union as decided by National Conference or National Executive.”

Subrule (vi) provides that divisions shall, in accordance with their rules, have divisional branches along a geographic, occupational or area basis.

13                  The structure of the Union is made even more complex by the existence of branches (as distinct from divisional branches), as specified in r 28 of the Union Rules.  There is a branch in each State and in the Australian Capital Territory.  Branches have the function of coordinating divisional branches at a State or Territory level, dealing with matters affecting only that State and more than one division and any other matter that divisions or divisional branches agree should be dealt with by a branch.

14                  It is convenient to set out the whole of r 34 of the Union Rules, which is headed “Dissolution” as follows:

“The Union shall not be dissolved unless all of the existing Divisions agree.  Provided that a Division shall cease to exist wherever the number of financial members of that Division is reduced to less than one thousand (1,000) members.

Where a Division ceases to exist and the Union continues, the property of that defunct Division shall be vested in the Division to which the members of the defunct Division are allocated.

Where the Union is dissolved the property of the Union shall be vested in the trustees of each existing Division at the time of dissolution for the benefit of the members thereof on the basis that each such Division will continue to hold its own property and funds and any property or funds not vested at the time of dissolution in a Division shall be divided between the existing Divisions on a basis proportionate to the membership of each such Division.”

15                  Rule 40 of the Union Rules is headed “Manner of Summoning Meetings”.  It provides:

“The National Executive, the State Executive, a Divisional Executive or a Divisional Branch Management/Executive Committee may, in their absolute discretion, summon meetings of members over which they have authority and/or responsibility from time to time.

If such meeting is called notice shall be given in a union journal circulating in the area covering the members to which the meeting relates or in a mass circulation daily newspaper circulating in the area in which the meeting is to be held and such publication shall be issued at least fourteen days before the date of the meeting.  The notice of such meeting shall specify the day, the date, the time and the place of such meeting.”

16                  Rule 42 contains transitional provisions concerned with the various amalgamations that have brought the Union into existence.  The rule covers almost four pages of closely typed text.  Much of it is irrelevant to the present case, but it is convenient to set out the extracts that might bear upon the issues in this consolidated proceeding:

“(i)      Upon Amalgamation

            ...

The FFTS Union Division shall consist of all persons eligible and continuing to be eligible for membership of the Union under Rule 2(F) including all former members of the previously registered FFTS.

While the FFTS Union Division continues its separate existence, the demarcation between the FFTS Union Division and the other Divisions of the CFMEU shall be in accordance with the above demarcation on the basis of the status quo and custom and practice of coverage as it existed between the previously registered The Federated Furnishing Trade [sic] Society of Australasia and the CFMEU including therein demarcation disputes which have been determined by either State or Federal industrial authorities.  Where any disagreement occurs between the FFTS Union Division and any other Division of the Union the matter shall be referred to the National Executive which shall determine the demarcation appropriate but such determination shall be based on the principles enunciated in this paragraph.

            ...

(iii)      After Amalgamation

            Subject to any changes made by unanimous decision of the National
            Executive Committee, following amalgamation, there shall be a
            restructuring of the Divisions on the following basis:

            ...

            (d)        Provided that the restructuring referred to above shall not
                        affect the separate existence of the FFTS Union Division and
                        untranslated FEDFA Divisional Branches for the time
                        specified in this Transitional Rule.

            ...

(xii)     (a)        The restructuring referred to herein shall be effected by 1st
                        April 1997.  Except in the case of the FEDFA Victorian Branch
                        which shall become the CFMEU, FEDFA Victorian Divisional
                        Branch such restructuring may be effected at a time later than
                        23 September 1995 but shall be effected before 1 July 2001.
                        Further provided that in relation to the FFTS Union Division
                        it may have a separate existence for a period of up to eight
                        years which period shall be shortened only with the agreement
                        of the Divisional Executive of the FFTS Union Division and the
                        eight (8) years shall commence on the date of effect of
                        amalgamation of the FFTS and CFMEU.  If no agreement has
                        been reached by the dates set out herein then, notwithstanding
                        any other rule of the Union, the National Executive shall
                        determine the changes necessary to effect such restructuring,
                        including any and all rule changes therefor.  It is the current
                        intention that the FFTS Union Division will be restructured
                        after a maximum of eight (8) years substantially into Forestry,
                        Forest and Building Manufacturing Products Division.

            ...

(xiii)    Notwithstanding the provisions of this Rule 42 or any other rule of the
            Union, the FFTS Union Division may have a separate existence for a
            period of up to four years beyond the expiration of the eight years
            referred to in the preceding sub-rule (xii).  This sub-rule (xiii) shall
            not otherwise affect the operation of sub-rule (xii).  For the avoidance
            of doubt, the four years referred to in this sub-rule shall expire on 26
            March 2005.

(xiv)    In this rule the CFMEU shall, where the context permits, mean the
            new CFMEU being the amalgamated organisation the Construction,
            Forestry, Mining and Energy Union and where not otherwise
            permitting shall mean the old CFMEU being the Construction
            Forestry and Mining Employees Union prior to amalgamation.

            ...

FFTS means, where it is not accompanied by the term “Union
Division”, The Federated Furnishing Trade [sic] Society of Australasia.”

Branch Rules

17                  Rules 43 – 54 of the Union Rules are the rules applicable to all of the State and Territory branches of the Union.  They are described as “Branch Rules”.  By r 46(i), the supreme governing body of each branch shall, subject to the autonomy of the divisional branches, be the State Conference, convened every two years and “especially” in accordance with the Branch Rules.  By r 46(ii), the State Conference is to consist of all of the members of each and every divisional branch management committee for every divisional branch of the Union within the State or Territory covered by the branch.  Rule 47 makes provision for a State Executive, composed of the full-time elected officers (other than organisers except where there is express provision for them) of each divisional branch within the branch area.  One of these full-time elected officers is to be the State President, one the State Senior Vice-President, one the State Secretary and one the State Assistant Secretary.  If not otherwise a member of the State Executive, the President of each Divisional Branch is to be a member of the State Executive.  State Executive has all the powers of the State Conference, subject to review by the State Conference.  By r 48(i), the State Officers are elected by and from the State Conference.

The Division Rules

18                  Pursuant to the power given to a division by r 27(iv) of the Union Rules, the FFTS Union Division has made the Division Rules.  By r 2 of the Division Rules, every member who is a member of the Union by virtue of r 2(F) of the Union Rules shall belong to the FFTS Union Division.  Rule 4 makes provision for application for membership and admission to membership following application. 

19                  Rule 5 of the Division Rules is central to this case.  Its relevant provisions are:

“5 - SUPREME GOVERNING BODY IN THE DIVISION

(A)       Constitution of the Divisional Conference:

(1)       The supreme governing body of the Division shall be the Divisional
            Conference which shall meet at least once every two (2) years and
            consist of representatives from at least two (2) Divisional Branches.

(2)       Divisional Branches having 500 financial members or less shall be
entitled to one representative on the Divisional Conference; more
than 500 financial members but less than 1000 financial members
two representatives; and one additional representative for each
additional 2000 financial members.

...

(4)       Divisional Branches, may where elected Delegates to Divisional
Conference agree, arrange multiple voting representation to
Divisional Conference by notifying the Divisional Secretary prior
to the beginning of the Divisional Conference for a number of
delegates to be credentialled and of the arrangements for proxy
voting to be adopted by that/those delegates to Divisional
Conference.

(5)       Divisional Conference shall consist of delegates including full time
Divisional Officers elected as delegates.  Provided that Divisional
Branch Secretary by virtue of being elected as such shall automatically be the Divisional Branch delegate or one of the Divisional Branch delegates to Divisional Conference.

(6)       Where one or more representatives of a Divisional Branch is or are unable to attend a meeting of the Divisional Conference the Divisional Branch Committee of Management of that Divisional Branch may itself select a proxy representative or representatives to act on its behalf at that meeting.  Such representative or representatives shall vote in accordance with the instructions of the Divisional Branch Committee of Management, if any.

...

(8)       (a)        The returns for the financial year immediately preceding the
            year in which a Divisional Branch Election is held showing the
            financial membership of the Divisional Branch in accordance
            with Rule 28(f) shall be conclusive evidence as to the number
            of representatives to which a Divisional Branch is entitled and
            shall be determined by dividing the gross annual income from
            contributions by the annual contributions payable by adult
            Divisional Branch members.

            (b)        Where a Divisional Branch has more than one class of
            membership the aggregate number of members from all classes
            shall be determined by dividing the gross annual income from
            each class of contributions by the annual contribution payable
            by that class of adult Divisional Branch member.

(B)       Powers and Functions of Divisional Conference:

The following powers and functions are hereby committed to the Divisional
Conference, that is to say the power to administer the Rules of the Division and where necessary to interpret them and to manage and conduct the affairs
of the Division for the benefit of all members, and in particular the following powers:

(a)       To establish Divisional Branches and to arrange for Divisional
            Branches to amalgamate one with another and to allocate to
            Divisional Branches the area within which they respectively shall
            operate and to transfer members from Divisional Branch to Divisional
            Branch and to close or disband Divisional Branches and generally to
            control Divisional Branches and the members thereof, and including
            the power to give or withhold approval of existing or future Rules of
            any Divisional Branch.

(b)       To elect members of the Division Executive and officers and additional
            Divisional Executive Members of the Division and to fix the salaries of
            officers.

(c)        To conduct a ballot of members of the Division or of any Divisional
            Branch or section thereof either of its own motion or on application
            under the Rules and to convene meetings of members of any Divisional
            Branch or section of the Division.

(d)       To control generally the funds of the Division and incidentally thereto
            it may cause to be made an audit or special audit of the books and
            accounts of any officer of the Division or of any Divisional Branch of
            the Division or section of the Division or of any officer thereof.

...

(i)        To exercise such other powers as may be committed to it under these
            Rules or the Rules of any Divisional Branch.”

20                  Rule 7 provides for meetings of the Divisional Conference as follows:

“(1)     Ordinary Meetings:

            The Divisional Conference shall meet at least once in every two years
            at such time and place as a majority of the Divisional Executive may
            determine.

(2)       Extraordinary Meetings:

            (i)         An extraordinary meeting of the Divisional Conference shall be
                        convened by the Divisional Secretary upon the request of three
                        or more Divisional Branches or Divisional Branch Committees
                        of Management, provided that the request be transmitted to the
                        Divisional Secretary stating the matter for consideration by
                        Divisional Conference and furnishing copies of resolutions
                        carried by members in meetings of each of the Divisional
                        Branches or Divisional Branch Committees of Management
                        making the request, and provided further that if such request be
                        received by the Divisional Secretary within three months of the
                        time at which the Divisional Conference in the ordinary course
                        will meet, it shall not be obligatory on the Divisional Secretary
                        to comply with the request.

            (ii)        Extraordinary meetings of the Divisional Conference may be
                        convened by the Divisional Secretary to consider any matter or
                        matters which is considered sufficiently urgent to warrant the
                        holding of an extraordinary meeting of the Divisional
                        Conference.

...

(4)       Quorum:

A majority of credentialled Divisional Branch Representatives
representing not less than two (2) branches shall constitute a quorum
of any Ordinary or Extraordinary meeting of the Divisional
Conference.”

21                  The method of voting in the Divisional Conference and the Divisional Executive is dealt with in r 8 as follows:

“(1)     On all questions of a general character brought before the Divisional
            Conference the votes shall be taken by a show of hands provided that,
            in the unavoidable absence of a representative the Divisional
            Conference may, by resolution, give another representative
            representing the Divisional Branch not fully represented, power to
            cast the full number of votes to which his Divisional Branch is entitled.
            Any member may demand a secret ballot of all representatives present.

(2)       On all questions brought before the Divisional Executive the votes
            shall be taken by a show of hands but where all members of the
            Executive are not in attendance, a majority of those present may
            demand a postal ballot of all members of the Executive on any
            question.

(3)       For the purposes of this Rule the Divisional President shall have a
            deliberative vote only, and where the voting on any proposition put to
            a vote of the Divisional Conference or Executive (as the case may be)
            fails to produce a majority decision the proposition shall be
            considered to have been rejected.”

22                  By r 11(1)(a)(i), the Divisional Executive is to consist of the Divisional President, two Divisional Vice-Presidents, a Divisional Secretary, an Assistant Divisional Secretary and two additional Divisional Executive Members.  They are elected by and from the Divisional Conference.  Rule 11(3) and (4) provide:

“(3)     The powers and functions of the Divisional Conference pursuant to
            these rules may be exercised by the Divisional Executive between
            meetings of the Divisional Conference provided that the Divisional
            Secretary shall notify Divisional Branches of all resolutions carried,
            within 14 days of their adoption, and unless disapproved of by three or
            more Divisional Branches by resolution carried at a general
            meeting of members of a Divisional Branch or by resolution of a
            Divisional Branch Committee of Management specially summoned to
            consider the resolution by the Divisional Executive within six weeks of
            adoption of such resolution the resolution shall become operative and
            be binding upon all Divisional Branches and all members of the
            Division.

(4)       The Divisional Executive shall meet at least once in every year.
            Meetings of the Divisional Executive shall be summonsed by the
            Divisional Secretary or in his absence the Divisional President and
            shall be held at such time and place as shall be decided by the
            Divisional Secretary or in his absence the Divisional President
            provided that a majority of members of the Divisional Executive may
            demand a meeting of Divisional Executive to be held at such time and
            place as stipulated by members of the Divisional Executive provided
            further that the President and Divisional Secretary may, with the
            approval of the Divisional Conference defer the holding of an
            Executive meeting, should they deem the holding of such meeting
            unwarranted.”

23                  By r 12(1) and (2), the Divisional President, who is to preside at all meetings of the Divisional Conference and Divisional Executive, is to have a deliberative vote only.

24                  Rule 15 of the Division Rules is also of great significance in the present case.  It provides:

“On a decision of a majority of Divisional Branches, or Divisional Branches whose membership constitutes a majority of the members of the Division or on receipt of a petition signed by not less than 10 per cent of the financial members of the Division, the Divisional Executive shall take a referendum of the whole of the financial members of the Division upon the matter or matters submitted by the Divisional Branches or members.  A decision reached by a majority of the actual votes recorded shall be binding on the Divisional Conference Divisional Executive and the financial members of the Division.

Divisional Executive may at any time by its own motion take a referendum of the whole of the members of the Division upon any matter it thinks fit.”

25                  Rule 17 provides for the fixing of entrance fees by each divisional branch, with a discretion to exempt for those transferring from other recognised industrial unions.  Subrule (2)(a) provides that annual contributions are not to exceed 1 per cent of fifty-two times the adult weekly rate for a Furniture Maker Grade D as prescribed at that time by the Federal Furnishing Trades (Consolidated) Award 1975 or its successor, or its equivalent in any applicable State award or determination.  Contributions are payable during each quarter “or as any Divisional Branch may otherwise determine.”  Subrule (2)(b) provides that a divisional branch may fix the annual contributions to be paid by certain classes of members in excess of that prescribed by subr (2)(a).

26                  Rule 18 provides that if any member allows contributions, fines, levies, dues and penalties to the amount in all of one quarter’s contributions to remain unpaid, that member is not to be entitled to any benefits nor to apply for any official position in the FFTS Union Division, nor to nominate or be nominated for election to any official position in the FFTS Union Division, nor to move or second any motion in any meeting of members until such member has paid all monies owing.  A member in arrears for one quarter may be sued. 

27                  Rule 21 provides for divisional branches.  Although it provides that a divisional branch may be constituted in each State, in fact there are divisional branches of the FFTS Union Division only in Victoria, New South Wales, Queensland, South Australia and Tasmania.  There is provision in r 21(c) for the disbanding of a divisional branch and for its members to become members of another divisional branch. 

28                  By r 23, the Divisional Conference is empowered to disband a divisional branch for failure to observe any of the rules of the Union, failure to give effect to any decision of the Divisional Conference, acting contrary to law or if the divisional branch committee of management fails to carry out its obligations.

29                  Rule 28 of the Division Rules provides for the Divisional Fund.  Its relevant provisions are as follows:

“(a)     Each Divisional Branch shall forward to the Divisional Office such
            percentage of the Divisional Branch income as may be determined
            from time to time by the Divisional Conference.

...

(d)       All expenditure for ordinary purposes, ie., incurred in directly
            furthering the objects of the Union for members of this Division or in
            the expenses of management of this Division or in satisfying any debt
            to or of the Divisional Office, may be disbursed by decision of the
            Divisional Secretary.

            ...

(e)        The property of the Division shall be under the control of the
            Divisional Executive.

(f)        (1)        Divisional Branch Secretary shall forward to the Divisional
                        Secretary on or before the 28th day of February each year
                        returns showing:

                        (a)        The financial membership of each class of members of
                                    the Divisional Branch on the last day of the preceding
                                    December.

                        (b)        The gross annual income received by the Divisional
                                    Branch from each class of contributions for the period
                                    preceding the last day of December.

                        (c)        The amount of contribution payable by adult members
                                    for each class during the twelve (12) months preceding
                                    the last day of December.

            (2)        Divisional Branches shall pay sustentation fees prior to the last
                        day in August and February each year.

(g)       If any Divisional Branch permits or allows its sustentation fees or
            levies made pursuant to Rule 20 to remain unpaid for longer than
            three (3) months after the time at which the same became due to be
            paid such Divisional Branch shall not be entitled to representation on
            the Divisional Conference nor to nominate a delegate or
            representative on any Committee or similar body of the Division nor
            shall it be eligible to vote on any question affecting the Division nor
            shall its members be eligible to participate in any general ballot of
            members of the Division until such Divisional Branch has paid all
            monies owing to the Divisional Office.”

30                  Rule 30 provides for the alteration of the Division Rules as follows:

“These Divisional Rules and any Divisional Branch Rules of this Division may be altered or rescinded or new rules made by the Divisional Conference.  Proposals for alterations of such rules may also be proposed by Divisional Branches and shall be forwarded with the notice to the Divisional Executive.

Provided that Divisional Conference in session may alter such rules although
previous notice has not been given.

Nothing in this rule affects the right of the Divisional Conference to vote on
any matter, including rules, otherwise than at a meeting assembled.

Provided that any rescission, alteration or amendment which effects a
requirement of the Act or the Industrial Registrar may be made by the Divisional Executive.”

The reference to “the notice” in the first paragraph of r 30 is unclear.  No other rule appears to make provision for notice to be given to the Divisional Executive. 

31                  Rule 36 provides for a committee of management of a divisional branch, consisting of a Divisional Branch President, two Divisional Branch Vice-Presidents, a Divisional Branch Secretary, an Assistant Divisional Branch Secretary (if any), Divisional Branch Organisers and additional Branch Executive members (if any) not to exceed three, and at least four and not more than twelve additional financial members as determined by each divisional branch committee of management.  The rule also provides for a divisional branch executive consisting of the Divisional Branch President, two Divisional Branch Vice-Presidents, the Divisional Branch Secretary, the Assistant Divisional Branch Secretary (if any), Divisional Branch Organisers and additional Branch Executive members (if any) not to exceed three.  By r 37, the divisional branch committee of management is required to administer the rules of the Union, the FFTS Union Division and the divisional branch for the benefit of the members, and has a number of specific powers.  Rule 38 requires that the divisional branch committee of management meet not less frequently than once in each month.  There is provision for special meetings to be summoned by the divisional branch president and divisional branch secretary, with written notice of a special meeting to be despatched to each member of the committee at a time which in the ordinary course will afford that member an opportunity to attend.  By r 39, the divisional branch executive meets at regular intervals, which it fixes.  The divisional branch president or the divisional branch secretary may call a meeting of the divisional branch executive at any time.

32                  Rule 46 provides for general meetings of divisional branches.  Ordinary meetings are to be held half yearly.  Special meetings may be called at any time by the divisional branch committee of management or on a resolution passed at an ordinary meeting of members.  There is provision for the giving of notice by advertisement of special meetings.  Rule 47 relates to control of the divisional branch committee of management by referendum of the financial members of the divisional branch.  It includes a specific power to the divisional branch committee of management to determine the question to be submitted to the members and the form of the ballot paper.

The validity of r 5(A)(2)

33                  As I have said, there is an issue as to the validity of r 5(A)(2) of the Division Rules.  That rule is set out above.  It relates to the composition of the Divisional Conference.  Each branch having 500 financial members or less is entitled to one representative.  A branch with more than 500 but less than 1000 financial members is entitled to two representatives.  A branch receives one additional representative for each additional 2000 financial members.

34                  In the first place, a question of construction arises.  It should be noted that the provision of the rule relating to an additional representative for each additional 2000 financial members does not include words such as “or part thereof”.  The intention appears to be that a Divisional Branch is entitled to an additional representative only in respect of each complete 2000 financial members additional to the range of more than 500 but less than 1000.  In reality, therefore, the rule provides for one representative from a Divisional Branch with 500 members or less, two representatives from a Divisional Branch with more than 500 but less than 3000 financial members, three representatives from a Divisional Branch with 3000 or more but less than 5000 financial members and four representatives from a Divisional Branch with 5000 or more but less than 7000 members.  There appears to be no warrant for implying words such as “or part thereof”.  No party to the proceeding contended for such implication.

35                  By s 208 of the WR Act, a member of an organisation may apply to the Court for an order declaring that the whole or a part of a rule of the organisation contravenes s 196 or that the rules of an organisation contravene s 196 in a particular respect.  Section 209 relates to applications for orders giving directions for the performance or observance of the rules of an organisation by any person who is under an obligation to perform or observe those rules.  Section 209(7) provides:

“Where the Court, in considering an application under this section, finds that the whole or a part of a rule of the organisation concerned contravenes section 196 or that the rules of the organisation concerned contravene that section in a particular respect, the Court may, by order, make a declaration to that effect.”

36                  Section 196 provides relevantly:

“The rules of an organisation:

...

(c)        shall not impose on applicants for membership, or members, of the
            organisation, conditions, obligations or restrictions that, having
            regard to the objects of this Act and the purposes of the registration of
            organisations under this Act, are oppressive, unreasonable or unjust.”

Similar provisions were to be found in s 140(1)(c) of the C&A Act and s 196(c) of the IR Act.

37                  Ever since McLeish v Kane (1978) 22 ALR 547, it has been recognised that s 196(c) may impact upon the rules of an organisation whose members are divided into branches, or other aggregations, the members of which are entitled to elect representatives to a decision-making body.  The rules of such an organisation will impose on members conditions or restrictions that contravene s 196(c) if they fail to provide for representation of the branches or other aggregations bearing some proportion to the numbers of members in the respective branches or aggregations.  The organisation with which McLeish v Kane was concerned had a single branch in each State.  The branches were of varying sizes, so that the biggest had 43.1 per cent of the members of the organisation and the other branches had 20.7 per cent, 16.3 per cent, 9.0 per cent, 7.1 per cent and 3.6 per cent respectively.  The organisation had a national council consisting of its general secretary and delegates elected by each branch.  The number of delegates was between one and four, depending on the number of members of the branch.  The delegates had rights to exercise votes according to the membership of their respective branches.  The number of votes to which a branch was entitled varied from two to ten.  The effect of this rule was to give the largest branch only 22.7 per cent of the vote and the other branches respectively 20.4 per cent, 18.1 per cent, 15.9 per cent, 13.6 per cent and 6.8 per cent.  The result, therefore, was to dilute significantly the influence of the members of the largest branch in the national affairs of the organisation.  In holding this rule to contravene the provision equivalent to s 196(c) of the WR Act, the Court directed its attention particularly to the objects that were then found in s 2(e) and (f) of the C&A Act.  At 555 – 559, the Court said:

“It is to be observed that the particular relevancy of these two objects to this consideration is that the question of oppression etc is to be determined having regard to the objects of the Act and the purposes of the registration of organizations under the Act.

...

The court in exercising its present jurisdiction is concerned with all the objects of the Act and clearly it is fundamental to those objects that there be not only democratically controlled organizations but that these organizations should be viable.  In other words, we must take care to ensure not only that democratic control is encouraged but also that the organization remains viable.  This means that questions of balance must arise.  On the one hand, the objects include the encouragement of democratic control, but in having regard to that object we clearly cannot disregard the need for the organization to be a viable one.  It is a feature common to federations with component parts of different strength and sizes that there must be a system of checks and balances.  That, of course, is quite clearly illustrated in the Constitution of the Commonwealth of Australia with its provision for two Houses of Parliament in one of which the component States have, generally speaking, equal numbers of representatives and in the other of which regard is had to the number of electors in determining the number of representatives.  Like provisions are a feature of federations elsewhere.

The importance of this consideration is that branches of organizations are probably necessarily of unequal membership and of unequal strength.  Industry and production have developed at different rates and in different ways in the different States and, generally speaking, there is necessarily a greater number of workers available for union membership in the larger States.  Again, generally speaking, branches of organizations conform with State  boundaries.  They are generally defined by geographic features although there are some organizations with branches defined by the industry or the occupation of its members.  In both cases there will inevitably be branches of different size.  What we are concerned with is the encouragement of democratic control.

It is not to be thought that this democratic control is to be achieved in one sweep.  Our concern is to see that it is encouraged.  So when considering the reasonableness etc of a rule having regard to this object we must consider it against this background.  In a union structure there seems no place for two policy making bodies.  We know of no attempt which has been made to have two such bodies and the system of checks available between a Senate and a House of Representatives is not present here.

None the less there clearly will exist fears on the part of smaller branches or workers in the smaller State that if they join with a federation they and their members may be swamped by the larger branches.  To insist then on types of rules where the democratic ideal of one person one vote existed would, in our view, operate to prevent viable national bodies being formed.

...

If the objects of the Act are seen to both encourage viable organizations and to encourage the democratic control of them, in determining the reasonableness of a rule it is necessary to look at what is practicable even though it may be something less than, for example, a complete democracy.

...

When one comes to consider the present organization it may be said at once that if the rules provided for an equal representation from each branch that would mean that the smaller branches dominated the larger and such rules would, in our view, not encourage democratic control and would be unreasonable.  On the other hand if the rules provided for votes in strict accord with membership then in our view the smaller branches would feel swamped by the larger and the organization might well cease to exist or be viable.  Some balance between these two extremes is necessary.”

38                  At 559, the court referred to two earlier authorities and pointed out that, at the time when they were decided, the objects of the C&A Act did not include the object in s 2(f), which came into existence in 1973.  At 559, the Court said:

“Since the 1973 amendment we think that the considerably added emphasis has been given to the object of encouraging the democratic control of organizations and the full participation by members in the affairs of the organization.”

39                  Two themes are prominent in McLeish v Kane.  One is that the ascertainment of the outcome of an attempt to argue that a rule of the kind considered in that case contravenes a provision like s 196(c) cannot be predicted with certainty.  As the Court, constituted by the same judges, in McLeish v Faure (1979) 25 ALR 403 at 416 said, there is a:

“spectrum over which rules dealing with the weighting of the voting power at meetings of branch delegates to or members of federal bodies of organizations might validly range”.

40                  A particular rule must be examined in the context of the particular organisation’s rules.  A number of factors may be relevant.  These may include the history of membership numbers in the various branches or other aggregations existing within the organisation.  See McLeish v Kane at 557.  They will certainly include other provisions of the rules of the organisation that may compensate for the lack of proportion between the membership of a branch or other division and its relative voting power on the decision-making body.  Prominent among such other rules will be any rule that offers the possibility of a plebiscite or referendum of members.  Such a rule might afford the majority of members the means to assert their authority over the decision-making body and, in turn, cause those exercising their voting power on the decision-making body to refrain from acting against the perceived interests of the majority.  The more readily available such a plebiscite or referendum is under the rules of the organisation, the more likely it is that the Court will hold that a disproportion between voting power on a decision-making body and membership numbers in various branches or other aggregations does not contravene s 196(c).  The nature of the function and powers of the decision-making body concerned will also be relevant.

41                  The principles enunciated in McLeish v Kane and McLeish v Faure were applied in a number of significant cases in the years immediately following these leading cases.  In some of those cases, it was held that the relevant rule of the organisation concerned contravened the provision equivalent to s 196(c), because of failure to provide sufficient voting power to a larger branch or larger branches.  See, for instance Luckman v Australian Postal and Telecommunications Union (1978) 28 ALR 393; Sherriff v Townsend (1980) 30 ALR 223; Willingale v Australian Federated Union of Locomotive Enginemen (1982) 62 FLR 129.  Other cases made it clear that some imbalance between numerical strength and voting representation was tolerable.  See Scott v Rolfe (1979) 36 FLR 249; Cook v Crawford (1982) 43 ALR 83; and Willingale v Australian Federated Union of Locomotive Enginemen (1983) 68 FLR 149.  It has also been held that the principles are not restricted to the composition of national decision-making bodies.  They were applied in Lawley v Transport Workers’ Union of Australia (1987) 22 IR 114 at 119 to the representation of sub-branches on the committee of management of the Queensland Branch of the Transport Workers’ Union of Australia. 

42                  The second important theme emerging from McLeish v Kane is the relevance of the objects of the legislation.  As is apparent from the passages quoted above, the Court in that case placed great weight on the objects then found in s 2(e) and (f) of the C&A Act.  Those objects were in the following terms:

“(e)     to encourage the organization of representative bodies of employers
            and employees and their registration under this Act; and

(f)        to encourage the democratic control of organizations so registered
            and the full participation by members of such an organization in the
            affairs of the Organization.”

43                  Among the widespread amendments that produced the WR Act was a complete recasting of the objects.  There is no longer to be found any equivalent of the former s 2(e).  Rather than encouraging the organisation of representative bodies and their registration, the WR Act now aims, as part of the “principal object” in s 3, at:

“(f)      ensuring freedom of association, including the rights of employees and
            employers to join an organisation or association of their choice, or not
            to join an organisation or association”.

44                  The “principal object” contains no reference to “democratic control”.  The equivalent provision is directed to:

“(g)     ensuring that employee and employer organisations registered under
            this Act are representative of and accountable to their members, and
            are able to operate effectively”.

45                  Any reference to “democratic control” is relegated to s 187A of the WR Act, which provides:

“As well as the objects set out in section 3, this Part has these objects:

(a)       to encourage the democratic control of organisations; and

(b)       to encourage members of organisations to participate in the
            organisations’ affairs; and

(c)        to encourage the efficient management of organisations.”

46                  Section 196(c) still requires that regard be had to the objects of the WR Act, in assessing whether a rule or rules contravene s 196(c).  It makes no reference to the additional objects of Pt IX.  Instead of encouraging democratic control, the emphasis in applying s 196(c) is now on the organisation being representative of and accountable to its members and on its effective operation.  In many cases, the differences may be subtle, but it seems no longer possible simply to apply the McLeish v Kane principles in a simplistic way.  Regard must now be had to the changed emphasis in the objects of the WR Act. 

47                  The abandonment of the object in s 2(e) of the former legislation is no mere slip.  The amendments that led to the WR Act brought about a fundamental change in the role of registered organisations.  From the inception of the C&A Act, registered organisations were given a major role in the system of conciliation and arbitration established by the C&A Act.  They were principals, and not mere agents of their members, in the creation, usually by written logs of claims, of disputes and in the resolution, usually by awards, of those disputes.  See Burwood Cinema Ltd v Australian Theatrical and Amusement Employees’ Association (1925) 35 CLR 528, especially at 551 per Starke J.  Since 1996, organisations are no longer given such a prominent position in the operation of the WR Act.  The constitutional basis of the WR Act has been expanded beyond the legislative power with respect to conciliation and arbitration.  Awards no longer have the central position they had in the system for many decades.  The powers of the Australian Industrial Relations Commission with respect to arbitration are curtailed severely.  Employers are empowered to enter into collective agreements with their employees, as an alternative to agreements with unions representing those employees.  Provision is now made for individual agreements.  As that part of the principal object of the WR Act referred to in s 3(f) demonstrates, the intention is that the decision whether or not to join an organisation is intended to be a purely voluntary one.  Employees may, if they wish, make use of other bargaining agents in attempting to reach agreements with their employers.

48                  Relative to other comparable countries, Australia has a history of a high level of external control of the internal affairs of trade unions.  The provisions of the WR Act relating to the content of rules, and the jurisdiction given to the Court by ss 208 and 209, and earlier corresponding provisions, are significant aspects of that high level of control.  The price of being given a pre-eminent role in the system of conciliation and arbitration was that organisations were required to bring their rules into a state of conformity with the legislation, and to maintain them in that state.  They were liable to have their rules enforced at the suit of individual members, often aided by legal aid under a special scheme under which aid was granted significantly more generously, both as to means testing and as to the nature of the cases aided, than was the case with legal aid for most other forms of legal proceeding.  With the change in the role of organisations since 1996, the case for such stringent regulation is less persuasive.  If trade unions are to be regarded as service providers, competing with other entities in a marketplace for the provision of negotiating and other skills, and if membership of them is to be truly voluntary, there is a stronger case for the control of the internal affairs of organisations by market forces.  A potential member can decline to join an organisation, or a member can leave, if the rules of the organisation are thought to be too restrictive, or the management of the organisation is conducted in a manner that does not earn their approval. 

49                  The change in the role of organisations since 1996 has not been accompanied by the repeal of any of the statutory provisions relating to the control of the internal affairs of organisations.  Section 208 and s 196(c) are in the same form as they were for some years prior to 1996.  When s 196(c) requires the Court to have regard to the purposes of the registration of organisations under the WR Act, however, it may be that the Court will take a different view as to the validity of the rule or rules in question because of the changes in those purposes.  Authorities decided prior to 1996 may no longer be definitive of the result. 

50                  Much of the evidence before the Court in this case as to the numbers of members in the Divisional Branches of the FFTS Union Division can be summarised in the following table.

*  Figure qualified by the word “approximately”.

51                  The figures in the columns for 1995, 1996, 1997 and 1998 are taken from the annual accounts of the FFTS Union Division.  They show the membership numbers as at 31 December in each of those years.  It is unclear from the terms of the documents whether the figures are intended to show numbers of financial members, or to include those who are unfinancial at the relevant date.  Draft annual accounts showing the total membership of the FFTS Union Division for the year ended 31 December 1999 were tendered in evidence and are the source of the total figure for that year.  The affidavit of the Acting Secretary of the South Australian Divisional Branch reveals that that Divisional Branch had 1293 financial members at 31 December 1999 and 1610 members, a figure supported by the accounting officer’s certificate for that year.  The figure of 984 for the New South Wales Divisional Branch for the year ended 31 December 1999 has been derived by subtracting the total of all the other Divisional Branches from the national total.  To that extent, it is dependent upon the accuracy of the other figures.  Information was supplied by the solicitors acting for the respondent Williams, the Secretary of the New South Wales Divisional Branch, and the respondent Parker, the Secretary of the Queensland Divisional Branch, in response to notices to produce.  The information was supplied by letter dated 11 December 2001, which was tendered in evidence.  It was apparently compiled from the records of those Divisional Branches.  The letter gives a figure of 802 for the membership of the New South Wales Divisional Branch and confirms the figure of 385 for the Queensland Divisional Branch at 31 December 1999.  The figures in the table for 1999 would be altered if the figure of 802 were used.  The national total would be reduced to 8814.  I have preferred to use the figure in the draft national accounts and simply to note the discrepancy in relation to the New South Wales, or possibly some other, Divisional Branch.

52                  The figures in the column for 2000 are not taken from annual accounts at all, but from a letter dated 17 August 2000 from the respondent Michael Haritou as Assistant Divisional Secretary of the FFTS Union Division to the Deputy Industrial Registrar.  The figures were supplied for the purpose of calculating the number of Divisional Branch delegates to be elected by the members of each Divisional Branch to the Divisional Conference in an election held in 2000.  They are said to be based on the income received by each Divisional Branch on which the FFTS Union Division sustentation fees are calculated.  Mr Haritou wrote that he believed that these figures were “the most accurate.”  He did not supply the total, which I have calculated from the figures he gives for the different divisional branches.  In fact, the annual accounts of the Victorian Divisional Branch for the year ended 31 December 2000 give the number of members of the Victorian Divisional Branch as 6,345, only four more than Mr Haritou’s figure, thereby tending to confirm the accuracy of Mr Haritou’s calculation.

53                  Save for the annual accounts of the South Australian Divisional Branch, no other annual accounts for the year ended 31 December 2000 were tendered in evidence.  Those accounts show the number of financial members of that Divisional Branch at 31 December 2000 was 1,125.  Other accounts of the South Australian Divisional Branch show its total membership at 31 December 2000 to have been 1,511.  The solicitors’ letter dated 11 December 2001 shows the membership of the Queensland Divisional Branch at 31 December 2000 as 357 and the membership of the New South Wales Divisional Branch at the same date as 994.  These figures are not as close to Mr Haritou’s as the Victorian figure.  In the absence of complete information, I have used Mr Haritou’s figures as the basis for the calculation of the relevant percentage specified below.

54                  Evidence of membership of the various Divisional Branches after 31 December 1999 is incomplete.  I have already referred to the evidence of membership of the various divisional branches at 31 December 2000.  Material produced by the Acting Secretary of the South Australian Divisional Branch shows its membership as 1,518 (1,194 of whom were financial) at 31 March 2001, 1,507 (1,055 financial) at 30 April 2001, 1,472 (1,061 financial) at 31 May 2001 and 1,471 (1,057 financial) at 30 June 2001.  The solicitors’ letter dated 11 December 2001 gives figures for the Queensland Divisional branch at 3 April 2001 (371), 8 May 2001 (367), 18 May 2001 (370) and 30 June 2001 (359).  The same letter gives figures for the New South Wales Divisional Branch at 3 April 2001 (1,035), 8 May 2001 (1,027) and 30 June 2001 (1,022).  A monthly summary report for the Committee of Management of the Victorian Divisional Branch for the month of July 2001 shows the total number of members of the Divisional Branch as 6,531.  A letter from the National Systems Co-ordinator of the Union, dated 10 December 2001, also tendered in evidence, shows the membership of the Tasmanian Divisional Branch at 30 April 2001 (143) and 31 May 2001 (149).

55                  The figures indicate that, in the years for which they are available, the Victorian Divisional Branch’s percentage of the membership of the FFTS Union Division was as follows:

1995                                56.94

1996                                56.49

1997                                55.88

1998                                69.95

1999                                65.91

2000                68.96

56                  Applying rule 5(A)(2) of the Division Rules as I have construed it, and assuming the members were all financial, the numbers of delegates to the Divisional Conference to which each of the Divisional Branches was entitled was as follows:

                        Vic                   4

                        NSW               2 (from 1997 – earlier figures not available)

                        Qld                  2 (1995 and 1996) 1 (from 1998)

                        SA                   2

                        Tas                   1

57                  Thus, it appears that, throughout the period in respect of which evidence was tendered, the Victorian Divisional Branch had significantly more than half of the membership of the FFTS Union Division.  In recent times, its share of the total membership has risen to around two-thirds.  It has only been entitled to four out of eleven or ten delegates on the Divisional Conference, ie 36.36 per cent or 40 per cent of the total voting power of the Divisional Conference.

58                  It is on this evidence that the claim of the applicant Leo Skourdoumbis pursuant to s 208 and s 209(7) of the WR Act is based.  The absence of up to date evidence of membership numbers within the FFTS Union Division gives rise to a problem.  An order pursuant to s 208(2), or s 209(7), of the WR Act with respect to the validity of a rule or rules of an organisation can only be made in respect of those rules as they stand at the date when judgment is given, and as they operate on the facts that exist at that date.  See R v Dunphy; Ex parte Maynes (1978) 139 CLR 482 at 495 per Mason J, with whom Barwick CJ, Stephen, and Aickin JJ concurred and Egan v Maher (1978) 20 ALR 421 at 477 – 483 per Northrop J, with whom Evatt J concurred.  It is therefore necessary for the applicant to ask the Court to apply the presumption of continuity, so as to find that, at the present time, the disproportion between the percentage of members of the FFTS Union Division attached to the Victorian Divisional Branch and the percentage of voting power of that Divisional Branch on the Divisional Conference has continued to something like its extent in the years for which the figures are in evidence.

59                  It may be seen that the percentage of the total membership of the FFTS Union Division attached to the Victorian Divisional Branch has increased from the mid fifties to the high sixties between 1997 and 1998.  One of the apparent causes of this increase was a significant drop in the membership in the Queensland Divisional Branch between 1996 and 1998 (figures for that Divisional Branch for 1997 were not the subject of evidence).  To some extent, this decrease was offset by an increase in the membership of the South Australian Divisional Branch.  Another factor appears to have been an overall decrease in the membership of the FFTS Union Division.  Clearly, changes have occurred.  To this extent, the confidence with which it is possible to rely on the presumption of continuance must be reduced.  It is clear, however, that, throughout the period for which evidence was tendered, the Victorian Divisional Branch has had significantly more than half of the membership of the FFTS Union Division.  No evidence was given of any reason to suppose that this is no longer the case.  The evidence did not point to any event likely to have given rise to a significant change since 1998 (the last year in respect of which full official figures were available) and the present time.  It is therefore safe to find, on the balance of probabilities, that the Victorian Divisional Branch still has significantly more than half the membership of the FFTS Union Division.  It is also safe to find, on the balance of probabilities, that r 5(A)(2) of the Division Rules operates to entitle the various divisional branches to representation by the same numbers of delegates to Divisional Conference as they have been entitled to over recent years, without significant variation.  In other words, the Victorian Divisional Branch has significantly more than half the membership of the FFTS Union Division but significantly less than half the voting power on the Divisional Conference. 

60                  The question is whether the disproportion between the percentage of members and the percentage of voting power lie at a point on the spectrum that brings about a contravention of s 196(c).  If the effect of r 5(A)(2) were limited to the election of delegates whose only function was to act as the decision-making body for the FFTS Union Division, I should be disposed to answer that question in the negative.

61                  I note that the persons elected to the Divisional Conference are described in r 5(A) of the Divisional Rules as “representatives” or, in some cases, as “delegates”.  The use of the former term does not suggest as strongly as the latter that those elected are expected to vote in accordance with instructions from their respective divisional branches.  The arrangement of multiple voting representation or proxy voting, referred to in r 5(A)(4), is conditional upon the agreement of the delegates (I assume that this means agreement among the delegates from a particular divisional branch).  The only express power for a divisional branch to instruct a delegate how to vote at a meeting of the Divisional Conference appears to be found in r 5(A)(6).  It is limited to the case of a proxy representative selected by the divisional branch committee of management.  Otherwise, it appears that the rules contemplate that the representatives or delegates vote as they see fit at meetings of the Divisional Conference.  In most cases, no doubt, those elected will be elected as a group, on a “ticket”, will be of the same mind as those elected to other positions within the divisional branch, and will vote as a bloc.  Such a situation will not always prevail.  Even if it is to be assumed that delegates from a divisional branch will all vote in the same way, there is no evidence of a history of the Divisional Conference dividing along branch lines, with all of the delegates of the other divisional branches combining to vote down the delegates from the Victorian Divisional Branch.  To the extent to which there is evidence, it suggests that such a voting pattern has not occurred.  Alignment of branches along political or factional lines is at least as likely.  I note that, for some years, the Divisional Conference elected the respondent Findlay as Division President and Lou Kyriacou as Divisional Secretary.  Both were from the Victorian Divisional Branch.  This suggests that there has not been consistent tension between the Victorian Divisional Branch and the other divisional branches when votes are counted at meetings of the Divisional Conference.

62                  The major factor tending against holding that there is a contravention of s 196(c) is the presence of r 15 of the Division Rules.  That is the rule providing for a referendum of the whole of the financial members of the Division.  The rule provides for three ways in which such a referendum can be requested.  Two are readily available to the Victorian Divisional Branch if required.  The first is a decision of Divisional Branches whose membership constitutes a majority of the members of the FFTS Union Division.  On its proper construction, this aspect of r 15 permits the Victorian Divisional Branch alone to require the holding of a referendum of all of the financial members of the FFTS Union Division.  There is no reason why the plural expression “Divisional Branches” in r 15 should not include the singular if, as is the case, one divisional branch has a majority of the membership of the FFTS Union Division.  I note that the Union Rules, under the authority of which the Division Rules have been made, in r 5 provide expressly that the plural include the singular.  Further, on its proper construction, this aspect of r 15 permits the Victorian Divisional Branch to act by means of any of its decision-making organs, namely the Divisional Branch Committee of Management (pursuant to r 37), the Divisional Branch Executive (pursuant to r 36(B)) or a meeting of the members of the Divisional Branch (pursuant to r 46).  If necessary, 10 per cent of the financial members of the Victorian Divisional Branch could requisition a special meeting of the Divisional Branch or a referendum of the whole of the financial members of the Divisional Branch, to force a decision to require a referendum of the financial members of the FFTS Union Division, pursuant to r 47.  The second method provided by r 15 by which the Victorian Divisional Branch could require a referendum of the financial members of the FFTS Union Division is by petition signed by not less than 10 per cent of the financial members of the FFTS Union Division.  This is by no means an impossible hurdle.  The evidence is that it is exactly what has happened in respect of an attempt by the Victorian Divisional Branch to force an amendment to the rules of the FFTS Union Division.

63                  Rule 15 does have its defects.  It contains no provision as to the time within which the Divisional Executive is required to take a referendum following receipt of a requisition or a petition.  If necessary, delay could be cured by application to the Court pursuant to s 209 of the WR Act.  Nor does r 15 contain any specific provision as to whether the Divisional Executive has power to formulate the proposal to be put to a referendum, in contrast to the power given to the Divisional Branch Committee of Management by r 47(B)(c).  Nonetheless, it appears that the requirement in r 15 that the Divisional Executive take a referendum “upon the matter or matters submitted” suggests that the Divisional Executive has power to determine the actual form of the question or questions put to the financial members of the FFTS Union Division, so long as it does not depart from the substance of the request.  Compare Griffiths v Ansett Pilots Association [2001] FCA 1215 at [30] – [34].  In my view, r 15, although not ideal, is adequate to save the decision-making process within the FFTS Union Division from contravening s 196(c) of the WR Act by reason of the disproportion between the percentage of members of the Victorian Divisional Branch and the percentage of voting power exercised by delegates of that branch. 

64                  The effect of r 5(A)(2) is not limited to decision-making within the division.  By r 11 of the Division Rules, the Divisional Conference is constituted as the electoral college for the election of the Divisional Executive.  Only persons elected as delegates to the Divisional Conference can be elected to the Divisional Executive.  In turn, the members of the Divisional Executive become members of the National Conference, pursuant to r 13(ii) of the Union Rules.  There are no members of the National Conference who are not also members of divisional executives of divisions of the Union.  Delegates to the Divisional Conference, along with delegates to the divisional conference of each other division of the Union, constitute the National Collegiate as defined in r 5 of the Union Rules.  The National Collegiate is the electoral college for the election of the national officers, pursuant to r 15(ii) of the Union Rules.  By r 14 of the Union Rules, the National Executive Committee consists of the national principal officers and the full-time elected officer of each division.  In other words, only people who have been elected as Divisional Conference delegates can participate in the decision-making of the Union at a national level.  The exception is that the principal officer of each Divisional Branch is a member of the National Executive.  In the case of the FFTS Union Division, the effect of r 5(A)(5) is to require that a person elected as the principal officer of a Divisional Branch be one of the Divisional Conference delegates.  The Victorian Divisional Branch cannot therefore have the views of its members represented at the national level in the Union other than by persons who are elected as delegates to the Divisional Conference of the FFTS Union Division.  The numerical under-representation of the Victorian Divisional Branch is therefore of greater significance than the making of decisions within the FFTS Union Division.  Election of delegates to the Divisional Conference is the only opportunity that members of the Divisional Branch have to influence the identity of the persons who will be responsible for the management both of the FFTS Union Division and of the Union itself.  It is true that, at the branch level, the State Conference will include all members of the Victorian Divisional Branch, pursuant to r 46(ii) in the Branch Rules.  The functions of a branch, however, are quite limited by r 28(i) of the Union Rules.

65                  In my view, the far-reaching effect of electing delegates to the Divisional Conference of the FFTS Union Division gives rise to a contravention of s 196(c) of the WR Act as a result of the imbalance between the percentage of members of the FFTS Union Division attached to the Victorian Divisional Branch and the number of delegates to the Divisional Conference to which r 5(A)(2) of the Division Rules entitles the Victorian Divisional Branch.  The question then arises as to whether the particular rule, r 5(A)(2) of the Division Rules contravenes s 196(c), or whether the rules as a whole contravene that provision.  Following the reasoning in Lawley v Transport Workers’ Union of Australia (1987) 22 IR 114 at 120 – 123, the true analysis of the contravention is that the rules of the union contravene s 196(c) in that specific respect.  There is nothing inherently wrong with r 5(A)(2) of the Division Rules, standing on its own.  Such imbalance as it creates could be cured by other provisions of the rules.  For instance, in the view I take, other provisions of the rules relating to the election of delegates to the National Conference would make a significant difference.  A separate provision for weighted voting on the Divisional Conference, according to the membership of Divisional Branches might also be significant.  These are only two examples of ways in which the situation might be cured.  The true analysis, therefore, is that it is the rules of the union that impose conditions, obligations or restrictions on members which, having regard to the objects of the WR Act and the purposes of the registration of organisations under the WR Act, are oppressive, unreasonable or unjust.

66                  What kind of order should be made?  In the circumstances, s 208(2) empowers the Court to make an order declaring that the Union Rules contravene s 196 in a particular respect.  Under s 208(4), in the alternative, the Court can adjourn the proceeding for such period and on such terms and conditions as it considers appropriate for the purpose of giving the Union an opportunity to alter its rules.  I must also bear in mind that an order is sought pursuant to s 209(7) of the WR Act.  Section 209(8) provides that s 208, other than subs (1) to (4), applies in relation to an order made under s 209(7) as if the order had been made under s 208.  There is no express power for the Court to adjourn a proceeding under s 209 for the purpose of giving an organisation an opportunity to alter its rules.  There is an anomaly in the legislation.  The effect of an order under s 209(7) is the same as that of an order under s 208(2), but no provision is made for the defect in the rules to be remedied otherwise than by an order of the Court.  The anomaly may be resolved by recognising that the Court has a residual discretion to refuse to make any order under s 209, even though the circumstances that would justify the making of such an order have been established.  See Cook v Crawford (1982) 43 ALR 83 at 154 – 159 in the judgment of Sheppard J, with whom Smithers J (at 112) agreed, and at 125 in the judgment of Keely J.

67                  In my view, it would be inappropriate to make an order of the kind contemplated by s 208(2) of the WR Act.  No submission was made that harm to any person would result unless a declaration of the kind contemplated by s 208(2) and s 209(7) were made.  It would be different if there were a particular rule that contravened s 196(c) and some action contemplated or continuing, which would result in such harm.  I have held, however, that the defect is one of the rules as a whole, rather than any particular rule. A declaration that the rules as a whole contravene s 196(c) in a particular respect does not result in any particular rule being, or being treated as, void.  All of the rules of the Union will continue to operate, until amendments are made, whether a declaration is made, or an adjournment is granted.  The only significant difference is that the making of a declaration would have the necessary finality to entitle a party aggrieved to appeal from the order.  This could be overcome by the recognition, on any application for leave to appeal, of the essentially final nature of the Court’s order in relation to the contravention of s 196(c).  For these reasons, in my view the Union should be given the opportunity to consider what alterations it might wish to make to its rules to bring them into conformity with the provisions of the WR Act.  For this purpose, the Court should exercise its residual discretion not to make a declaration pursuant to s 209(7), and should exercise the power in s 208(4) of the WR Act to adjourn the proceedings to a specified date for the purpose of giving the Union that opportunity.  It would be appropriate to give directions for the filing of material, so that the Court can examine such alterations as the Union might make to its rules, for the purpose of determining whether they have brought the rules into conformity with the legislative requirements.

68                  It will be apparent from what I have already said, and from what appears below in these reasons for judgment, that I regard the Union as at large in its choice of the means it proposes to use to amend its rules.  It is not confined to making amendments by means of the Divisional Conference of the FFTS Union Division.  Nor is it confined to an amendment to r 5(A)(2) of the Division Rules.  It may be, for instance, that the Union decides to proceed with the amalgamation of the FFTS Union Division with another division, already contemplated in the transitional rules to which I have referred.  The abolition of the FFTS Union Division would, of course, eliminate the particular defect from which I have held that the rules suffer.

The referendum

69                  There have been two attempts, initiated within the Victorian Divisional Branch of the FFTS Union Division, to bring about referenda of the whole of the financial members of the FFTS Union Division.  Each attempt has been directed towards eliminating the defect in the rules arising from the under-representation of the Victorian Divisional Branch on the Divisional Conference.

70                  On 3 April 2001, the Committee of Management of the Victorian Divisional Branch met and passed the following resolution:

“1.       Noting that the Victorian Divisional Branch of the FFTS Union Division constitutes a majority of the members of the FFTS Union Division.

The Branch Committee hereby resolves pursuant to Rule 15 of the FFTS Union Division Rules that it wishes a referendum to be held on the following question:

·        Should the Divisional Executive as soon as possible amend Rule
5(A)(2) of the FFTS Division Rules to read as follows:

‘5(A)(2)

Divisional Branches having 500 financial members or less shall be entitled to one representative on the Divisional Conference; more than 500 financial members but less than 1000 financial members two representatives; and one additional representative for each additional 500 financial members.’

2.         That the Assistant Secretary write to the Divisional President, advising him of Resolution 1 and requesting that a referendum be conducted as soon as possible by the Divisional Executive to determine the question set out in Resolution 1.

3.         That the Assistant Secretary take steps to have circulated among the financial members of the Branch a petition in the following terms for submission to the Divisional Executive:

‘In accordance with Rule 15 of the FFTS Union Division Rules, we, the undersigned, being financial members of the FFTS Union Division, hereby request that a referendum be held in order to determine the following question:

·        Should the Divisional Executive as soon as possible amend
Rule 5(A)(2) of the FFTS Division Rules to read as follows:

            ‘5(A)(2)

Divisional Branches having 500 financial members or less shall be
entitled to one representative on the Divisional Conference; more than 500 financial members but less than 1000 financial members two representatives; and one additional representative for each additional 500 financial members.’”

71                  In accordance with resolution (2), the applicant Skourdoumbis wrote to the respondent Findlay, as President of the FFTS Union Division, a letter dated 11 April 2000.  The letter enclosed the resolutions that had been passed by the Committee of Management of the Victorian Divisional Branch.  It conveyed a request of the Committee of Management to Mr Findlay that he exercise his powers under r 11(4) and call for an urgent meeting of the Divisional Executive in order to make the necessary arrangements for a referendum pursuant to r 15.  According to the affidavit evidence of the applicant Patti, the letter was sent on 26 April 2001.

72                  By letter dated 8 May 2001, Mr Findlay advised the members of the Divisional Executive that, pursuant to r 11(4) of the Division Rules, he was convening a meeting of the Divisional Executive on 21 May 2001 for the purpose of considering the resolutions of the Committee of Management of the Victorian Divisional Branch.  On the same day, however, the Committee of Management of the Victorian Divisional Branch met again.  It passed the following resolutions:

“1.       The Branch Committee of the Victorian Divisional Branch of the
            FFTS Union Division hereby resolves to rescind those resolutions
            passed by it at the Branch Committee meeting held on 3 April 2001
            which sought the holding of a referendum and directed the circulation
            of a petition for the holding of a referendum pursuant to Rule 15 of the
            FFTS Union Division Rules.

2.         Noting that the Victorian Divisional Branch of the FFTS Union
            Division constitutes a majority of the members of the FFTS Union
            Division.

            The Branch Committee hereby resolves pursuant to Rule 15 of the
            FFTS Union Division Rules that it wishes a referendum to be held on
            the following questions:

Question 1:

Should the Divisional Executive amend the FFTS Union Division
Rules as soon as possible by substituting the following for Rule 5(A)(2)?

            5(A)(2)(a)

            Divisional Branches having 500 financial members or less shall be
            entitled to one representative (“Divisional Conference Delegate”) on
            the Divisional Conference; more than 500 financial members but less
            than 1000 financial members two Divisional Conference Delegates;
            and one additional Divisional Conference Delegate for each additional
            500 financial members.

            5(A)(2)(b)

            As soon as possible after the certification of Rule 5(A)(2)(a), elections
            shall be held to fill any additional offices of Divisional Conference
            Delegate resulting from the application of Rule 5(A)(2)(a).  The
            Delegates so elected shall take office immediately upon the declaration
            of their election and shall hold office for a term equivalent to the
            balance of the term of the office of those Divisional Conference
            Delegates who took up their office on 2 January 2001.

            5(A)(2)(c)

            Upon the certification of Rule 5(A)(2)(a), no election for any positions
            on the Divisional Executive shall be held until after the completion of
            the elections referred to in Rule 5(A)(2)(b).

            5(A)(2)(d)

            In the event that the application of Rule 5(A)(2)(a) results in any
            Divisional Branch being entitled to less Divisional Conference
            Delegates than they were entitled to at the last election of such
            Delegates, that reduced entitlement shall not take effect until the
            expiration of the term of office of the current Delegates of that
            Divisional Branch.

            Question 2:

            Should the Divisional Executive as soon as possible insert the
            following Rule into the FFTS Union Division Rules?

            35A Branch Approval

            (a)        The provisions of this Rule take precedence over, and shall
                        apply notwithstanding anything contained in, any other of these
                        Rules.

            (b)        Without limiting the generality of sub-rule (a) hereof, the
                        provisions of this Rule shall prevail over the provisions of Rule
                        21(c) to the extent of any inconsistency.

            (c)        No decision of the Divisional Conference or of the Divisional
                        Executive which in any way affects the Victorian Divisional
                        Branch of the FFTS Union Division (including its officers and
                        members) shall have any effect at all in relation to the
                        Victorian Divisional Branch unless and until approved by a
                        majority vote of the Victorian Divisional Branch Committee of
                        Management taken within thirty (30) days of the relevant
                        Divisional Conference or Divisional Executive decision.”

73                  In early May 2001, a petition was circulated among the members of the FFTS Union Division.  The questions in the petition were stated in the following form:

“Question 1:

Should the Divisional Executive amend the FFTS Union Division Rules as soon as possible by substituting the following for Rule 5(A)(2)?

5(A)(2)(a)

Divisional Branches having 500 financial members or less shall be entitled to one representative (‘Divisional Conference Delegate’) on the Divisional Conference; more than 500 financial members but less than 1000 financial members two Divisional Conference Delegates; and one additional Divisional Conference Delegate for each additional 500 financial members.

5(A)(2)(b)

As soon as possible after the certification of Rule 5(A)(2)(a), elections shall be held to fill any additional offices of Divisional Conference Delegate resulting from the application of Rule 5(A)(2)(a).  The Delegates so elected shall take office immediately upon the declaration of their election and shall hold office for a term equivalent to the balance of the term of the office of  those Divisional Conference Delegates who took up their office on 2 January 2001.

5(A)(2)(c)

Upon the certification of Rule 5(A)(2)(a), no election for any positions on the Divisional Executive shall be held until after the completion of the elections referred to in Rule 5(A)(2)(b).

5(A)(2)(d)

In the event that the application of Rule 5(A)(2)(a) results in any Divisional Branch being entitled to less Divisional Conference Delegates than they were entitled to at the last election of such Delegates, that reduced entitlement shall not take effect until the expiration of the term of office of the current Delegates of that Divisional Branch.

Question 2:

Should the Divisional Executive as soon as possible insert the following Rule into the FFTS Union Division Rules?

35A Branch Approval

(a)        The provisions of this Rule take precedence over, and shall apply
            notwithstanding anything contained in, any other of these Rules.

(b)       Without limiting the generality of sub-rule (a) hereof, the provisions of
            this Rule shall prevail over the provisions of Rule 21(c) to the extent of
            any inconsistency.

(c)        No decision of the Divisional Conference or of the Divisional
            Executive which in any way affects the Victorian Divisional Branch of
            the FFTS Union Division (including its officers and members) shall
            have any effect at all in relation to the Victorian Divisional Branch
            unless and until approved by a majority vote of the Victorian
            Divisional Branch Committee of Management taken within thirty (30)
            days of the relevant Divisional Conference or Divisional Executive
            decision.”

74                  A large number of people signed the petition.  Each signatory’s name and (in most cases) membership number appear beside his or her signature.  Each signature is witnessed.  In most cases, the witnesses are officials of the Victorian Divisional Branch.  The signature of the witness and the witness’s name appear beside the signature of the signatory to the petition.  Finally, the date appears beside the name of the witness.  The petition was given to staff in the office of the Victorian Divisional Branch to check the financial status of the signatories.  It is not clear what the result of this process was.  The checking was done by reference to computer records, rather than by reference to the provisions of the Union Rules as to when a member is financial.  Occasional marks appear beside the names of some signatories on a few pages of a copy of the petition, but it is not clear what those marks signify.

75                  On 18 May 2001, solicitors acting for the applicant Skourdoumbis sent the petition to the respondent Findlay.  The petition was accompanied by a letter of that date, requesting a referendum in the terms the subject of the petition and adopted by the Committee of Management of the Victorian Divisional Branch on 8 May 2001. 

76                  On 21 May 2001, Mr Findlay was the only one who attended at the time and place appointed for the meeting of the Divisional Executive.  The proposed meeting therefore failed for want of a quorum. 

77                  The Divisional Executive did not meet until 4 December 2001 in relation to the proposed referendum.  On that date, the Divisional Executive resolved:

“This Divisional Executive meeting rejects the 8th May 2001 call for a referendum on the grounds that the proposed rule changes would be invalid as being inconsistent with the National Rules.”

78                  The request for a referendum contained in the resolution of the Committee of Management of the Victorian Divisional Branch of 3 April 2001 was the subject of the order sought pursuant to s 209 of the WR Act in matter no. V 281 of 2001.  As I have said, that order was not pressed.  It is therefore unnecessary to determine whether the resolution of the Committee of Management on 8 May 2001 was valid, so far as it purported to rescind the earlier resolution.  The proposal for a referendum contained in the resolution of the Committee of Management of the Victorian Divisional Branch of 8 May 2001, and contained in the petition, is the basis of the order sought pursuant to s 209 of the WR Act in matter no. V 636 of 2001.

79                  Various defences were raised to the application under s 209 of the WR Act in matter no. V 636 of 2001.  The first was that the Victorian Divisional Branch was barred by r 28(g)
of the Division Rules from making the request, because the Victorian Divisional Branch was “unfinancial”. 

80                  By an arrangement, said to have amounted to an agreement between the FFTS Union Division and the Victorian Divisional Branch, the Victorian Divisional Branch conducted the office of the FFTS Union Division.  The office of Divisional Secretary and the office of Divisional Branch Secretary of the Victorian Divisional Branch have been held by the same person throughout most, if not all, of the history of the FFTS Union Division.  For the bulk of the time, the one person was Lou Kyriacou, who has now retired from both positions (he seems to have relinquished the positions at different dates, although this is not clear).  His successor was the respondent Haritou.  There is current controversy, reflected in a proceeding in this Court, as to whether Mr Haritou has been validly dismissed from one or both of these offices.  Within the premises occupied by the Victorian Divisional Branch office and the office of the FFTS Union Division, there has not been any physical separation of the two functions. 

81                  It was of the practice of Mr Kyriacou, and subsequently of Mr Haritou, to make allocations as between the FFTS Union Division and the Victorian Divisional Branch of expenditure on various items.  The expenditure included the fees and travel expenses for an industrial relations consultant, who was engaged to provide services both to the Victorian Divisional Branch and to the FFTS Union Division (sometimes on behalf of other Divisional Branches).  There were also travel expenses, both for the industrial relations consultant and for the secretary.  For a considerable time, the accounts of the Victorian Divisional Branch have shown amounts owing by the FFTS Union Division Office to the Victorian Divisional Branch, as a result of these allocations.  Such amounts have been in excess of the sustentation fees payable by the Victorian Divisional Branch pursuant to r 28 of the Division Rules.  Because the balance has been in favour of the Victorian Divisional Branch, the view has been taken that it was unnecessary for the Victorian Divisional Branch actually to send any money by way of payment of sustentation fees pursuant to r 28 of the Division Rules.  Those sustentation fees were regarded as having been paid by setting them off against the greater amounts of expenses incurred by the Victorian Divisional Branch on behalf of the FFTS Union Division. 

82                  Early in the hearing of the consolidated proceeding, it seemed that some of the respondents proposed to allege that there had been a misallocation of expenses as between the FFTS Union Division and the Victorian Divisional Branch, and that this was the cause of the disqualification of the Victorian Divisional Branch from seeking any referendum under r 15.  There appeared to be dissatisfaction on the part of some of the respondents that the allocation of expenses had been done by the one person holding two offices.  I note that r 28(d) specifically permits the Divisional Secretary to disburse funds for certain purposes, including for expenses of management of the FFTS Union Division or for satisfying any debt to or of the Divisional office.  One cause of the dissatisfaction appears to have been that the industrial relations consultant engaged to do work both for the Victorian Divisional Branch and the FFTS Union Division was Mr Kyriacou’s daughter.  Neither the external accountants nor the auditors of the Victorian Divisional Branch appear to have detected any impropriety in the allocation of expenses.  In recent times, the Union has engaged accountants to conduct a special audit of the finances of the FFTS Union Division in respect of the years 1999 and 2000.  At the time of the hearing of this consolidated proceeding, the work had not been completed.  The accountant conducting the audit produced a document, which was tendered in evidence, showing a reconciliation of the “loan account” of the FFTS Union Division to the Victorian Divisional Branch for the year ended 31 December 2000.  This showed a debt of $168,707.95 by the FFTS Union Division to the Victorian Divisional Branch at that date, after taking into account sustentation fees.  This evidence confirms that there is a balance owing by the FFTS Union Division to the Victorian Divisional Branch, even after the setting off of sustentation fees payable pursuant to r 28.  The issue of the correctness of the allocations became a non-issue, as a result of this evidence. 

83                  The argument on unfinanciality of the Victorian Divisional Branch therefore came down to a question of a literal construction of r 28, especially subr (f)(2) and (g).  It was said that the requirement that Divisional Branches “shall pay sustentation fees” prior to particular dates required that a payment actually be made, by means of the transmission of a cheque.  The Macquarie Dictionary contains various definitions of the word “pay”.  The first is “to discharge (a debt, obligation, etc.), as by giving or doing something.”  The discharge of a debt by set off against a larger debt is well within the meaning of the word “pay”.  It has been held that a statutory obligation to pay at a particular time can be satisfied by payments made earlier than that time.  See Drake Personnel (New Zealand) Ltd v Taylor [1996] 2 NZLR 644 and Gladstone Milk Bar Ltd v Henning [1998] 3 NZLR 183.

84                  The meaning of a word is to be determined in the context of the rules in which it appears, having regard to the purpose for which it has been inserted.  The submission was made that the presence of the word “forward” in r 28(f)(1) showed that there had to be a specific act of forwarding sustentation fees by the due date.  In fact, the obligation to “forward” relates only to the returns dealt with in subpars (a), (b) and (c) of par (1) of the subrule.  There is no specific obligation to “forward” sustentation fees, only to “pay” them.  It was suggested that an act of transferring money would provide transparency as to whether a Divisional Branch had discharged its obligation.  In practical terms, the fact that the same person held the office of Divisional Branch Secretary for the Victorian Divisional Branch and Divisional Secretary for the FFTS Union Division made it difficult for counsel who made this submission to specify exactly what act would amount to the act of paying if it did not include the setting off of one debt against another.  It was difficult for him to describe what might amount to an act of paying, by one person to himself or herself in another capacity, that did not encompass the making of book entries setting off one debt against another.  In my view, no useful purpose would be served in the context of the rules by construing the word “pay” in r 28(f)(2) as requiring the actual transfer of cash or a cheque.  The obligation to pay by a particular date is easily seen to be satisfied if there is a setting off of debts and if, at that date, the party obliged to pay a particular debt is owed a greater debt by the other party.

85                  Even if r 28(f)(2) were to be construed as requiring a specific act of payment, that would not be conclusive as to the construction of r 28(g).  That subrule operates if a Divisional Branch allows its sustentation fees “to remain unpaid” for longer than three months after the time at which they became due to be paid.  It is one thing to say that a specific act of payment is required.  It is another to say that a debt is allowed to remain unpaid in the absence of such a specific act when there is no indebtedness.

86                  For these reasons, I am of the view that it would not have been open to the Divisional Executive to refuse to conduct a referendum as requested by the Committee of Management, or the members, of the Victorian Divisional Branch on the ground that the Victorian Divisional Branch was barred by r 28(g) from voting on any question affecting the FFTS Union Division.  I am assuming that the words “eligible to vote on any question affecting the Division” are wide enough to encompass a vote by the Committee of Management of the Victorian Divisional Branch to request the conduct of a referendum under r 15.  It is unnecessary to decide that question.  Nor would it have been open to the Divisional Executive to refuse to hold a referendum on the ground that the members of the Victorian Divisional Branch would not be eligible to vote in a general ballot of the members of the Division.  Even if the Victorian Divisional Branch had fallen foul of r 28(g), that would not be a ground for refusing to conduct a referendum if one were requested by more than 10 per cent of the financial members of the FFTS Union Division, in accordance with r 15.  Rule 28(g) does not visit the default of the divisional branch upon its members other than by disqualifying them from voting in a general ballot of the members of the FFTS Union Division.  If 10 per cent of the members of the FFTS Union Division validly requested a referendum, the Divisional Executive would be obliged to conduct one, even if the members of a particular divisional branch were ineligible to vote.  It might also be noted that the ineligibility of the members to vote in such a ballot might give rise to a possible contravention of s 196(c) of the WR Act, although the question was not argued in the present case.

87                  It was then argued that, for the applicant Patti to succeed in relation to the petition of the members of the Victorian Divisional Branch, it was necessary for him to establish that those who have signed the petition were financial members, as well as that they constituted not less than 10 per cent of the financial members of the FFTS Union Division.  As can be seen from the definition of “financial member” in r 5 of the Union Rules, and from the provisions of r 8(ii) of the Union Rules, any arrears of entrance fees, contributions, levies or fines is sufficient to cause a member to be unfinancial and to deprive that member of rights and benefits otherwise available under the rules.  In the light of the provisions of r 8(ii) of the
Union Rules, so much of r 18 of the Division Rules as allows a member to be in arrears for one quarter before becoming unfinancial must probably be disregarded.

88                  Mr Patti’s evidence was that the Committee of Management of the Victorian Divisional Branch, apparently in the exercise of the powers given by r 17 of the Division Rules, has made provision for the collection of contributions in three different ways.  Some members pay every six months, some every quarter and some by regular payroll deductions, which are intended to be processed every month.  When contributions are received in the office of the FFTS Divisional Branch, the office staff issue cards to those shown by the computer records as being financial members, ie to those whose contributions have been brought up to date.  In some cases, such as when the contributions are collected by organisers and not banked immediately, or when payroll deductions are not forwarded at the end of the month, members would be shown as unfinancial until the receipt of the contributions was recorded in the computer.  Thus, there may be people who are financial according to the rules, but would be shown as unfinancial in the computer records. 

89                  The petition bore the membership numbers of almost all of the persons who signed it, indicating that they had current membership cards when they signed.  The evidence is that their financial status was checked in the Divisional Branch office.  There is in evidence a copy of each page of the petition, with notes made in the margin beside a few of the names.  This is an indication that the great majority of the names were found to be financial when checked against the computer records.

90                  The number of signatures appearing on the petition is 1386.  Even on the assumption that the financial membership of the FFTS Union Division was as high as 10,000 on the date when the petition was forwarded, and even allowing for a significant number of errors as to the financiality of those who signed, the probability is that the signatories constituted at least 10 per cent of the financial members of the FFTS Union Division.  There was nothing in the evidence that indicated any systemic error that would have ruled out a large number of those who signed.  This is not a case in which a right to check the financial status of each person
who signed the petition was asserted by the Divisional Executive.  Compare Kingham v Sutton [2002] FCA 506.

91                  Thus, in terms of r 15 of the rules of the FFTS Union Division, a referendum was requested by the Divisional Branch whose membership constitutes a majority of the members of the FFTS Union Division and also by a petition signed by not less than 10 per cent of the financial members of the FFTS Union Division.  The question remains whether the subject matter of the proposed referendum fell outside the power, or the obligation, of the Divisional Executive to take a referendum.  Although the express resolution of the Divisional Executive declining to hold a referendum referred to inconsistency between the proposals and the rules of the Union, this issue was not pursued.  Rather, the argument that the Divisional Executive had no obligation, or power, to hold a referendum as requested turned on the question of implied limitations in r 15.

92                  It is relatively easy to see that r 15 must be subject to some implied limitations.  The fact that the referendum rule appears in the context of the functions of the Divisional Executive of the FFTS Union Division is indicative that it is not intended to relate to every possible subject matter.  An absurd example is a sufficient illustration.  The Divisional Executive would not be obliged to put to the vote a referendum proposal that there should be more humour in the world.  The subject matter must obviously pertain to the affairs of the FFTS Union Division and to the concerns of its members as members.

93                  It is a short step from this proposition to recognising that the Divisional Executive is not bound to put to a referendum a proposal that would result in a contravention of the WR Act.  That is what it was asked to do in the present case. 

94                  It is plain that the proposed amendment to r 5(A)(2) would result in the Victorian Divisional Branch gaining complete control of the FFTS Union Division if voting on the Divisional Conference were to be along branch lines.  Unless some significant change occurred in the membership of the various Divisional Branches, the smaller Divisional Branches would have no voting power if they perceived their interest to differ from those of the Victorian Divisional Branch.  Such a provision would result in a contravention of s 196(c) of the WR Act, on the application of the principles laid down in McLeish v Kane and subsequent cases.  It is true that there has not yet been a case in which it has been held that representation strictly in accordance with branch numbers amounts to such a contravention.  This is because, as far as I am aware, there has been no case to date in which one branch has had such a substantial majority of the overall membership as has the Victorian Divisional Branch of the FFTS Union Division membership.  In the light of s 196(c), it cannot be supposed that the entire disenfranchisement of the majority of branches could be countenanced.  This is what the proposed new r 5(A)(2) would bring about.

95                  The proposed new r 35A suffers from the same defect.  If adopted, it would disenfranchise all of the Divisional Branches except the Victorian Divisional Branch in relation to any decision that could be described as in any way affecting the Victorian Divisional Branch, its officers or its members.  Plainly, this would cover a very large proportion of matters on which the Divisional Executive could be expected to make decisions.

96                  I am therefore of the view that the Divisional Executive was not obliged by r 15 of the Division Rules to take a referendum of the members of the FFTS Union Division on the proposals put forward by the Victorian Divisional Branch Committee of Management or the petition.  In my view, r 15 of the Division Rules is subject to an implied limitation, so that it does not oblige the taking of a referendum in respect of a matter that would be beyond the competence of the FFTS Union Division to adopt.  Such a matter would include the adoption of rules which would give rise to a contravention of s 196(c) of the WR Act.  The referendum proposals, if adopted, would give rise to such a contravention.

97                  It was clear that what agitated the applicants to a considerable extent was the imminent demise of the FFTS Union Division.  The transitional rules in r 42 of the Union’s Rules make provision for a restructuring.  As subr (xii)(a) shows, it was contemplated that the FFTS Union Division would cease to exist in 2001, eight years after the date of effect of the amalgamation which led to its creation.  It is clear that subr (xiii) was added at a later time.  It provides that the FFTS Union Division may have a separate existence for a period of up to four years beyond the expiration of the eight year period referred to in subr (xii).

98                  According to the argument put by counsel for the applicants, the applicants have taken the view that the effect of subr (xiii) was to substitute a twelve year period for the eight year period specified in subr (xii).  In particular, they took the view that the provision under which the eight year period could be shortened only with the agreement of the Divisional Executive of the FFTS Union Division, found in subr (xii)(a), was applicable to the four year period found in subr (xiii).  Counsel for the applicant also drew attention to r 25(d) of the Union Rules, which he said constituted a bar to the abolition of any division without the approval of that division.  The concern of the applicants was that, in its present unrepresentative state, the Divisional Conference, or the Divisional Executive elected by and from it, would give approval to the abolition of the FFTS Union Division, contrary to the wishes of the members of the Victorian Divisional Branch.  It is for this reason that the new r 35A was proposed.

99                  In my view, these concerns are based on a misunderstanding of the effect of the transitional provisions.  Those provisions themselves require that the FFTS Union Division cease to exist.  Plainly, they override r 25(d).  The initial period of eight years within which the restructuring was to occur must have proved insufficient for its details to be finalised.  This is the obvious reason for the adoption of subr (xiii).  That subrule commences with very clear exclusionary words, “Notwithstanding the provisions of this Rule 42 or any other rule of the Union”.  The effect of these words is to make subr (xiii) predominant.  The rest of the first sentence of subr (xiii) is in permissive terms.  The FFTS Union Division “may” have a separate existence for a period of “up to four years” beyond the expiration of the eight year period referred to in subr (xii).  The following sentence makes it clear that the restructuring is to proceed in accordance with subr (xii).  Subrule (xii)(a) provides that if no agreement was reached by the end of the eight year period, then, notwithstanding any other rule of the Union, the National Executive was required to determine the changes necessary to effect the restructuring, including any and all rule changes for it.  Those provisions are preserved by the second sentence of subr (xiii).  It is therefore not the case that the FFTS Union Division is given by the Union Rules a guaranteed existence for the whole of the four year period up to 26 March 2005, and can only be abolished for the purpose of restructuring within that time with its consent.  Rather, the restructuring and consequent abolition of the FFTS Union Division are ordained by subr (xii) and can be put into effect by the National Executive of the Union at any time within the four year period.  All that is necessary is for the National Executive to exercise the power given to it by subr (xii) to make any decisions necessary to effect the restructuring, including any changes to the Union Rules.  If such decisions and changes to the rules were to take effect within the four year period expressed in subr (xiii), this would not involve a contravention of any of the Union Rules to which my attention has been drawn, and particularly of r 42(xiii).  For this reason, the proposed new r 35A of the Division Rules would be ineffective to achieve the object desired by the applicants.

100               For these reasons, it is necessary to discharge the whole of the rule to show cause granted in matter no. V 636 of 2001.  For the reasons I have given earlier in these reasons for judgment, pars 1, 2 and 3 of the rule to show cause granted in matter no. V 281 of 2001, which sought orders pursuant to s 209 of the WR Act, should also be discharged.

Associate:

Dated:              21 May 2002