FEDERAL COURT OF AUSTRALIA

Butler v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2012] FCA 790

THE COURT ORDERS THAT:

1.    Leave be granted to Troy Gray to intervene in the proceeding.

2.    Until the hearing and determination of this application or further order the respondent, by itself, its servants or agents, be restrained from convening and/or holding a meeting, by any method, of the Divisional Council of the Electrical, Energy and Services Division of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

3.    The proceeding be adjourned for a directions hearing before the docket judge, such date to be determined by consultation between the parties (including the intervener Troy Gray) and the chambers of the docket judge.

4.    The parties (including the intervener Troy Gray) have liberty to apply on 3 days' notice.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1        This is an application for interlocutory relief. The interlocutory order that is sought is that pending the determination of the substantive application in this proceeding or until further order of the Court, the respondent, by itself, its servants or agents, refrain from convening and/or holding a meeting, by any method, of the Divisional Council of the Electrical, Energy and Services Division (the Federal Division) of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU).

2        The interlocutory application is brought in the context of the substantive proceeding which, in effect, seeks an order pursuant to s 163 of the Fair Work (Registered Organisations) Act 2009 (Cth) (the Act); in particular, that rule 7.3.3 of the Rules of the Electrical, Energy and Services Division (the rules) of the CEPU contravenes s 142 of that Act as the rule imposes upon members of the CEPU conditions, obligations or restrictions that are oppressive, unreasonable or unjust.

BACKGROUND

3        In order to understand the context in which both the substantive proceeding and the interlocutory application are brought, it is necessary to refer to the decision of Perram J in Gray v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2012] FCA 380, the reasons for decision in respect of which were published by his Honour on 17 April 2012. It is not necessary for me to explain the details of the decision other than to note that, insofar as relevant to the present matter, in the course of resolving the dispute Perram J observed at [35] of his reasons for decision that the difficulties which had been thrown up by the case before him could now be seen in clearer outline, and as follows:

If the 15,000 or so members of the Federal NSW Branch [the NSW Branch of the Federal Division of the CEPU] have not paid their dues to the Federal NSW Branch but to the State Union [the Electrical Trades Union of Australia, New South Wales Branch] (a factual matter to which I turn below) and are therefore exempted from having to pay dues by r 5.2.6 then, although they will be financial members and entitled to take part in a plebiscite under r 17.1 and the election of the Divisional Secretary and Assistant Secretary under rr 9.4.1 and 9.5.1, they will not be counted under r 7.3.3. The immediate consequence is that the members of the Federal NSW Branch, regardless of their number, will be entitled to elect only one delegate to the Divisional Council (r 7.3.2) but this delegate will have no votes at Divisional Council (r 7.4.1); they will be entitled to be represented by one person on the Divisional Executive and that person will be entitled to vote (r 8.2).

4        Suffice to say that subsequently Perram J found that, in fact, membership fees were paid to the State Union rather than to the Federal NSW Branch. The consequence of the decision is that if this be correct then in accordance with [35], the 15,000 or so members of the Federal NSW Branch are not counted for voting purposes under rule 7.3.3 of the rules. Rule 7.3 provides a mechanism by which divisional branch delegates to the Divisional Council (the Divisional Council being the supreme governing body of the federal organisation) shall be elected. The crux of the matter is that in rule 7.3.3, for the purpose of determining the number of members of a Divisional Branch at meetings of the Divisional Council, which governs the potential number of Divisional Council delegates, the receipts of such divisional branch for the preceding year from entrance fees and contributions are to be divided by a particular dollar amount. However, as Perram J found, there were no relevant receipts in relation to the members of the Federal NSW Branch because the State Union, rather than the Federal Division, received the relevant fees.

5        In accordance with the rules, there is to be an annual meeting of the Divisional Council. Rule 7.5.1 provides that:

The Divisional Council shall meet annually, either during the week commencing on the fourth Monday in July or at any time determined by an affirmative vote of two-thirds of divisional executive members.

6        In the present case, the evidence before me is to the effect that it is intended to hold the meeting of the Divisional Council on 23 July 2012. Under rule 7.5.2, the first order of business of the Divisional Conference is the election of divisional executives in accordance with the rules governing elections.

7        The application for interlocutory relief is supported by affidavit material. The application is brought by Mr Steven Butler, who, according to his affidavit, is a member of the CEPU, and he is also the branch secretary and secretary of what he describes as the T&I, which is the State Union, having been elected to those two positions in March 2012. Mr Butler explains in his affidavit that pursuant to the national rules the CEPU, being the organisation registered pursuant to the Act, is divided into three divisions, one of which is the Electrical, Energy and Services Division. Pursuant to divisional rules, the division is further divided into branches, being the New South Wales and Australian Capital Territory branch, the Queensland and Northern Territory branch, the South Australian branch, the Tasmanian branch, the Victorian branch and the Western Australian branch. As is plain from the divisional rules, which are also in evidence, the supreme governing body of the division is the Divisional Council. In between meetings of the Divisional Council, the divisional executive is vested with certain powers of the Divisional Council to ensure the running of the division.

8        The decision of Perram J makes good paragraph 9 of Mr Butler’s first affidavit, which discloses that pursuant to an arrangement between the CEPU, the Federal NSW Branch and the T&I, members in NSW and the ACT are eligible to belong to both the branch and the T&I, and they pay one membership subscription, which was collected by the T&I and banked into a pool fund. The fund was used to pay the day-to-day operational and administrative costs of both the branch and the T&I, including the payment of what is known as sustentation fees payable to the CEPU by the branch, and at the end of each financial year any surplus was divided between the branch and the T&I on an agreed formula. According to paragraph 10 of Mr Butler’s first affidavit, and as is demonstrated by other evidence before me, the members who paid membership subscriptions in this manner were for all purposes treated as financial members of both the CEPU and the T&I. The practical consequence of the decision of Perram J is that those persons will no longer be treated as financial members of the CEPU and, accordingly, the elections that are proposed to take place would take place on the basis that their financial membership is not counted in order to determine the required number of delegates.

9        After the decision of Perram J, the evidence discloses that two steps in particular were taken in an attempt to rectify the situation, at least from the point of view of the Federal NSW branch and the Federal Division. Perram J allowed for this possibility because his Honour adjourned the proceeding pursuant to s 163(5) of the Act in order to permit the respondent, being the CEPU, to alter its rules so as to comply with s 142(1)(c) of the Act. Although Perram J’s decision related to a different rule, the opportunity was also taken to attempt to rectify the position in which the NSW members were left by proposing an amendment to the rules. However, consistent with the decision of Perram J, the NSW members in substance were not given voting rights and, accordingly, the proposed amendment to the rules was defeated.

10        The second step that was taken was that an agreement was entered into on 15 June 2012. This agreement was intended to ensure that the arrangements in relation to the payment of fees to the Federal NSW Branch would not have the effect of meaning that there were no receipts within the meaning of rule 7.3.3. The agreement was between T&I and the Federal NSW Branch, the most important provision of which for present purposes at least is clause 6, which provides that “the T&I undertakes to collect as a collector for the branch entrance fees and subscriptions for joint members and to pay those entrance fees and subscriptions to the branch”, otherwise, under clause 3, “[t]he T&I will not collect for itself entrance fees or subscriptions from a Joint Member for the period that a Joint Member maintains his or her financial membership of the CEPU, is attached to this branch and this agreement remains in place”. It might be thought that this agreement, in effect, solved the problem with which the Federal NSW Branch was confronted, but that is not so because of the wording of rule 7.3.3 which specifically refers to “the receipts of such divisional branch for the preceding year from entrance fees and contributions”. Consistent with Perram J’s decision, there are no such receipts for the preceding year pursuant to the agreement. At best there will be such receipts for the year looking ahead from the date of the agreement of 15 June 2012. In other words, the agreement may well have the effect of resolving the problem from 15 June 2013 onwards, but has no impact on the situation as it presently exists and will exist as at the date of the proposed meeting on 23 July 2012.

11        There is evidence that the CEPU, which has apparently taken legal advice on the effect of Perram J’s decision, intends to act in accordance with the decision, the practical consequence of which is that the NSW members, who have paid dues to the State branch, will not be counted for the purpose of working out Divisional Council delegates. This will occur, although it is also apparently the case that the Federal NSW Branch takes a different view of the legal and practical consequences of Perram J’s decision.

12        In this regard, the only order which Perram J has made is for an adjournment of the proceedings and those proceedings are listed before Perram J again on 17 July 2012. It is also apparent that an application for leave to appeal and an appeal against the decision of Perram J has been listed for hearing before the Full Court on 17 August 2012. In these circumstances, according to Mr Butler, assuming that the same position is taken in relation to the effect of Perram J’s decision, the Federal NSW Branch will not be entitled to any votes at the meeting and I infer that, as the elections are the first item of practical business on the agenda, the elections will take place without the involvement of the Federal NSW Branch. Mr Butler describes this as a result of Perram J’s decision, which has a legal effect contrary to what Mr Butler described as a “long established belief” that the arrangements which were in place meant that the receipts by the State Union were receipts of the divisional branch, as provided for in rule 7.3.3. The effect is described by Mr Butler as leading to a situation where some 15,000 of the approximately 50,000 total membership of the CEPU, or about 30 per cent, will be disenfranchised for at least 12 months, even though in fact they have paid union dues.

13        Mr Butler also notes that the Federal NSW Branch has itself contributed approximately $16 million to the Federal Division by way of capitation fees over a lengthy period of time. In his second affidavit Mr Butler noted that the meeting of the Divisional Council, which is planned to be held at Jupiter’s Hotel in Townsville over three days, will be expensive to organise and conduct and it is his understanding that it will cost in the order of $50,000 of members’ money to hold the meeting. Mr Butler expressed the view that this is a significant amount of members’ money, and as he put it:

To incur that expense in circumstances where members of the Branch being the largest or second largest branch of the Division, will have no, or negligible representation, (one delegate instead of 28 delegates) and no vote, demonstrates the oppressive nature of the rules as they are currently being applied by the Division.

THE APPLICATION

The respondent

14        The present case is somewhat unusual in that the respondent union is in fact not a contradictor to the claim for interlocutory relief or, as I understand it, the substantive proceeding. The respondent has filed an affidavit of Mr Peter Tighe, who is the National Secretary of the CEPU and Divisional Secretary of the CEPU Electrical Division. In his evidence Mr Tighe also describes the process by which it was sought to amend the rules and by which the proposed amendment was defeated. In paragraph 49 of his affidavit Mr Tighe says that:

If the view of the Victorian and Western Australian Branches is given effect, this will prevent the participation of the NSW Branch in the governance of the division. If the NSW Branch can no longer participate in the affairs of the Division, then over 17,000 financial members are left unrepresented on the supreme governing body of the Division.

15        At paragraph 54 Mr Tighe says that, in his opinion:

…if the Council Meeting proceeds on 23 July in circumstances where there will be debate about the right to vote and anticipate then there is a real danger that the meeting will be a shambles. This could have the effect of bringing the union into disrepute amongst the membership at a time when, and in an environment where, the membership is very concerned to see proper governance and leadership from its elected officials.

16        Mr Tighe also noted that the budget for the upcoming meeting of the Divisional Council includes items for accommodation, the conference venue and flights and that he estimates the total cost to the Division, including all of the branches, of holding the Divisional Council meeting will be approximately $40,000.

17        In the proceeding I gave leave to Mr Gray, the applicant in the proceeding before Perram J, to intervene, and he has done so. Mr Gray has filed evidence and made submissions against the granting of the interlocutory order as sought. Mr Gray is a member of the Victorian branch of the Federal Division of the CEPU.

Prima facie case

18        The first submission which is made on behalf of Mr Gray is that the interlocutory order sought is misconceived as a matter of law and must therefore fail because the order is sought to be made against the union itself, when it is not the union that holds the meeting but rather the members of the union who hold the meeting. It seems to me that, as has been put to me by the applicant and the respondent in the proceedings, not only is the Divisional Council an organ of the union, but the Divisional Secretary, being the person who convenes the meeting, is an agent of the union. Although Mr Tighe has offered to be joined to the proceeding and himself to be enjoined in order to ensure the efficacy of any order that might be made, it seems to me that this is unnecessary and that the order in terms proposed, which is for restraint of both the respondent, its servants and its agents is, and should be, legally efficacious and this alone is not a reason why the application should fail.

19        The second submission that is put by or on behalf of Mr Gray relates to the ordinary requirements for the making out of a prima facie case or serious question to be tried and the balance of convenience. In this regard, I should make mention of the statutory provisions which are invoked in this case. Section 163 of the Act provides relevantly as follows:

(1) A member, or an applicant for membership, of an organisation may apply to the Federal Court for an order under this section in relation to the organisation.

(2) If the application is made by a member, the order under this section may declare that the whole or a part of a rule of an organisation contravenes section 142 or that the rules of an organisation contravene section 142 in a particular respect.

…

(10) At any time after a proceeding under this section has been instituted, the Court may make any interim orders that it considers appropriate in relation to a matter relevant to the proceeding.

In the present case there is an application under s 163 and, in substance, this is an application for an interim order.

20        Under s 142(1)(c) the rules of an organisation, relevantly, “must not impose on applicants for membership, or members, of the organisation, conditions, obligations or restrictions that, having regard to Parliament’s intention in enacting this Act (see s 5) and the objects of this Act and the Fair Work Act are oppressive, unreasonable or unjust”. Under s 141(1)(b) the rules of an organisation must provide for, relevantly, (i) the powers and duties of the committees of the organisation and its branches, and the powers and duties of holders of offices in the organisation and its branches; and (ii) the manner of summoning meetings of members of the organisation and its branches, and meetings of the committees of the organisation and its branches. In terms of the objects of the Act, s 5(3) in particular is relevant. Section 5(3) provides that the standards set out in the Act encourage members to participate in the affairs of organisations to which they belong (s 5(3)(b)), encourage the efficient management of organisations and high standards of accountability of organisations to their members (s 5(3)(c)), and provide for the democratic functioning and control of organisations (s 5(3)(d)).

21        In Mr Gray’s submission there is no serious question to be tried or prima facie case, in that it could not be said, on any view, that rule 7.3.3 contravenes s 142(1)(c). In this regard I was taken to two decisions which relate to the oppressive, unreasonable or unjust formula, as it appears in that section and predecessor sections.

22        In Municipal Officers’ Association of Australia v Lancaster (1981) 54 FLR 129 Deane J (in this Court as he then was) observed that (at 164-165):

The constraints and restrictions imposed, by positive and negative requirements of the Act and regulations, upon the freedom of the members of an organisation to select, for themselves, the rules which they consider appropriate for their particular organisation, are real and significant. It cannot, however, be too strongly stressed that, subject to those constraints and restrictions, the content of the rules of a registered organisation is primarily a matter for the members.

    At 165 his Honour said that:

Those three words [oppressive, unreasonable or unjust] are used objectively in the clause and each of them is to be given its ordinary strong meaning. Plainly, their meanings overlap and definition is liable to adulterate the strength which the words possess. Nonetheless, it seems desirable that I indicate the meanings which I ascribe to them. To be oppressive, a condition, obligation or restriction must be burdensome, harsh and wrongful. To be unreasonable it must be immoderate and inappropriate. To be unjust it must be contrary to right and justice and to ordinary standards of fair play.

23        I was also taken to the decision in Doyle v Australian Workers’ Union (1986) 12 FCR 197 at 205 where the observation was made that:

The primary justification for the existence of a rule of an organisation is simply that the organisation has adopted that rule…The Act assumes that the rules of an organisation may impose conditions, obligations or restrictions which are not oppressive, unreasonable or unjust. The mere imposition by the rules of conditions, obligations or restrictions is not evidence that those conditions, obligations or restrictions are oppressive, unreasonable or unjust.

24        For Mr Gray it was submitted that rule 7.3.3 is fair on its face. It applies to all members. It is not discriminatory on its face and, accordingly, there is no serious question to be tried. The difficulty with this submission, it seems to me, is that it incorrectly assumes that the content of the rules is not contestable. In the present case it may well be that the rule as it was previously apparently construed by the CEPU is in no way oppressive, unreasonable or unjust. This case arises because of the recent decision of Perram J which has indicated that a different construction of the rule is required, being a construction different from that which, as I understand it, has long been held by the union and the branches other than perhaps Mr Gray and the interests he represents over the last 12 or more months. It is not possible to look at rule 7.3.3 and conclude that it is patently not oppressive, unreasonable or unjust merely because on its face it makes no discrimination between different branches. The question of oppression, unreasonableness or unjustness must involve a practical consideration of the substantive effect of the rule, not merely in isolation but in the context of the rules as a whole. Moreover, it would be surprising if the substantive questions were to be answered by reference to the form of the rule as opposed to its substance. It is also not possible, as it seemed to have been suggested for Mr Gray, to assess rule 7.3.3 against the statutory standard in s 142(1)(c) leaving aside the current situation the Federal NSW Branch finds itself in. The effect of this would be to reduce the position of a NSW member to the equivalent of a person who simply has not paid their dues at all, but in the present case, that is not so. Dues have been paid. It is simply a question whether the dues having been paid, as they were in fact paid, was sufficient or not to trigger rule 7.3.3.

25        Perram J held that the mechanisms for payment did not trigger the rule on its proper construction, and there is no doubt on the evidence that this, irrespective of the foreshadowed appeal, involves a radical departure from what the CEPU and its branches previously considered to be the case and the assumption on which they previously operated. In these circumstances, it seems to me to be clear that there is a strong prima facie case and therefore a serious question to be tried. I say this on the basis that these proceedings themselves assume the correctness of Perram J’s decision, and it is only on this assumption that the proceeding makes sense. It is on this basis that the effect of rule 7.3.3, in particular the reference to receipts in that rule, would have the consequence – and no one denies that this would be the consequence – of effectively disenfranchising some 15,000 or so persons who paid their membership believing that they were doing so on the basis that they would thereby be entitled to voting rights in accordance with the rules. Accordingly, I am satisfied as to the existence of the prima facie case and a serious question to be tried.

Balance of convenience

26        In terms of the balance of convenience, there was reference in the submissions for Mr Gray to the issue of delay. In short, Mr Gray’s proceedings were commenced in March or April of last year and, in this sense, it is said that both the applicant and, indeed, the respondent in the current proceeding have been on notice of the issue and could have taken steps long ago to ensure that the present situation did not arise. Even if this is the correct characterisation of the facts, there is no avoiding the situation that there is a meeting scheduled for 23 July 2012 in circumstances where, if the meeting is permitted to proceed, the NSW membership will effectively have no vote.

27        In addition, it seems to me that the scope of the dispute in the proceedings before Perram J related to different rules and that the issue about rule 7.3.3 arose somewhat tangentially, but nevertheless the consequence that we are faced with today is a direct result of the construction of rule 7.3.3 which his Honour found to be correct. Perram J’s decision was only delivered on 17 April 2012. His Honour gave an opportunity to the respondent to try to sort the situation out itself by altering the rules, but that has not proved possible. I am not satisfied that there has been any relevant delay and, even if there had been, in the present circumstances I would not see it as a disentitling factor.

28        It was also said for Mr Gray that the position of the Federal NSW Branch is a position of its own making. In short, Mr Gray submitted that the Federal NSW Branch managed to obtain some benefit not available to other branches by ensuring that fees were paid directly to the State Union rather than to the Federal NSW Branch and that, accordingly, the fees thereby escaped the control of the CEPU itself and Divisional Council in accordance with the rules, and thus the current situation is simply a consequence in one sense of the Federal NSW Branch and the State Union having sought to both have and eat their cake. It is not apparent to me that this is so, given the historical conduct of the union and where the situation in relation to the Federal NSW Branch and the State Union seems to have been relatively long standing.

29        Even if the situation can be characterised as being one of the Federal NSW Branch’s own making, there nevertheless seem to me to be powerful factors in the present case indicating that there is a need to preserve the status quo by postponing the meeting of the Divisional Council, which I shall come to. The bottom line in terms of the issue being of the Federal NSW Branch’s own making is that what the evidence does clearly establish is that the current position, where a meeting is proposed to take place on 23 July 2012 at which the NSW membership will in effect not have voting rights, represents a radical departure from the previous position. It also seems to be obvious from the evidence that whatever interests Mr Gray represents will thereby be given an opportunity to take advantage of that radical change in circumstances. Given that the first agenda item is voting rights, that could lead to a situation where the control of the union is seriously distorted in terms of voting, the effect of which might continue for the best part of a year or may otherwise be resolved by the resolution of the appeal.

30        It was also said that the Federal NSW Branch and the State Union were in some way hedging their bets by the 15 June 2012 agreement. It was said that the agreement is questionable in that, in effect, the same parties are on both sides of the agreement and one of the purported parties have no separate legal existence. In any event, in addition it was said that the provisions themselves do not suggest a genuine commercial arrangement because there is a lack of meaningful machinery provisions, and the agreement, for example, is terminable at any time and no evidence exists of any steps taken in reliance on the agreement. The difficulty with this submission is that on this interlocutory application the agreement should be taken at face value. It is an executed document. It provides for payments to be taken by one body as an agent for another body, and it also provides for the state body, the T&I, to give up any rights it would have otherwise had to collect its own dues. In these circumstances, I cannot see any reason other than to accept the 15 June 2012 agreement at face value. Moreover, there would be no incentive for the bodies involved to do other than attempt to put in place a proper and genuine arrangement in order to address the perceived practical difficulty caused by the proper construction of rule 7.3.3. The parties involved had every interest in ensuring that they did enter into an agreement which would effectively redress that issue.

31        Reference was made to the proposed rule change itself being discriminatory with inadequate notice apparently given to Mr Gray of the meeting. Again, it is not possible to finally determine any of those issues or concerns of Mr Gray. Suffice to say for present purposes that the fact that the proposed rule change was defeated in circumstances where the NSW membership was excluded from voting rights seems to me itself to demonstrate the real issues of concern which have prompted the present urgent application. It was also said that the concerns that had been raised were exaggerated. For example, there was a meeting to vote on the 15 June 2012 agreement which did not apparently result in a shambles and Mr Gray himself was in much the same position at a meeting which occurred in November 2011 when he objected to the Federal NSW Branch delegates being voted in.

32        I cannot accept these submissions. As I have said, the meeting in relation to the 15 June 2012 agreement occurred by correspondence, and there was limited opportunity for the type of dispute which might be expected if the meeting on 23 July 2012 is to proceed. More importantly than that, however, the fact is that the result of that meeting by correspondence was a result based on exclusion of the New South Wales membership. I also accept that there is no real comparison between the position that applied in November 2011 in respect of Mr Gray’s objection being defeated or overruled, and the position that is likely to arise if the 23 July 2012 meeting is permitted to proceed.

33        It was said that it is important to allow the Divisional Council to meet as it performs important functions as the supreme governing body. The agenda contains important items like the finance reports which are required to be submitted to Fair Work Australia and, although the Divisional Executive will remain in existence in order to perform the day-to-day functions as required, the Divisional Executive is a different and smaller body intended to be subject to the control of the Divisional Council. At one level, I accept these submissions. Obviously it would be desirable if the Divisional Council could meet and those functions be performed. The problem in the present case is that there is a potential for substantial distortion of the intended democratic process which should inform the ultimate control of the union’s affairs.

34        The final point that was put to me was that anything that occurs in the July 2012 meeting, if ultimately found to be invalid, can effectively be undone. That is, there is no irreparable harm, but if restrained improperly or inappropriately the proper governance of the union would be impeded. This is a valid consideration, but I accept the submission that has been put to me by the respondent that in a case such as the present, prevention is better than cure (Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 at [52]). As I understand it from the evidence and the rules, in this case the power of governance of the union will be in the Divisional Executive and, therefore, necessary day-to-day functions can continue as appropriate pending resolution of the present proceedings. I have also seen the agenda for the 23 July 2012 meeting and accept that it is not apparent from the face of the agenda that apart from the issue of voting, which I have found would be potentially affected by substantial distortion if the meeting were permitted to proceed, there is not otherwise urgent business on the agenda, nor has any such business been raised by individual branches.

35        Apart from the obvious fact that a restraint of the holding of the meeting will prevent voting going ahead, it is not apparent from the evidence that there will be any prejudice to any person, including third parties, by the reason of the making of the order as sought. On the other hand, as has been put to me, there is no dispute that the 15,000 or 17,000 or so NSW members are actual members of the Federal Division. The issue is not their membership. It is the non-receipt of fees which has led to the situation where on the proper construction of rule 7.3.3 they will not be counted for voting purposes, and that this is a change from the basis of the union’s organisation for perhaps up to 50 years or so.

36        In these circumstances, it seems to me that although I accept that I would not lightly postpone the democratic process that is contemplated by the union’s rules, the difficulty in the present case is that it is that very democratic process itself which is threatened to be undermined by the carrying out of the meeting in the present circumstances because the voting would take place on the basis that about 30 per cent of the membership of the union, albeit apparently non-financial membership, would be disenfranchised for voting purposes.

37        It has also been pointed out to me that under rule 7.5.1 of the rules there is a capacity for the union itself to defer the meeting to any time if determined by an affirmative vote of two-thirds of divisional executive members, the consequence of which is that the date of the meeting is not set in stone. Of the six branches the evidence shows that four of the branches were content to defer the meeting and that the Victorian and Western Australian branches did not wish to do so. I am satisfied that the effect of the postponement as sought will be to preserve the status quo and to avoid a potentially dysfunctional and invalid meeting which will cost union members, if it occurs, some $40,000-$50,000. It will also avoid the potential for substantial distortion of the democratic process intended not only by the applicable legislation, but by the union’s own rules, the effect of which, if it occurred, would potentially bring the union into disrepute.

38        In terms of the undertaking as to damages, no undertaking is offered. None is sought by the respondent. I accept the submission that pursuant to s 163(10) of the Act there is a question whether any undertaking should be required but in any event, in this case, there is no suggestion of any loss either by the respondent or by third parties. Even if there were loss, it would not be loss compensable by monetary order, given the nature of the issues in dispute. For these reasons, I am satisfied that there should be no requirement for an undertaking as to damages as a condition of granting relief. I have taken this into consideration, but it does not seem to me to be of sufficient weight to suggest that there should be other than the interim relief which is sought.

39        Orders will be made accordingly.

Associate:

Dated:    30 July 2012