Federal Court of Australia
Jolly v Sharma [2024] FCA 171
ORDERS
Applicant | ||
AND: | First Respondent DARREN LAMONT Second Respondent BRIAN PENZA (and others named in the Schedule) Third Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The application be dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
SNADEN J:
1 The Fair Work (Registered Organisations) Act 2009 (Cth) (the “FW(RO) Act”) regulates the creation and management of employee and employer organisations that operate within the landscape of federal industrial law. One such organisation is the twenty-third respondent, the Australian Rail, Tram and Bus Industry Union (the “RTBU”). Like all employee organisations, it operates pursuant to rules that have force under Ch 5 of the FW(RO) Act. Those rules (the “RTBU Rules”) allocate the functions of the RTBU across different “branches” and “divisions”. There are six branches: one for each state of the commonwealth. There are also six divisions: the “Administrative, Supervisory, Technical and Professional Division”, the “Infrastructure Division”, the “Rail Operations Division”, the “Fleet Manufacture, Overhaul, Maintenance and Service Division”, the “Tram and Bus Division” and the “Locomotive Division”.
2 The applicant, Mr Jolly, is the secretary of the Victorian branch’s Locomotive Division. The first respondent, Mr Sharma, is the secretary of the RTBU’s Victorian branch. Both are members of what the RTBU Rules establish as the Victorian “Branch Executive”. The remaining individual respondents (the second to twenty-second respondents) are the other members of that body (or, at least, those who were members in August 2023).
3 Members of the RTBU’s Victorian Branch Executive all hail from one of the six divisions described above. As will become apparent, that is a matter of some significance: over recent times (perhaps years), a measure of discord has developed between the Victorian Locomotive Division (the “VLD”) and the Victorian Tram and Bus Division (the “VTBD”), on the one hand, and the other four Victorian branch divisions, on the other. The first to fifteenth respondents are all aligned with one of the latter four divisions (to which it is convenient to refer collectively as the “Rail Divisions”). The sixteenth to twenty-second respondents are aligned with the VLD or the VTBD.
4 The disharmony between officers of the VLD and officers aligned with the Rail Divisions has manifested itself in various ways; but, for present purposes, it suffices to note the following, namely that:
(1) in an election held in late 2022 for office bearer positions within the RTBU’s Victorian branch, candidates aligned with the VLD lost to a group aligned with Mr Sharma and the Rail Divisions; and
(2) thereafter (though not necessarily in consequence), Mr Jolly commenced two proceedings of note in his capacity as VLD Secretary, specifically:
(a) an application in this court, by which he alleged that an RTBU publication was used to promote candidates in the election contrary to the requirements of the RTBU Rules (I shall refer to that application hereafter as the “Magazine Application”); and
(b) an application pursuant to s 94A of the FW(RO) Act, by which he sought an extension of time within which to make an application to disaffiliate the VLD from the RTBU (I shall refer to that application hereafter as the “s 94A Application”).
5 The present proceeding (of course, also brought by Mr Jolly) focuses upon resolutions that were passed by the RTBU’s Victorian Branch executive in August 2023. At a meeting of the Victorian Branch executive that took place on 9 August 2023, two motions were passed in relation to a bank account that was then wholly or partly under the control (or effective control) of officers of the VLD. Specifically, the branch executive resolved that control of that account (the “Shared VLD Account”) should be relinquished to the Victorian Branch secretary or executive. That was said to be in line with what the RTBU Rules require.
6 Perhaps unsurprisingly, Mr Jolly (on behalf of the VLD) is unhappy about the passage of those resolutions (hereafter, the “9 August Resolutions”). By an amended originating application dated 10 October 2023, he seeks various forms of relief directed to ameliorating their effects. Three causes of action are pressed.
7 First, Mr Jolly contends that the RTBU Rules offend against the requirement expressed by s 142(1)(c) of the FW(RO) Act. That contention is advanced in two ways: first, in that the RTBU Rules purport to require of the VLD the fulfillment of various obligations, yet make no provision guaranteeing it funds that would enable them to be fulfilled; and, second, in that the RTBU Rules impermissibly operate such that the will of individual divisions (such as the VLD) may be overborne by larger divisional alliances (such as that comprising the Rail Divisions).
8 Second, Mr Jolly contends that the 9 August Resolutions were passed in a way that involved non-compliance with the RTBU Rules, such that the court should make a direction or directions pursuant to s 164 of the FW(RO) Act. That non-compliance is said to lie in the fact that the resolutions were based upon an erroneous factual proposition: namely, that a resolution passed in respect of the Shared VLD Account in 2017 sought to bring about a state of affairs that was contrary to the requirements of the RTBU Rules. It will be necessary later to unpack that contention; but, for now, it suffices to record Mr Jolly’s submission that, because the Victorian Branch executive members wrongly understood (in August 2023) that that 2017 resolution offended against what the RTBU Rules require, the passage of the resolutions in August 2023 was effected in a way not authorised by those same rules.
9 Third and finally, Mr Jolly contends that Mr Sharma took “adverse action” (within the meaning given to that phrase by pt 3-1 of the Fair Work Act 2009 (Cth)—the “FW Act”) against the VLD or its members; and did so because Mr Jolly had made the s 94A Application. That adverse action is said to have inhered in Mr Sharma’s securing of passage by the Victorian Branch executive of the 9 August Resolutions. Mr Sharma is alleged to have procured a majority in favour of those resolutions and to have done so unlawfully because, or for reasons that included that, Mr Jolly had made the s 94A Application.
10 For the reasons that follow, none of the causes of action that Mr Jolly advances is made out. There is no occasion to grant any of the relief that is sought, and the amended originating application of 10 October 2023 should and will be dismissed.
Procedural history
11 The present matter commenced as an application for urgent interlocutory injunctive relief. It came before a general duty judge not long after the passage of the 9 August Resolutions. At that hearing, it was apparently agreed that the matter was one that should be listed for hearing on an expedited basis. By consent, interlocutory injunctive relief was granted, by which the respondents were required to treat the 9 August Resolutions as though void and of no effect.
12 Thereafter, the matter was allocated to my docket. At a case management hearing in late August 2023, the parties pressed for orders for expedition of the trial. I declined to indulge that joint preference, partly for want of apparent urgency. Instead, I indicated that there might be some possibility that the matter could be reallocated upon what was then assumed to be the imminent appointment of new judges to this court’s Victorian registry. With those indications given, I resolved (with the parties’ consent) to extend the interlocutory relief granted by the duty judge, to list the matter for trial in June 2024 and to list it for further case management on 3 October 2023.
13 As it happens, reallocation of the matter to a new judge proved impossible. Instead, another matter that I was scheduled to hear over seven days in October 2023 resolved. When the matter came back before me on 3 October 2023, the parties were informed that it could, if they wished, be the subject of a trial in late October or early November 2023. Following brief discussions with senior counsel, I resolved to further extend the existing interlocutory relief and to reschedule the five-day trial of the matter to commence on 30 October 2023.
14 That course ultimately played out as planned. The respondents aligned with the VLD and the VTBD filed submitting notices, and affidavit evidence and written outlines of submissions were filed in accordance with agreed directions. At the trial, Mr Jolly read the following affidavits, namely:
(1) three affidavits that he affirmed, namely on 14 August 2023, 10 October 2023 and 24 October 2023; and
(2) two affidavits affirmed by Mr Marcello Marotta, one on 10 October 2023 and the other on 24 October 2023.
Mr Jolly and Mr Marotta were both cross-examined at the trial.
15 The first to fifteenth and twenty-third respondents (to whom I shall more conveniently and simply refer, hereafter, as the “respondents”) read the following affidavits, namely:
(1) an affidavit sworn on 25 October 2023 by Mr Vikrant Sharma;
(2) an affidavit affirmed on 17 October 2023 by Mr Marcus Clayton;
(3) an affidavit sworn on 16 October 2023 by Mr Peter Veis;
(4) an affidavit affirmed on 17 October 2023 by Mr Victor Moore;
(5) an affidavit affirmed on 17 October 2023 by Mr Bryan Evans;
(6) an affidavit affirmed on 16 October 2023 by Mr Owen Drane;
(7) an affidavit affirmed on 17 October 2023 by Mr Paul Jumpertz;
(8) an affidavit sworn on 17 October 2023 by Mr Joe Dennis;
(9) an affidavit sworn on 16 October 2023 by Ms Catherine Rosser;
(10) an affidavit affirmed on 17 October 2023 by Mr Chris McMahon;
(11) an affidavit sworn on 16 October 2023 by Mr Darren Galea;
(12) an affidavit affirmed on 17 October 2023 by Ms Sally Van Bragt; and
(13) an affidavit affirmed on 17 October 2023 by Mr John Nicolopoulos.
With the exception of Mr Clayton (who is a solicitor), those deponents are all officers or members (or both) of the RTBU. Mr Sharma, Mr Moore, Mr Evans, Mr Drane, Mr Jumpertz, Mr Dennis, Ms Rosser, Mr McMahon, Mr Galea, Ms Van Bragt and Mr Nicolopoulos were each cross-examined at the trial.
Relevant factual background
16 The factual matrix upon which Mr Jolly’s causes of action rest emerges, for the most part, without material controversy from the documentary evidence that was received at the trial. Chronologically, that evidence dates back to 2016. It is apparent—and not controversial to observe—that the factional divisions within the RTBU’s Victorian branch have existed at least since that point in time. They manifested themselves then in the form of VLD opposition to the manner in which membership subscriptions that the RTBU received from VLD-aligned members were received and allocated. Prior to 2017, those subscription funds were paid into an account controlled by the Victorian Branch executive. They were used to cover “shared” expenses (that is to say, expenses that extended in their scope beyond the operations of the VLD). What remained of subscriptions thereafter was made available to the VLD executive.
17 It is apparent that the Victorian Branch executive and the VLD executive did not always agree upon what should qualify as a “shared” expense. That disquiet came to something of a head in late 2016, when RTBU members aligned with the VLD resigned their memberships en masse. Their reasons for doing so are the subject of speculation in which, for present purposes, there is no need for the court to indulge. What might be noted, however, is that officials of the Victorian Branch executive who were aligned with the Rail Divisions attributed a measure of responsibility for the mass resignations upon officials of the VLD: that is to say that the VLD was thought, by some, to have orchestrated them.
18 Efforts were made in 2017 to stem the divisions. Under the leadership of then Victorian Branch secretary, Ms Luba Grigorovitch, the Victorian Branch and VLD executives agreed to establish the Shared VLD Account, over which the VLD was to have a measure of control.
19 That was effected by means of a resolution passed by the Victorian Branch executive on 8 February 2017. The relevant terms of that resolution (the “2017 Resolution”) assume some significance and should be recorded:
Creation of a RTBU Locomotive Division Shared Account
1. A shared bank account will be created – which shall form part of the Branch Fund - in the name of the Victorian Locomotive Division of the RTBU (Locomotive Division) and will be called the RTBU Locomotive Shared Account;
2. The signatories to the Shared Account shall be the Branch Secretary, the Locomotive Divisional Secretary, the Assistant Branch Secretary and the Assistant Locomotive Divisional Secretary or any other Locomotive Division Executive member as required and nominated by the Divisional Secretary.
Payments from the Shared Account
3. All payments from the Shared Account must be jointly authorised by the Branch Secretary and the Locomotive Division Secretary. The Assistant Branch Secretary may sign in the absence of the Branch Secretary. The Assistant Locomotive Divisional Secretary may sign in the absence of the Locomotive Division Secretary, or as per the person nominated by the Locomotive Divisional Secretary pursuant to paragraph 2.
4. All and only members of the Locomotive Division shall pay their subscriptions into the Shared Account as from 8 February 2017.
5. The Locomotive Division shall pay all shared costs as between the Branch and the Locomotive Division to the Branch on a monthly basis from the funds in the Shared Account.
6. All funds remaining in the Shared Account each month after payment of all shared costs to the Branch pursuant to Clause 5 shall be transferred to the Locomotive Division general account.
…
20 The 2017 Resolution was moved by Ms Grigorovitch and seconded by Mr Marc Marotta, the then VLD secretary. Prior to the vote that approved it, Ms Grigorovitch provided what the parties describe as a standing authority to the VLD to access from the Shared VLD Account such funds as it required. The arrangement thus struck worked, in practice, as follows: rather than have the Victorian Branch executive apportion funds to “shared” expenses and then pay whatever remained to the VLD, membership subscriptions were instead paid into an account that was partly, if not effectively, controlled by the VLD (namely, the Shared VLD Account), which provided funds for “shared” expenses to the branch executive only when agreed.
21 That was the position that the 9 August Resolutions sought to alter.
22 Before coming to that, something should be said about Mr Sharma’s ascension to the role of Victorian Branch secretary. Ms Grigorovitch resigned from her position as branch secretary in April 2022. Upon that resignation, the branch executive resolved to appoint Mr Sharma to succeed her.
23 Contrary to what appears to be the more orthodox progression, Mr Sharma had not, to that point, served as an assistant secretary. He confessed to having required some time to familiarise himself with the requirements of the branch secretary role; and, more specifically, with the powers and obligations reserved for it by the RTBU Rules.
24 As it happened, elections for executive positions on the Victorian Branch executive were scheduled to take place in November 2022. Mr Sharma nominated for the position of branch secretary (that is to say, to retain the position to which the executive had appointed him only a few months earlier). Mr Marotta stood against him for that position; but Mr Sharma prevailed by a narrow margin.
25 Whether as a result of that election or otherwise—for present purposes, it doesn’t matter—the VLD embarked in early 2023 upon moves to disaffiliate from the RTBU. On 2 February 2023, Mr Jolly—who, by then, had succeeded Mr Marotta as VLD secretary—commenced in the Fair Work Commission the s 94A Application. By that application, Mr Jolly sought an extension of time within which to commence an application to withdraw the VLD from the RTBU. It is not necessary now to explore why such an extension was necessary. It suffices to note that Mr Jolly, on behalf of the VLD and/or its members, would only be able to secure one if he could convince the Commission that an extension would be appropriate having regard (pursuant to s 94A(2) of the FW(RO) Act) to:
(1) the RTBU’s record (if any) of non-compliance with workplace or safety laws; and
(2) the VLD’s likely capacity, upon withdrawal, to promote and protect the economic and social interests of the RTBU’s VLD members.
26 Mr Jolly filed a witness statement in support of his s 94A Application. It addressed each of the two considerations identified above. As to the second of them, Mr Jolly contended that an independent VLD would have the capacity to promote and protect the economic and social interests of its members in part because it had access to funds in the Shared VLD Account. Mr Jolly also made some representations about the RTBU’s record of non-compliance with workplace laws (to the particulars of which I shall later return).
27 The RTBU opposed Mr Jolly’s s 94A application. In part, it sought to do so by contending that the VLD would “…not be able to adequately promote and protect the economic and social interests of its members because…the funds [in the Shared VLD Account] are not the property of the [VLD] and are instead part of the Victorian Branch Fund…” That was said to be so because (errors original):
1. they represent subscriptions which have, contrary to the rules of the amalgamated organisation, been paid to the VLD directly and not to the Branch Secretary and into the Branch Fund as required by Rules 11(1) and 21(4) of the amalgamated organisation’s rules and that any resolution of the Branch Executive contrary to those rules is ultra vires and of no force and effect; or
2. alternatively, they represent subscriptions which have been paid to the VLD contrary to the requirements of the Victorian Branch Executive resolution of 8 February 2017…
28 In addition to the s 94A Application, Mr Jolly and the VLD had occasion in the first half of 2023 to agitate other concerns relating to the RTBU’s Victorian branch.
29 In February 2023, Mr Jolly commenced the Magazine Application—an action under ss 164 and 164A of the FW(RO) Act concerning what he alleged was the improper use of an RTBU publication during the 2022 election.
30 On 9 May 2023, Mr Jolly wrote to Mr Sharma about (amongst other things) the Victorian branch’s financial affairs having been managed around an account that was (or accounts that were) jointly controlled by the Rail Divisions (as opposed to an account or accounts controlled directly by the Victorian Branch executive).
31 Mr Jolly’s complaints about the Rail Divisions accounts appear to have caught Mr Sharma’s attention. Having taken legal advice on the financial practices of the Victorian branch—including prior to receipt of Mr Jolly’s 9 May 2023 correspondence—Mr Sharma formed the following views, namely that (as he put it—errors original):
(a) the accounts previously colloquially referred to as the Rail Divisions account were in fact part of the Branch Fund described in r. 21 of the Union's rules;
(b) all accounts which comprised the Branch Fund should be renamed to be in the name of the Branch as required by r. 21(6);
(c) the subscriptions of all members attached to the Branch should be paid into the Branch Fund;
(d) all disbursement of Branch Funds needed to be authorised, depending on the nature of the expenditure, either in advance or after the expenditure, in accordance with r. 23(4);
(e) all instruments authorising a disbursement of Branch funds needed to be authorised by two of the officers identified in r. 23(5) of the rules;
(f) resolution of 8 February 2017 was not consistent with the Rules in that:
(i) the name of the shared account was not in the name of a Branch;
(ii) disbursements out of the shared account could be authorised by persons other than those identified in r. 23(5); and
(iii) the once and for all resolution authorising the transfer of money from the shared account to the VLD accounts did not comply with the requirements of r. 23(4) of the rules.
32 By his letter of 9 May 2023, Mr Jolly asserted that the Victorian branch could not properly submit an annual declaration under the FW(RO) Act that its finances had been administered consistently with the requirements of the RTBU Rules. That was a view that Mr Sharma couldn’t (and made no attempt to) dispute. Consequently, he set about obtaining an extension for the filing of the branch’s annual returns.
33 On 8 June 2023, Mr Sharma circulated to members of the RTBU’s Victorian Branch executive the terms of some resolutions that he proposed for consideration at an executive meeting that had been scheduled for the following week. At Mr Jolly’s request, that meeting was postponed until 28 June 2023.
34 Immediately prior to that executive meeting, Mr Sharma entertained a “caucus meeting” attended by the members of the branch executive who were sympathetic to the Rail Divisions. That was common practice. At that meeting, Mr Sharma explained that the VLD and VTBD “…had been making complaints that the Branch’s financial affairs were not being conducted in accordance with the [RTBU] Rules” and that he proposed “resolutions to address the issues that had been raised”.
35 That is what then ensued. Again, it repays to set out the relevant terms of the resolutions that were proposed and passed at the 28 June 2023 branch executive meeting. The minutes of that meeting were received into evidence and relevantly record as follows:
Agenda item 3
MOTION:
"The Branch Executive
NOTING THAT Rule 21(14) makes provision for the Branch Council to establish a composite Branch Divisional Fund embracing two or more Branch Divisions so long as the relevant Branch Divisional Committees consent
AND NOTING THAT Rule 43(1) provides that the Branch Executive is the Committee of Management of the Branch and that between meetings of Branch Council, the Branch Executive may exercise all or any of the powers and functions of the Branch Council other than the power to make, alter or rescind Parts X to XVI of the Rules
AND NOTING THAT the Victorian Rail Operations Branch Division, the Victorian Fleet Manufacture, Overhaul, Maintenance and Service Branch Division, the Victorian Administrative, Supervisory, Technical and Professional Branch Division and the Victorian Infrastructure Branch Division (collectively, the Rail Branch Divisions) have for many years operated jointly and have not separately accounted for their funds
AND NOTING THAT a previous resolution of the Branch Council or the Branch Executive to establish a composite Branch Divisional Fund embracing the Rail Branch Divisions has not been able to be located
AND NOTING THAT previous resolutions of the Branch Divisional Committees of each of the Rail Branch Divisions to consent to the establishment of a composite Branch Divisional Fund embracing the Rail Branch Divisions have also not been able to be located
AND NOTING THAT on 1 June 2023 the Branch Divisional Committee of each of the Rail Branch Divisions carried a resolution consenting to the establishment of a composite Branch Divisional Fund embracing the four Rail Branch Divisions
AND for the avoidance of doubt
HEREBY RESOLVES to exercise pursuant to Rule 43(1) the power of the Branch Council under Rule 21(14) to establish a composite Branch Divisional Fund embracing the Rail Branch Divisions."
Moved: Vik Sharma Seconded: Sally van Bragt
CARRIED
Jim Chrysostomou requested that objections should be noted from Steven Cox, Wayne Hicks and him and referred to the Locomotive Division's correspondence of 13 and 15 June.
Jim Chrysostomou, Steven Cox, Wayne Hicks, Angela Lardner and Frank Pavic voted against the motion.
Agenda item 4
MOTION:
"The Branch Executive
NOTING THAT officials of the Locomotive Branch Division and the Tram and Bus Division have for some time expressed concerns and criticisms about, amongst other things, the internal accounting practices of the Branch
AND NOTING THAT in light of those expressed concerns and criticisms the Branch Secretary has reviewed the Branch's internal accounting practices
AND NOTING THAT Rule 11(1) provides that members' subscription rates, entrance fees and levies shall be paid to the Branch Secretary
AND NOTING THAT Rule 21(4) provides that the Branch Fund shall include the amount of the subscription and levies received by the Branch
AND NOTING THAT for many years members' subscription rates, entrance fees and levies have, save for many members of the Locomotive Branch Division and some of the members of the Tram and Bus Division, been paid into a Commonwealth Bank account in the name "Aust Rail Tram and Bus Industry Union T/A Rail Tram and Bus Union" which has been incorrectly referred to internally within the Branch as the "Rail Divisions operating account"
AND NOTING THAT Rule 21(7) provides that the property, other than real property, comprising the Branch Fund shall be held, deposited, invested or otherwise dealt with in the name of the Branch
AND NOTING THAT a list of accounts held by the Victorian Branch and the name in which each account is presently held is attached marked "Attachment A"
HEREBY RESOLVES that:
A. for the avoidance of doubt, the accounts in the list marked Attachment A are part of the Branch Fund within the meaning of Rule 21(4); and
B. the name of each of the accounts included in Attachment A be changed to "Australian Rail, Tram and Bus Industry Union - Victorian Branch"
Moved: Vik Sharma Second: Victor Moore
CARRIED
Note: "Attachment A" is attached at the end of these minutes.
Jim Chrysostomou requested that objections should be noted from Steven Cox, Wayne Hicks and him and referred to the Locomotive Division's correspondence of 13 and 15 June.
Jim Chrysostomou, Steven Cox, Wayne Hicks, Angela Lardner and Frank Pavic voted against the motion
36 Following the passage of those resolutions, Mr Sharma was moved to consider the VLD Shared Account. His evidence was that he had formed the view that it, too, was inconsistent with the requirements of the RTBU Rules and, thus, had to be addressed.
37 To that end, Mr Sharma circulated to members of the RTBU’s Victorian Branch executive the terms of what would ultimately become the 9 August Resolutions. That occurred by means of email correspondence dated 7 July 2023.
38 A week after that notice was given, Mr Jolly wrote to Mr Sharma and accused him of circulating and advancing the proposed resolutions “…in bad faith and for an ulterior and extraneous purpose, namely, for the purpose of hindering or obstructing the withdrawal of the VLD from the RTBU”. Mr Jolly’s correspondence continued:
Contraventions of the RO Act and the FW Act
14. Section 131(1) of the Fair Work (Registered Organisations) Act 2009 (RO Act) prohibits imposing or threatening to impose a penalty, forfeiture or disability on members of a Union or a part of a Union (such as the VLD) because there has been an act or omission referred to in s.130 of the RO Act. The making of the Withdrawal Application is such an act or omission.
15. I put you on notice that I consider that by proposing the consideration of the Proposed Motion in contravention of s.131(1) of the [RO] Act you are threatening to impose a penalty, forfeiture or disability on the VLD and its members because of the Withdrawal Application.
16. If a resolution is passed in the terms of the Proposed Motion this will be the imposition of a penalty, forfeiture or disability on the VLD and its members because of the Withdrawal Application. This will result in you and those members of the Branch Executive who vote in favour of the Proposed Motion contravening the RO Act and being personally liable to a sanction to be imposed by the Court.
17. Section 340(2) of the Fair Work Act 2009 (Cth) (FW Act) prohibits a person taking adverse action against another person or persons because a third person has exercised a workplace right for their benefit.
18. Under item 7 of s. 342(1), an officer of a Union will take adverse action against members of the Union if the officer imposes a penalty, forfeiture or disability of any kind against the members. Under s. 342(2) threatening or organising to take adverse action constitutes adverse action.
19. By making the Withdrawal Application I have exercised a workplace right within the meaning of s. 341(1) of the FW Act. I have exercised this right for the benefit of the members of the VLD.
20. By proposing the consideration of the Proposed Motion, you are threatening to take adverse action against me and the members of the VLD. I put you on notice that I consider that in contravention of a s. 340(2) you are taking this action for reasons that include the reason that I have made and am pursuing the Withdrawal Application for the benefit of the VLD members.
21. If a resolution is passed in the terms of the Proposed Motion this will constitute the taking of adverse action. This will result in you and those members of the Branch Executive who vote in favour of the Proposed Motion in contravening the FW Act and being personally liable to a sanction to be imposed by the Court.
The RTBU rules are in breach of the Act
22. Rule 11(1) provides that monies that are due to the RTBU by members must be paid to the Branch Secretary the RTBU. Rule 58(1) provides that each Branch Divisional Committee shall have management of those aspects of the Branch's operations which affect members of the Divisional Branch only.
23. However, there is no rule which confers any right on the VLD to receive any funds derived from the subscriptions paid by its members in order for its Branch Divisional Committee to discharge its duty under Rule 58(1).
24. As a result of the above. the rules are "oppressive, unreasonable or unjust" within the meaning of s.142(1)(c) of the RO Act.
25. The effect of the foregoing situation with the rules has been ameliorated by the 2017 Resolution. This is because the 2017 Resolution has guaranteed that the VLD has received the funds derived from VLD members' subscriptions after the shared costs of the Branch are paid. This has permitted the VLD to fund its expenses and to function effectively.
26. It follows that if the status quo is altered by passing a resolution in the terms of the Proposed Motion the full impact of the vice in the rules will be imposed upon the VLD and its members.
27. The situation in compounded by the fact that the rail divisions have absolute control of the Branch Executive and Branch Council and routinely exercise their numerical strength to pass resolutions that are contrary to the interest of the VLD, and to block resolutions proposed by the VLD.
…
39 Mr Sharma responded by means of correspondence dated 19 July 2023. Amongst other things, he denied that the proposed resolutions were being advanced for the reasons that Mr Jolly had suggested. In particular, Mr Sharma stated:
…It is the duty and responsibility of all RTBU offices to ensure that the rules of the Union are respected and complied with. I have proposed the motion because I consider that the 2017 resolution is contrary to the rules of the Union and is not in the best interest of the Union because it does not provide for proper and good administration of the Union. Those are my only reasons for proposing the motion.
40 Matters came to a head on 9 August 2023. As was common, members of the Victorian Branch executive who were aligned to the Rail Divisions met ahead of the executive meeting to discuss the business that was proposed to be transacted at it. Also in attendance at that pre-meeting was a solicitor, Mr Marcus Clayton. The evidence as to what occurred at it was not perfectly consistent but it is clear enough that Mr Clayton advised those present that if they voted in favour of the proposed resolutions they could not properly do so for reasons that included that Mr Jolly had made his application under s 94A of the FW(RO) Act.
41 It is also clear that, during that pre-meeting caucus, Mr Sharma explained why it was that he supported the resolutions upon which the branch executive was later to vote. He told those present that the Shared VLD Account had been established in contravention of the RTBU Rules and that the resolutions, if passed, would operate to address that non-compliance. In advocating that those present should vote in favour of the proposed resolutions, Mr Sharma did not indicate that they should do so because, or for reasons including that, Mr Jolly had filed his s 94A Application.
42 Thereafter, the branch executive meeting went ahead and the 9 August Resolutions were passed by majority. This proceeding was commenced a few days later.
Legislative framework
43 The amended originating application engages with both the FW(RO) Act and the FW Act. It is convenient to identify the relevant provisions of both, albeit not in that order.
The FW Act
44 Part 3-1 of the FW Act is entitled, “general protections”. Amongst other things, it contains a suite of provisions designed to protect against certain types of “adverse action”. One of them is s 340, which relevantly provides as follows:
340 Protection
…
(2) A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs.
…
45 “Adverse Action” is defined by s 342(1) of the FW Act. Relevantly, it includes action taken by an industrial association, or an officer or member of an industrial association, against one of the association’s members that results in the imposition against the member of a “penalty, forfeiture or disability of any kind” (other than in relation to money that the member owes to the association). It also extends to the threatening or organising of such action: FW Act, s 342(2).
46 Section 362 of the FW Act is headed “advising, encouraging, inciting or coercing action”. It provides (and, at material times, provided) as follows:
(1) If:
(a) for a particular reason (the first person’s reason), a person advises, encourages or incites, or takes any action with intent to coerce, a second person to take action; and
(b) the action, if taken by the second person for the first person’s reason, would contravene a provision of this Part;
the first person is taken to have contravened the provision.
(2) Subsection (1) does not limit section 550.
47 Section 360 of the FW Act is headed, “multiple reasons for action”. It provides (and provided) as follows:
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
48 Section 361(1) of the FW Act is concerned with proof of the reason or reasons for which action might be taken. It provides as follows:
361 Reason for action to be presumed unless proved otherwise
(1) If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
…
49 Section 340(2) of the FW Act is a “civil remedy provision”: FW Act, s 539(1). Subject to constraints not presently relevant, this court has jurisdiction to make any order that it considers appropriate if satisfied that a person has contravened it: FW Act, s 545(1). That includes the imposition of pecuniary penalties equivalent to as many as 60 “penalty units” for individuals or 300 “penalty units” for bodies corporate: FW Act, s 546.
The FW(RO) Act
50 Chapter 5 of the FW(RO) Act is entitled, “rules of organisations”. It contains an array of provisions that are directed to the registration, content and enforcement of the rules of organisations that are established as such under other provisions.
51 Mr Jolly’s application is, in part, brought under s 163 of the FW(RO) Act, which relevantly provides as follows:
163 Rules contravening section 142
Application for order declaring rules contravene section 142
(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.
…
(5) The Court may, without limiting any other power of the Court to adjourn proceedings, adjourn proceedings in relation to an application under this section for such period and on such terms and conditions as it considers appropriate for the purpose of giving the organisation an opportunity to alter its rules.
Effect of order
(6) Where an order under this section declares that the whole or a part of a rule contravenes section 142, the rule or that part of the rule, as the case may be, is taken to be void from the date of the order.
…
52 Section 140 of the FW(RO) Act establishes a requirement for organisations to have rules that make provision as the Act requires. Section 142 of the FW(RO) Act records some such requirements. It is headed, “general requirements for rules” and relevantly provides as follows:
(1) The rules of an organisation:
…
(c) 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 section 5) and the objects of this Act and the Fair Work Act, are oppressive, unreasonable or unjust; and
…
53 Section 164 of the FW(RO) Act confers upon this court jurisdiction to give directions regarding the performance of an organisation’s rules. It relevantly provides as follows (numbering original):
164 Directions for performance of rules
Application for order directing performance of rules
(1) A member of an organisation may apply to the Federal Court for an order under this section in relation to the organisation.
Note: For the meaning of order under this section, see subsection (9).
(2) Before making an order under this section, the Court must give any person against whom the order is sought an opportunity of being heard.
(3) The Court may refuse to deal with an application for an order under this section unless it is satisfied that the applicant has taken all reasonable steps to try to have the matter that is the subject of the application resolved within the organisation.
Court may make interim orders
(4) At any time after the making of an application for an order under this section, the Court may make any interim orders that it considers appropriate and, in particular, orders intended to further the resolution within the organisation concerned of the matter that is the subject of the application.
(5) An order under subsection (4) continues in force, unless expressed to operate for a shorter period or sooner discharged, until the completion of the proceeding concerned.
Definition
(9) In this section:
order under this section means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules.
54 That power is constrained by s 164B of the FW(RO) Act, which relevantly provides as follows:
164B Orders under sections 164 and 164A
…
Court may declare that rules contravene section 142
(3) Where the Court, in considering an application under section 164 or 164A, finds that the whole or a part of a rule of the organisation concerned contravenes section 142 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.
…
55 Section 320 of the FW(RO) Act is headed, “validation of certain acts after 4 years”. Relevantly, it provides as follows:
(1) Subject to this section…after the end of 4 years from:
(a) the doing of an act:
(i) by, or by persons purporting to act as, a collective body of an organisation or branch of an organisation and purporting to exercise power conferred by or under the rules of the organisation or branch; or
(ii) by a person holding or purporting to hold an office or position in an organisation or branch and purporting to exercise power conferred by or under the rules of the organisation or branch; or
…
the act…is taken to have been done in compliance with the rules of the organisation or branch.
…
The RTBU Rules
56 The RTBU Rules assume a structure and appearance that is common to rules made under the FW(RO) Act. They are lengthy but it is necessary only to note a selection of them.
57 Rule 6 is entitled “structure and organisation”. It maps out the RTBU’s structural and administrative architecture, establishing the branches and divisions to which reference has already been made. It relevantly provides as follows:
6 - structure and organisation
(1) The Union shall be organised principally on a National, a Branch, a Sub-Branch, a National Divisional, a Branch Divisional and a Branch Sub-Divisional basis.
…
(3) Subject to any subsequent decision by the National Council of the Union, the Union shall have the following Branches:-
New South Wales Branch
Queensland Branch
South Australian and Northern Territory Branch
Tasmanian Branch
Victorian Branch
Western Australia Branch
…
(8) The Victorian Branch shall comprise all members whose usual place of work is located within the State of Victoria.
…
(10) Divisions shall be defined primarily by reference to work functions and shall operate at both the National and the Branch level.
(11) Subject to sub-rule 6(12) the Union shall have the following National Divisions:-
National Administrative, Supervisory, Technical and Professional Division
National Infrastructure Division
National Locomotive Division
National Rail Operations Division
National Tram and Bus Division
National Fleet Manufacture, Overhaul, Maintenance and Service Division
with each Division being defined as follows:-
The National Administrative, Supervisory, Technical and Professional Division shall comprise members employed in an administrative, supervisory, technical or professional position or in any clerical or other position which attracts an annual salary but excluding crafts, trades and the driving of trains, buses, trams or other vehicles.
The National Infrastructure Division shall comprise members employed in the construction and maintenance of a permanent way and associated structures, signalling, buildings, bridges, electrical reticulation and related areas.
The National Locomotive Division shall comprise members employed in railway train running including locomotive drivers, electric train drivers, firemen, locomotive assistants, electric helpers, chargemen and cleaners, and rail motor drivers and trainees in these callings and, in Queensland, guards.
The National Rail Operations Division shall comprise members employed in all operational aspects of railway services both freight and passenger, other than members in the Locomotive Division or in the Administrative, Supervisory, Technical and Professional Division.
The National Tram and Bus Division shall comprise members employed in the tramway, motor omnibus and/or trolley bus industry including light rail services which are an extension of existing tram routes.
The National Fleet Manufacture, Overhaul, Maintenance and Service Division shall comprise members, other than professional or salaried staff, employed in fleet manufacture, overhaul, maintenance and service.
…
(13) Each National Division shall be divided into Branches, known as Branch Divisions and the boundaries of such Branch Divisions shall correspond with the Branches of the Union.
…
58 Rule 11 of the RTBU Rules is concerned with membership contributions. Relevantly, it provides as follows:
11 - membership contributions
(1) A member shall pay such subscription rates, entrance fees, and National levies as are determined from time to time by the National Council together with such Branch levies as are determined from time to time by the Branch Council of the member's Branch. All [moneys] due shall be paid to the relevant Branch Secretary.
…
59 Rule 21 of the RTBU Rules concerns the establishment and control of the various “union funds” of the RTBU. It relevantly provides as follows:
21 - union funds
(1) The Funds of the Union shall comprise the National Fund, the Branch Funds and the Branch Divisional Funds. Branch Divisional Funds including composite Branch Divisional Funds may be established in relation to all or any Branch Divisions.
…
(4) A Branch Fund shall be managed and controlled by the Branch Council and Branch Executive and shall consist of:-
…
(ii) the amount of subscriptions received by the Branch less any amount payable to the National Organisation by way of capitation fees.
…
and shall be used for the administration and management of the Branch and for any other purpose that the Branch Council or the Branch Executive may from time to time direct towards the attainment of any of the objects of the Union within the Branch.
…
(7) The property, other than real property, comprising the Branch Fund shall be held, deposited, invested or otherwise dealt with in the name of the Branch provided that, where it is necessary or advisable that any such property be held or dealt with by Trustees on behalf of the Branch, then the Branch President and the Branch Secretary shall be joint Trustees.
(8) Any Branch Divisional Fund shall be managed and controlled by the Branch Divisional Committee and shall consist of:-
…
(ii) any [moneys] received from the Branch;
…
…
60 Rule 22 of the RTBU Rules is entitled, “CAPITATION FEES, ENTRANCE FEES AND LEVIES”. Amongst other things, it provides that:
…
(4) All [moneys] payable by members of the Union by way of entrance fees, subscriptions, levies or fines shall be paid to and collected by the Secretary of the Branch to which the member belongs. Each Branch Secretary shall receive and deal with such [moneys] in accordance with these Rules.
…
61 Rule 23 of the RTBU Rules governs how funds may be disbursed. Relevantly (insofar as concerns branch funds), it provides as follows:
23 - disbursement of funds
…
(3) All cheques and written authorisations for the transfer and/or disbursement of funds from the Branch Union Fund shall be signed by the Secretary together with either the President, Senior Vice-President, Junior Vice-President or Assistant Secretary. The Branch Executive may authorise the Assistant Secretary to sign in place of the Secretary in his or her absence together with either the President, Senior Vice-President or Junior Vice-President.
(4) The funds of the Branch Union Fund, shall only be disbursed or otherwise dealt with, upon a resolution of the Council or the Executive. Provided that for the expenditure of the funds of the Union on the general administration of the Union and for purposes reasonably incidental to the general administration of the Union, the prior approval of Council or Executive will not be necessary before such cheques or written authorisation for the transfer and/or disbursement of funds from the Union Fund are signed and accounts paid.
…
62 Part VI of the RTBU Rules is concerned with “branch governing bodies and office bearers”. Amongst other things, its provisions establish and regulate the affairs of the bodies known (within each of the RTBU’s branches) as the “Branch Council” and “Branch Executive”. Rule 42 (which is within Part VI) concerns the “Branch Council”. It relevantly provides as follows:
42 - branch council
(1) The Branch Council shall be the highest deliberative body in the Branch. Subject to these Rules and any policies or decisions of the National Council or the National Executive, the Branch Council shall have power to do all things in relation to the Branch which are within the objects of the Union or incidental thereto…
…
63 Rule 43 (which is also within Part VI of the RTBU Rules) concerns the “Branch Executive”. Relevantly, it provides as follows:
43 - branch executive
(1) The Branch Executive shall be the Committee of Management of the Branch. Subject to these Rules, to the policies and decisions of the National Council, the National Executive and the Branch Council and to the review of its decisions by the Branch Council, it shall have the care, control, management and superintendence of the activities of the Branch and between meetings of the Branch Council, it may exercise all or any of the powers and functions of the Branch Council other than the power to make, alter or rescind Parts X to XVI of these Rules but it shall not act contrary to any policy or decision of the Council and shall not rescind, alter, vary or revoke any policy or decision of the Branch Council. All decisions within the powers of a Branch Executive shall have full force and effect unless and until disallowed by the Branch Council.
…
64 Rule 54 of the RTBU Rules defines the duties of branch secretaries. Relevantly, it provides as follows:
54 - duties of branch secretary
The Branch Secretary shall be the Principal Officer and Treasurer of the Branch. Between meetings of the Branch Council and the Branch Executive, he/she shall, subject to these Rules and to the policies and decisions of the National Council, the National Executive, the Branch Council and the Branch Executive, have primary responsibility for the conduct and management of the affairs of the Branch and do all things necessary to be done by or on behalf of the Branch. Without limiting the generality of the foregoing, he/she shall:-
(i) discharge all duties assigned to him/her by these Rules, the Branch Council or the Branch Executive;
…
(x) disburse all Branch funds in accordance with the Rules;
…
65 Rule 58 of the RTBU Rules establishes “branch divisional committees” and the powers that attach to them. Relevantly, it provides as follows:
58 - branch divisional committees
(1) Each Branch Division shall have a Branch Divisional Committee. Subject to these Rules and the policies and decisions of the National Council, the National Executive, the Branch Council and the Branch Executive, the Branch Divisional Committee shall have management of those aspects of the Branch's operations which affect members of the Branch Division only.
…
66 Part XIV of the RTBU Rules contains provisions that are specific to the RTBU’s Victorian branch (and that “…take precedence over any contrary provisions in Part VI”). Amongst them is rule 156, which restates the structure of that branch as follows:
156 - branch structure and organisation
(1) The Branch shall be principally organised on a Branch, a Branch Divisional, a Sub-Branch and a Sub-Divisional basis.
(2) The Branch Divisions shall be as follows:-
Administrative, Supervisory, Technical and Professional
Infrastructure
Locomotive
Rail Operations
Tram and Bus
Fleet Manufacture, Overhaul, Maintenance and Service
with the scope of each Division being as defined in Rule 6.
…
67 Rule 157 of the RTBU Rules (which is also within Part XIV) is concerned with the membership of the Victorian branch’s “Branch Council”. Relevantly, it provides as follows:
157 - composition and ordinary meetings of the branch council
(1) The Branch Council shall comprise the Branch President, the Branch Senior Vice-President, the Branch Junior Vice-President, the Branch Secretary, the Assistant Branch Secretary, the Secretaries of each Branch Division, the Branch Divisional Assistant Secretary Tram and Bus Division, the Branch Organisers (if any), and the Branch Divisional Organisers (if any) together with the Delegates from Branch Divisions and Regional Sub-Branches determined in accordance with Sub-Rules 157(2) and 157(3).
(2) The Branch Divisions shall be entitled to Delegates to the Branch Council determined in accordance with the following schedule:-
Number of Members within Branch Division Number of Delegates
For the first 375 or part thereof 1 Delegate
For 376 to 625 2 Delegates
For 626 to 875 3 Delegates
For 876 to 1,125 4 Delegates
For 1,126 to 1,375 5 Delegates
For 1,376 to 1,625 6 Delegates
The number of Delegates shall be determined on the basis of the number of financial members within the Branch Division at the end of the quarter immediately preceding the date for the opening of nominations for the election of Delegates…
…
68 Rule 158 of the RTBU Rules provides to equivalent effect in relation to the Victorian “Branch Executive”. Relevantly, it provides as follows:
158 - composition and ordinary meetings of the branch executive
(1) The Branch Executive shall comprise the Branch President, the Senior Branch Vice-President, the Junior Branch Vice-President, the Branch Secretary, the Assistant Branch Secretary, the Branch Organisers (if any), the Branch Divisional Organisers (if any), the Secretaries of each Branch Division, and the Branch Divisional Assistant Secretary Tram and Bus Division together with Delegates to the Branch Executive from the Branch Divisions.
(2) The number of Delegates to the Branch Executive to which a Branch Division is entitled shall be determined in accordance with the following schedule:-
Number of Members within Branch Division Number of Delegates
For the first 1,400 or part thereof 1 Delegate
For 1,401 to 2,400 2 Delegates
For 2,401 to 3,400 3 Delegates
The number of Delegates shall be determined on the basis of the number of financial members within the relevant Branch Division and/or areas as specified in Sub-Rule 158(3) at the end of the quarter immediately preceding the date for the opening of nominations for the election of Delegates.
…
The case advanced under s 163
69 Mr Jolly submits that the RTBU Rules offend the requirement to which s 142(1)(c) of the FW(RO) Act gives voice. That contention is put in two ways. First, it is said that the RTBU Rules are relevantly oppressive, unreasonable or unjust because they impose upon the VLD (and, indeed, the other branch divisions) various obligations, yet make no provision that guarantees access to funds sufficient to enable them to be met. Second, it is said that the RTBU Rules “…allow for and have resulted in the two governing bodies of the [Victorian] Branch, the Branch Council and the Branch Executive, being dominated by the Rail Divisions with no countervailing protections for the smaller Branch Divisions such as the VLD”.
70 Before addressing each contention, something might be said of s 142(1)(c) of the FW(RO) Act and the principles that have emerged from the caselaw that has considered it or its predecessors. None of them is materially in contest.
71 Section 142(1)(c) of the FW(RO) Act is a provision of long standing. Its legislative ancestors include s 142(1)(c) (and, earlier, s 196(c)) of Sch 1 to the Workplace Relations Act 1996 (Cth), s 196(c) of the Industrial Relations Act 1988 (Cth) and s 140(1)(c) of the Conciliation and Arbitration Act 1904 (Cth).
72 Ordinarily, the internal structures of (and the division of responsibilities and functions within) an organisation are matters reserved for its members, acting democratically, whether directly or through elected representatives: Belan v National Union of Workers [2000] FCA 1828, [108] (Moore J); Imlach v Daley (1985) 7 FCR 457, 462-463 (Evatt and Northrop JJ, Beaumont J dissenting in the result). Nonetheless, the FW(RO) Act erects various safeguards by which the rules of organisations must abide; and, to the extent that an organisation’s rules offend against those safeguards, they are made liable to correction under s 163 of the FW(RO) Act.
73 In Municipal Officers’ Association of Australia v Lancaster (1981) 37 ALR 559, Deane J (with whom Evatt and Northrop JJ agreed) had occasion to consider when the conditions, obligations or restrictions provided for by an organisation’s rules might qualify as “oppressive, unreasonable or unjust”. His Honour observed (at 589; references omitted):
There is nothing in the context of s 140(1)(c) which would justify giving an expansive construction of the requirement that the conditions, obligations or restrictions imposed by the rules of an organization upon applicants for membership or members not be "oppressive, unreasonable or unjust". Those three words 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 meaning 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.
74 In McLeish v Kane (1978) 22 ALR 547 (Sweeney, Evatt and Northrop JJ), this court noted (at 556-557) that:
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…
…branches of organisations 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.
75 Later (at 557), their Honours observed:
Our task as we see it is to have regard to rules and their reasonableness in the light of the manner they affect democratic control and the manner they may affect the viability of an organization. This is a task to which it is not possible to apply a formula.
76 With those general principles stated, it is convenient to turn to each of the two components of Mr Jolly’s case under s 163 of the FW(RO) Act.
Non-guarantee of funding
77 Insofar as concerns Mr Jolly’s contention that the RTBU Rules offend against s 142(1)(c) of the FW(RO) Act because they fail to guarantee branch divisions the funds that they require to discharge their obligations, there are two high-level questions that fall for the court’s consideration, namely:
(1) do the RTBU Rules relevantly impose upon members of the VLD a condition, obligation or restriction related to the funding of branch divisions; and, assuming that they do,
(2) does that condition, obligation or restriction (or do those conditions, obligations or restrictions) qualify as oppressive, unreasonable or unjust?
78 None of the parties made any submission as to the first of those two questions. It appears to have been assumed, all around, that the failure of the RTBU Rules to make provision for guaranteed VLD funding was something that qualifies as the imposition of a condition, obligation or restriction upon VLD members.
79 I confess some difficulty understanding how that might be so. It seems a stretch, to say the least, to suggest that the absence of any funding guarantee might qualify as the imposition of an “obligation” upon VLD members. Equally, it is hard to see how it might serve as the imposition of a “condition” or a “restriction” upon them. Perhaps it might be said that the imposition upon the branch division leadership of other obligations amounts, when viewed alongside the corresponding absence of any funding guarantee, to the imposition of an obligation or restriction upon those who assume leadership roles; but, again, it was not explained how that might suffice to excite the application of s 142(1)(c) of the FW(RO) Act.
80 In the absence of debate on the point, I should prefer to assume what appears to have been universally assumed by the parties: namely, that the subject of Mr Jolly’s complaint suffices, for present purposes, to amount to the imposition of a condition, obligation or restriction upon RTBU members.
81 The question for consideration then is: does that imposition qualify as oppressive, unreasonable or unjust? For the reasons that follow, I do not accept that it qualifies in any of those respects.
82 The RTBU Rules—like most (if not all) organisational rules—make provision for a hierarchy of executive or quasi-executive bodies. It is plain enough that branches sit higher in that hierarchy than branch divisions. As much is reflected in r 58 of the RTBU Rules (above, [65]), which contemplates that a branch division’s management of its own affairs is to be subject to the policies and decisions of (amongst others) a relevant branch executive.
83 That qualification of the obligations that the RTBU Rules visit upon branch divisions is important. The policies and decisions of a branch executive necessarily extend to include policies or decisions concerning the funding of branch divisions. The scope or nature of the managerial responsibilities that the RTBU Rules impose upon branch divisions is, then, necessarily determined in part by reference to any such policies or decisions.
84 Mr Jolly takes issue with that observation. He contends that it “…would be antithetical to the intent of [r 58], to interpret the supervisory role of the Branch Executive to allow it to [assume] functions [that are] explicitly given to the Branch Divisional Committee” (including the general obligation imposed by r 58(1)). Insofar as the RTBU Rules allow that, he says, they would be “‘oppressive, unreasonable or unjust’ within the meaning of section 142(1)(c)”.
85 There may or may not be something in that contention, at least insofar as concerns the capacity of the rule to authorise the wholesale assumption by a branch of what would otherwise be branch divisional responsibility. That, though, is not what is in issue presently. Mr Jolly’s complaint is not that the RTBU Rules authorise any such wholesale assumption of responsibility; it is that the rules make no provision guaranteeing branch divisional income that is commensurate with branch divisional responsibility.
86 The FW(RO) Act does not require that each and every administrative or executive body within an organisation that stands charged with some measure of managerial responsibility should, by force of the organisation’s rules, possess any particular funding entitlement. There is obvious reason why that should be so. As the circumstances of this case amply demonstrate, a guarantee of funding would inevitably defy precise articulation. How much money would be enough to enable a branch division to undertake the functions that rules assign to it? What criteria might be applied to determine a fair allocation as between branches and their divisions? To include within organisational rules vague but enforceable covenants about how activities might be funded is to invite unending factional disputation. It is all but impossible to see how that might reconcile with the objectives of the FW(RO) Act.
87 Accepting that there might be scope for judicial intervention at the margins, the funding priorities of organisations are for organisations to determine; as is the manner in which they might determine them. Here, the RTBU Rules establish a hierarchy of executive decision making bodies and invest the various levels with various responsibilities. In the case of branches, that responsibility extends (subject to minor exception) to the receipt and disbursement of membership income.
88 That is how the RTBU has resolved to manage its financial affairs (or those of them concerned with the receipt and disbursement of membership subscriptions). There may be other ways to do it; but it cannot be said that the absence of provision for guaranteed branch division funding is relevantly oppressive, unreasonable or unjust. It merely reflects two realities of modern industrial representation, namely that:
(1) an organisation’s funding priorities must be set at some administrative level, and are necessarily fluid and guided by competing interests or policy considerations; and
(2) the alternative would very likely invite unending disputation as to the funding amounts that should be guaranteed or the criteria by which guarantees should be quantified.
89 That acknowledged, I do not accept that the failure of the RTBU Rules to make explicit provision guaranteeing a level of funding for branch divisions is burdensome, harsh and wrongful (and, therefore, oppressive), nor is it immoderate and inappropriate (and, therefore, unreasonable), nor contrary to right, justice and ordinary standards of fair play (and, thereby, unjust).
90 It follows that I do not consider that the absence of any such guarantee is something that excites the application of s 142(1)(c) of the FW(RO) Act; nor that it gives rise to an occasion to grant relief under s 163. This aspect of Mr Jolly’s case must be rejected.
Rail Division dominance
91 Mr Jolly next complains that the RTBU Rules offend against s 142(1)(c) of the FW(RO) Act because they permit “…the two governing bodies of the [Victorian] Branch, the Branch Council and the Branch Executive, being dominated by the Rail Divisions with no countervailing protections for the smaller Branch Divisions such as the VLD”.
92 Again, it seems to me that equivalent questions arise for the court’s consideration, namely:
(1) do the RTBU Rules relevantly impose upon members of the VLD a condition, obligation or restriction related to the manner in which the affairs of the branch are discharged; and, if they do,
(2) does that condition, obligation or restriction (or do those conditions, obligations or restrictions) qualify as oppressive, unreasonable or unjust?
93 As with Mr Jolly’s earlier contention, none of the parties made any submission as to the first of those two questions. Again, it appears to have been assumed that the arrangements made by the RTBU Rules for the manner in which the affairs of the Victorian branch are to be discharged might amount to a relevant condition, obligation or restriction upon VLD members.
94 I confess some difficulty in understanding how that might be so. The RTBU Rules contemplate the existence of branches, and the executive or administrative management of their affairs by branch councils and branch executives, each of which is to be comprised by those who hold various offices in accordance with various rules of appointment. How any of that suffices as the imposition of a condition, obligation or restriction upon VLD members—or, for that matter, anybody—is not immediately apparent.
95 Nonetheless, the authorities (including those referred to above) appear to accept that conditions, obligations or restrictions offensive to s 142(1)(c) of the FW(RO) Act might inhere in the structural architecture for which an organisation’s rules provide. In the absence of debate on the point, there is no need for me to enter upon that landscape.
96 It suffices, instead, to note that I do not consider there to be anything about the architecture for which the RTBU Rules provide that qualifies as oppressive, unreasonable or unjust. In saying so, account should be taken of the features of that architecture and the democratic makeup of the RTBU’s Victorian branch.
97 As has been noted, the RTBU’s Victorian branch comprises six divisions. The evidence discloses that, not long prior to the trial, the membership of those divisions was as follows, namely:
(2) the VTBD—1,970;
(3) the Administrative, supervisory, technical and professional branch division—1,162;
(4) the Infrastructure branch division—1,217;
(5) the Rail Operations branch division—2,072; and
(6) the Fleet Manufacture, Overhaul, Maintenance and Service branch division—447.
98 It is immediately apparent that none of the six branch divisions is orders of magnitude larger than the others. In percentage terms, the branch membership is divided approximately as follows, namely:
(1) the VLD—22%;
(2) the VTBD—22%;
(3) the Administrative, supervisory, technical and professional branch division—13%;
(4) the Infrastructure branch division—14%;
(5) the Rail Operations branch division—24%; and
(6) the Fleet Manufacture, Overhaul, Maintenance and Service branch division—5%.
99 The RTBU Rules make provision guaranteeing divisional representation on each of the executive bodies by which the Victorian branch is administered (the Branch Council and the Branch Executive—see above, [67]-[68]). It appears to be uncontroversial that the Rail Divisions have formed something of a bloc that, in each of those jurisdictions, tends to vote as one. That is the real gravamen of Mr Jolly’s complaint: not that his division is a small one whose interests are routinely ignored by a larger one; but that a factional alliance has been formed that is inimical to his division’s interests.
100 There is nothing about that that is oppressive, unreasonable or unjust. The fact that the Rail Divisions have a history of voting the same way on the Branch Council and Branch Executive is neither here nor there. That is a function of political alliance. It does not betray any sense of oppression, unreasonableness or injustice inherent in the structures for which the RTBU Rules provide. It is an ordinary incident of democratic rule—which, I pause to note, is an object to which an organisation’s rules are to aspire—that the majority view on contested issues should prevail.
101 I do not consider that there is anything in the democratic makeup of the six Victorian branch divisions (or the rules that contemplate their existence and involvement in the affairs of the branch) that suffices to offend against s 142(1)(c) of the FW(RO) Act. There is no occasion to grant relief under s 163 as Mr Jolly contends and this aspect of his case must be rejected.
Conclusions regarding s 163
102 Mr Jolly’s claims to relief under s 163 of the FW(RO) Act are not made out and must, accordingly, be rejected.
The case advanced under s 164
103 Mr Jolly contends that the 9 August Resolutions were passed on the erroneous understanding that the state of affairs authorised by the 2017 Resolution was contrary to the RTBU Rules.
104 That those who voted to pass the 9 August Resolutions did so because they were of the view that what the 2017 Resolution purported to authorise was contrary to what the RTBU Rules require may be accepted—indeed, is not materially controversial. There are two questions that arise for consideration.
105 The first concerns the correctness of the understanding just acknowledged: were those who voted in favour of the 9 August Resolutions correct to take the view that the 2017 Resolution sought to authorise what the RTBU Rules prohibit?
106 The second issue goes to whether or not it should matter either way: even assuming that the understanding that is acknowledged to have animated the passage of the 9 August Resolutions was wrong, is that something that invalidates their passage or otherwise enlivens the possibility of relief pursuant to s 164 of the FW(RO) Act?
107 For reasons that might become apparent, I consider it prudent to address those questions in the reverse order.
Would it matter if the factual premise underpinning the 2017 Resolution was wrong?
108 In Allen v Townsend (1977) 16 ALR 301 (Smithers, Evatt and Northrop JJ), this court accepted that a resolution of an executive body within an organisation that was passed for reasons that were not genuinely related to its administration or to the promotion of its objects was amenable to relief equivalent to that which Mr Jolly now seeks under s 164 of the FW(RO) Act. There, the court accepted that the motives that animated the passage of the resolution that was sought to be impugned were sufficiently removed from the proper administration of the organisation, such that what was passed was not something whose passage was authorised by the organisation’s rules.
109 Here, Mr Jolly contends that equivalent reasoning should apply so as to vitiate the passage of the 9 August Resolutions: in other words, that the false legal premise that animated those who voted in favour of the resolutions suffices to take what was approved beyond what the Victorian Branch executive was authorised to approve under the RTBU Rules.
110 It is, I think, one thing to accept that a resolution that is passed for ulterior or improper purposes—or whose passage is a product of fraud or deliberate misstatement—might be impugned as beyond what an executive or administrative decision-making body is impliedly authorised to decide. It is quite another to suggest that an organisation’s rules only authorise the passage of resolutions that are relevantly unaffected by errors of fact or law.
111 No authority in favour of that proposition was cited and I am unable to see any reason of policy that should incline the court now to accept it. There is no reason why a resolution whose passage by the Victorian Branch executive was a product of collective legal or factual mistake should be thought to be beyond what the RTBU Rules authorise. Mr Jolly did not nominate (and I am unable to identify) any particular rule that would operate with that express effect. Moreover, I am unable to see—and it was not explained—how any part of the RTBU Rules should have that operation by implication. An executive body that resolves to take particular action based on what it later learns was a flawed factual or legal premise can, if it sees fit, simply revisit its decision.
112 That acknowledged, I do not accept that the passage of the 9 August Resolutions should attract relief under s 164 simply on the basis that the factual or legal premise that underpinned them was flawed.
Was the factual premise underpinning the 2017 Resolution wrong?
113 In any event, it doesn’t much matter. For the reasons that follow, the proposition that the state of affairs to which the 2017 Resolution gave rise is contrary to the RTBU Rules is (and was) correct.
114 Some features of the “shared account” that was the subject of the 2017 Resolution bear repeating. First, the account was to exist “…in the name of the Victorian Locomotive Division of the RTBU”. Second, its signatories were to include the VLD secretary, assistant secretary and executive members. RTBU members aligned with the VLD were to have their membership fees paid into it; and, from those funds, only amounts that were “jointly authorised” by representatives of the branch and the VLD were to be paid out. “Shared” costs were to be paid to the branch on a monthly basis.
115 That the funds contained within the “shared account” were to be (and, by all accounts, were) part of the funds of the RTBU’s Victorian branch may be accepted. That, however, merely serves to underline the respects in which the arrangements established pursuant to the 2017 Resolution offended other requirements under the RTBU Rules.
116 Rule 21(4) of the RTBU Rules (above, [59]), for example, makes clear that the funds of a branch are to “…be managed and controlled by the Branch Council and Branch Executive”. On any view, the Shared VLD Account was not, in that the resolution conferred measures of management and control upon the VLD (through its officers). Rule 21(7) of the RTBU Rules (above, [59]) requires that the property comprising a Branch Fund be “…held, deposited, invested or otherwise dealt with in the name of the Branch”. On any view, the property comprising the funds held in the Shared VLD Account was not so deposited, invested or otherwise dealt with.
117 Under r 23(3) and (4) of the RTBU Rules (above, [61]), authority to disburse funds comprising a Branch Fund is conferred upon the branch’s council or specified members of its executive. That sits uneasily—which is to say, not at all—with the terms of the 2017 Resolution, which posited a “joint” authority shared between members of the branch and VLD executives (indeed, the reality was somewhat less shared, given the standing authority that Ms Grigorovitch provided—above, [20]).
118 At least for those reasons, the reality that the 2017 Resolution ushered in was very much incompatible with what the RTBU Rules required. With one exception, the submissions advanced by Mr Jolly to the contrary are all unpersuasive. I shall address each of them separately.
119 First, Mr Jolly contends that, because the Victorian branch is not a separate legal entity, it is “legally problematic” to expect, as the RTBU Rules require, that its funds be “held, deposited, invested or otherwise dealt with in the name of the Branch”. Respectfully, it is not. The fact that ownership in the relevant funds vests with the RTBU—that is, with the only legal entity established by force of the FW(RO) Act—is neither here nor there. Funds that the RTBU Rules recognise as branch funds can, nonetheless, be administered in the name of the branch. Indeed, that is what was partially brought into being (in respect of the Rail Divisions) by the resolution that the Victorian Branch executive made on 28 June 2023 (above, [35]). It is plainly what the RTBU Rules require.
120 Similarly, I cannot accept Mr Jolly’s contention that, because the secretary, president and other office holders of the Victorian branch were signatories to it, the Shared VLD Account was administered consistently with what r 23(3) and (4) of the RTBU Rules contemplate. With respect, Mr Jolly’s proposition ignores the fact that, under the 2017 Resolution, there were other branch divisional signatories who were not amongst those in whom the RTBU Rules vest relevant decision-making responsibility. The effect of the 2017 Resolution was to vest in nominated divisional office bearers an authority that the RTBU Rules reserved for specific branch office bearers.
121 Finally, Mr Jolly contends that, because the 2017 Resolution was a resolution of the Victorian Branch executive, it fell within what r 23(4) of the RTBU Rules contemplates as a valid delegation of an otherwise limited disbursement power. That contention is unsound. Rule 23(4) authorises branch executive resolutions about the transfer or disbursement of a branch’s funds. It does not confer a power to delegate to others an equivalent authority. Insofar as the Victorian Branch executive sought, by the 2017 Resolution, to effect such a delegation in favour (or partly in favour) of the VLD (or its officers), it traversed beyond what the RTBU Rules permit.
122 The sole exception referred to above (at [118]) concerns the operation of s 320 of the FW(RO) Act. Mr Jolly contends that, even if the effect of the 2017 Resolution was to bring about a state of affairs that was contrary to the requirements of the RTBU Rules, s 320(1) of the FW(RO) Act now operates to regularise it. That, plainly enough, is said to be so because more than four years has elapsed since the 2017 Resolution was passed.
123 There is a logical attraction to that submission but, for the reasons that follow, I reject it. First, s 320(1) relevantly applies to the “doing of…act[s]”. Conduct engaged in in the purported (but not valid or actual) exercise of a power conferred by the RTBU Rules is, after the passage of four years, deemed to have been validly so effected.
124 It may, thus, be accepted that the approval of the 2017 Resolution and the establishment of the Shared VLD Account each qualify as conduct that, by operation of s 320(1) of the FW(RO) Act, must now be taken to have been done in compliance with the RTBU Rules. Likewise, funds received into and paid out of that account, must, to the extent that that occurred more than four years ago, be taken to have been so paid or received in compliance with the RTBU Rules.
125 Similarly, it can be said that the 2017 Resolution must now be taken to have been validly made—that is to say, made in a way that the RTBU Rules authorise—notwithstanding that it was not at the time of its making (in that it purported to operate so as to authorise that which the RTBU Rules forbade).
126 But so to observe is not to accept that the regime established by the 2017 Resolution is one that now complies with the requirements of the RTBU Rules. That regime is ongoing—which is to say, involves ongoing conduct. Conduct engaged in within the last four years that is inconsistent with the requirements of the RTBU Rules is not conduct upon which s 320(1) of the FW(RO) Act operates. Nor does that section serve to clothe the regime that was established in 2017 with an ongoing air of compliance that, in truth, it does not have.
127 Section 320(1) is a limitation provision. It operates, after the expiry of the nominated period, so as to put relevantly non-compliant conduct beyond the reach of correction. It does not operate so as to authorise, on an ongoing basis, that which an organisation’s rules forbid; nor is it a mechanism by which inconvenient limitations upon the exercise of power can, by the effluxion of time, be gotten around. As the respondents put it: “[n]othing in s. 320 of the FW[(]RO[)] Act means that the scheme provided for under the…2017 Resolution is a scheme which is now deemed to be consistent with the [RTBU] Rules”.
Conclusions regarding s 164
128 It follows, contrary to Mr Jolly’s contention, that the accepted premise upon which the passage of the 9 August Resolutions transpired—namely that the arrangements brought about by the 2017 Resolution were arrangements that did not comply with the requirements of the RTBU Rules—was correct. Even had it been otherwise, that would not suffice to warrant the relief that the court is asked to grant. The passage of those resolutions occurred in an orthodox way that cannot be impugned in the manner by which Mr Jolly seeks to impugn them.
129 That being so, there is no occasion to entertain the grant of relief under s 164 of the FW(RO) Act and Mr Jolly’s claim for relief under that section must be dismissed.
The adverse action case
130 Mr Jolly’s third and final cause of action is advanced pursuant to pt 3-1 of the FW Act. He contends that the passage of the 9 August Resolutions constituted “adverse action” that Mr Sharma took against VLD members in contravention of s 340(2) of the FW Act. Relying upon s 362(1) of the FW Act, he contends that Mr Sharma brought about the passage of the 9 August Resolutions; and did so because, or for reasons that included that, Mr Jolly had exercised a workplace right (specifically, by making the s 94A Application).
Principles to be applied
131 The principles to be applied in an action alleging a contravention of s 340(2) of the FW Act are well-settled and were not materially in dispute. For present purposes, conduct engaged in by an officer of an industrial association will amount to adverse action taken against a member of the association if it results in the imposition upon the member of a penalty, forfeiture or disability of any kind (other than in relation to money that the member legally owes the association).
132 Amongst other things, s 340(2) prohibits a person from taking “adverse action” against a second person because a third person has exercised a “workplace right”. In the case that he advances, Mr Jolly is the third person. By operation of s 362(1) of the FW Act (and his having brought about the passage of the 9 August Resolutions, Mr Sharma is said to be the first person. Each of the members of the VLD is said to be the second person. In other words, Mr Jolly contends that Mr Sharma took adverse action against the members of the VLD because he (Mr Jolly) commenced the s 94A Application.
133 It is prudent at this juncture to map out what parts of Mr Jolly’s claim are and are not controversial. Within that second category can be included the character that attaches to his commencement of the s 94A Application. It is not disputed that, by commencing that action, Mr Jolly should be understood to have exercised a “workplace right” within the meaning attributed to that term by s 341(1) of the FW Act. Similarly, it is not disputed that Mr Sharma relevantly advised, encouraged or incited those who voted to approve the 9 August Resolutions to do so. At issue is:
(1) whether the passage of the 9 August Resolutions amounts to “adverse action” against members of the VLD; and, assuming that it does,
(2) whether Mr Sharma brought about their passage because, or for reasons that included that, Mr Jolly had commenced the s 94A Application.
134 Only if both of those questions are answered in the affirmative will it follow that Mr Jolly has established his cause of action under s 340(2) of the FW Act.
135 As to the former, Mr Jolly contends that the abolition of the Shared VLD Account amounted to the imposition of a relevant disability, in that it removed the benefit for VLD members that otherwise inhered in their having guaranteed access to their own membership subscription funds.
136 In Fair Work Ombudsman v Australian Workers’ Union (2017) 271 IR 139 (“FWO v AWU”), 150 [37], Bromberg J had occasion to consider what might be contemplated by the imposition of a disability for the purposes of s 342(1) of the FW Act. His Honour observed:
Read in its context, to impose a “disability” on a member of the association, is to subject the member to a restriction or other constraint which disables or incapacitates the member from doing something which the member would otherwise be entitled or able to do. In other words, a disadvantage involving the loss, restriction or curtailment of an ability or capacity. The imposition of a disability does not contemplate the mere infliction of hurt feelings, anxiety, ill will or inconvenience. The word does not encompass all forms of detriment, prejudice, harm or disadvantage. It is limited to disadvantage which is consequential upon the loss, prevention or restriction of an ability or capacity.
137 Mr Jolly also contends that the passage of the 9 August Resolutions sufficed to visit upon VLD members a penalty or a forfeiture. For reasons that will become apparent, there is little utility in exploring the precise conceptual limits that attach to those terms; for now, it suffices to observe that a “penalty” is apt to cover the imposition of a fine or other punishment and a “forfeiture” involves the denial of a benefit or right otherwise enjoyed. In each case, it is likely that the concepts envisage penalties or forfeitures that an organisation is otherwise at liberty to visit (whether under its rules or otherwise) but it is unnecessary to venture into that territory. Plainly enough, the concepts have “an extensive area of overlap”: Linehan (on behalf of The Industrial Relations Bureau) v Australian Public Service Association (Fourth Division Officers) (1982) 44 ALR 289, 303 (Fitzgerald J).
138 Whether Mr Sharma brought about the passage of the 9 August Resolutions for the reason, or for reasons including the reason, that Mr Jolly alleges is a question of fact. Mr Jolly is afforded substantial assistance in the proof of his allegation by the statutory presumption for which s 361(1) of the FW Act provides. It is not controversial to observe that, the allegation having been properly made (and assuming, momentarily, that his conduct sufficed to constitute adverse action), it falls to Mr Sharma to prove that he did not bring about the passage of the 9 August Resolutions because or for reasons including that Mr Jolly commenced the s 94A Application.
139 Section 361(1) places upon a person who is alleged to have taken unlawful adverse action “…the onus of proving that which lies peculiarly within his own knowledge”: General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 (hereafter, “Bowling”), 617 (Mason J).
140 Discharge of that burden in the present case (again, assuming that Mr Jolly succeeds in establishing relevant adverse action) requires that Mr Sharma lead (and that the court accept) evidence as to why it was that the adverse action was taken. More accurately, it requires evidence as to what did not actuate the impugned conduct (which is a task most often discharged by proving what did). Mr Sharma must positively establish that Mr Jolly’s exercise of a workplace right did not factor as a reason that substantially or operatively animated his efforts to bring about the passage of the 9 August Resolutions: Bowling, 612 (Gibbs J), 619 (Mason J, with whom Stephen and Jacobs JJ agreed).
141 In Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 (hereafter, “Barclay”), the High Court had occasion to consider how a respondent to an adverse action claim might rebut the statutory presumption. French CJ and Crennan J (with whom Gummow and Hayne JJ agreed) observed (at 517 [44]-[45]) (references omitted):
…The imposition of the statutory presumption in s 361, and the correlative onus on [respondents], naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains “why was the adverse action taken?”
This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the [respondent]. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon [a respondent]…
142 A respondent to a claim under s 340(2) of the FW Act may rebut the statutory presumption for which s 361(1) provides by leading evidence as to why he, she or it did the things that are sought to be impugned. The question for the court to determine starts and ends with whether, in fact, those reasons actuated that conduct. The court is not concerned to judge the reasons proffered on their merits: Khiani v Australian Bureau of Statistics [2011] FCAFC 109, [31] (Gray, Cowdroy and Reeves JJ). At issue is simply whether they were, in fact, the reasons that animated the conduct in question.
Did the passage of the 9 August Resolutions relevantly visit adverse action?
143 The first question posed for the court’s consideration is whether the decision of the Victorian Branch executive to approve the 9 August Resolutions amounted to adverse action against members of the VLD.
144 The respondents contend that the answer to that question turns upon whether or not the arrangements that were the subject of the 2017 Resolution—that is to say, the Shared VLD Account arrangements to which the 9 August Resolutions were directed—were consistent with the requirements of the RTBU Rules. Only if they were, it is said, could their removal by means of the 9 August Resolutions amount to the imposition of a “disability of any kind” for the purposes of s 342(1) of the FW Act.
145 If that were so, then that issue has already been resolved: the ongoing existence, use and management of the Shared VLD Account were not authorised by—and were inconsistent with—the requirements of the RTBU Rules.
146 Might it be said, then, that the dismantling of what the 2017 Resolution impermissibly established amounted to (in the words of Bromberg J in FWO v AWU, 151 [37]), “…a restriction or other constraint which disables or incapacitates [VLD members] from doing something which [they] would otherwise be entitled or able to do”? The respondents submit that that question should be answered in the negative, as the effect of the 9 August Resolutions was merely to bring the financial arrangements of the branch into line with what the RTBU Rules require: there was, it is said, nothing that VLD members were validly entitled or able to do under the RTBU Rules that they aren’t still validly entitled or able to do.
147 There is force behind that contention but, ultimately, I am not persuaded that it should be accepted. Conceptually, the imposition of a “disability of any kind” is wide enough to incorporate the “loss, prevention or restriction of an ability or capacity” (again, to borrow from Bromberg J). There is no obvious reason why any such ability or capacity should exclude abilities or capacities that are enjoyed as a function of indulgence, even indulgences that are contrary to an organisation’s rules. The scheme of pt 3-1 is clear enough: its aim is to prohibit conduct that is engaged in by way of reprisal against engagement in other action (including, as in this case, in the exercise of a workplace right or workplace rights). By design, the consequences of the conduct that is proscribed need not be material: see, by way of analogy, the observations of the plurality in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1, 18 (Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ).
148 Here, there can be no doubt that, prior to the passage of the 9 August Resolutions, VLD members enjoyed the benefit of a scheme by which their membership subscriptions were paid into an account that was jointly or partly controlled by VLD officers, from which moneys were expended only with input from a representative or representatives of the VLD. The effect of the 9 August Resolutions was to remove their capacity to operate under or benefit from that scheme. I accept that that removal suffices to constitute the imposition of a disability for the purposes of item 7 of the table set out in s 342(1) of the FW Act. It is unlikely that it also qualifies as the imposition of a penalty or forfeiture; but it is unnecessary that I should express a conclusion on those fronts.
149 There is a further issue that bears upon whether the passage of the 9 August Resolutions might amount to the imposition of adverse action as Mr Jolly alleges. The respondents contend that the mere casting of votes by those members of the Victorian Branch executive who voted in favour of the 9 August Resolutions is, by itself, insufficient to constitute the removal of a relevant ability or capacity (and, thereby, the relevant imposition of a disability). The adverse action, they say, lies in the measures subsequently taken by the organisation itself to give effect to what was resolved. In effect, they seek to draw a distinction between the dismantling of the scheme that the 2017 Resolution erected and the decision of the branch executive to approve its dismantling.
150 Respectfully, that is too fine a distinction. Necessarily, the conduct of an organisation inheres in conduct that is the product of decisions that are made on its behalf. For present purposes, there is no relevant distinction between dismantling what the 2017 Resolution erected and deciding to dismantle what the 2017 Resolution erected.
151 It follows that, by resolving to approve the 9 August Resolutions, the members of the Victorian Branch executive (or those who were in favour of approval) engaged in conduct sufficient to visit adverse action against members of the VLD.
152 As has been noted, the passage of those resolutions was an outcome that Mr Sharma advised, encouraged, or incited members of the branch executive to approve. Whether or not he should be understood to have contravened s 340(2) of the FW Act by doing so turns, then, upon his reasons for doing what he did.
Why did Mr Sharma advance the 9 August Resolutions?
153 Mr Jolly urges the court to conclude that, insofar as he brought about the passage of the 9 August Resolutions, Mr Sharma was actuated, or partly actuated, by reason of Mr Jolly’s having commenced the s 94A Application. In addition to the statutory presumption for which s 361(1) of the FW Act provides, he relies to that end on three matters.
154 The first is circumstantial. Mr Jolly contends that the timing of the s 94A Application and the submission advanced by the RTBU in defence of it (namely, that the VLD would not be capable of sustaining itself, in part because the funds that it said were at its disposal were, in fact, not its funds) support the inference that the making of the s 94A Application bore upon Mr Sharma’s sponsorship of the 9 August Resolutions.
155 The second concerns a document that was disclosed as part of the discovery process in this proceeding; specifically, a printout of a “WhatsApp” conversation that involved a group of members or officials of the RTBU, each of whom is aligned, factionally or politically, with Mr Sharma. That printout comprises a series of messages sent by individual members to the group as a whole between Monday, 24 July and Thursday, 27 July 2023. The content of those messages (or some of them)—to which I shall later return—is said to support the same inference (namely, that the making of the s 94A Application bore upon Mr Sharma’s decision to champion the passage of the 9 August Resolutions).
156 The third concerns Mr Sharma’s credit as a witness. For various reasons (each of which I shall address), Mr Jolly contends that Mr Sharma’s evidence as to why it was that he brought about the passage of the 9 August Resolutions should be rejected because Mr Sharma was not a witness of truth.
157 Those matters, Mr Jolly contends, accumulate to a point where the court should decline to accept that Mr Sharma has rebutted the statutory presumption to which s 361(1) of the FW Act gives voice.
158 As to that rebuttal, Mr Sharma gave evidence about why it was that he supported (or encouraged or incited) the approval of the 9 August Resolutions. He told the court that he did so because he was concerned to bring the financial affairs of the Victorian branch into line with what the RTBU Rules require. Having had occasion to consider the issue in the context of similar non-compliance on the part of the Rail Divisions, Mr Sharma told the court that he formed the view that the scheme effected by the 2017 Resolution was inconsistent with the requirements of the RTBU Rules. He denied that his sponsorship of the 9 August Resolutions was in any way actuated by Mr Jolly’s having commenced the s 94A Application.
159 Senior Counsel for Mr Jolly accepted that, were the court to reject Mr Sharma’s evidence as to why he did what he did, it would necessarily do so on the basis that his evidence was deliberately false: in other words, that when he described to the court his reasons for acting, he did so knowing that they were, in fact, not his real reasons. At issue presently, then, is whether there exists a basis in the evidence to conclude that Mr Sharma’s evidence was fabricated.
160 On that score, Mr Jolly submits that Mr Sharma was “an extremely unreliable witness”, whose evidence before the court was not given “frankly” and could be characterised, in multiple respects, as “disingenuous”. Several examples were advanced of answers given by Mr Sharma during the course of his cross-examination that the court should characterise in that way.
161 The first concerned the printed reproduction of the WhatsApp “chat” that is referred to above. It is prudent to replicate here what was relevantly discussed during that “chat” (I shall identify the names and times associated with each entry, followed by the entry itself—all errors original):
Vic Moore (3:18pm on Thursday, 27 July 2023)
That latest [VLD] letter sent today to exec members has a tone of desperation attached to it or is it just me
Bryan Evans (3:19pm on Thursday, 27 July 2023)
No
It does
No threats of legals nothing…. Just a long drawn out plead
…
Mr Sharma (3:45pm on Thursday, 27 July 2023)
It contains a threat that what happened in 2016/17 could happen again – member resignations
It concedes that even if the 2017 reso was valid, Exec has the power to rescind it and put in a new practice
Definitely desperation – ultimately they know that the Exec has a lot more power than it has ever exercised
Bryan Evans (3:45pm on Thursday, 27 July 2023)
Yeah
But this time an exodus works against them
Mr Sharma (3:45pm on Thursday, 27 July 2023)
And an allegation that the Exec does not pass resos in good faith and that the numbers are controlled
Bryan Evans (3:46pm on Thursday, 27 July 2023)
Less viable with less members
Mr Sharma (3:46pm on Thursday, 27 July 2023)
Yes
162 In the course of his cross-examination, Mr Sharma was asked to clarify “how an exodus would work against the locomotive division”. Referring to the events of 2016 (when members of the VLD resigned from the RTBU en masse—see above, [17]), he gave the following answer:
[M]y understanding is the last time the exodus was actually planned to apply pressure on the then officeholders to, you know, meet with local – local leaders’ demands at that time. But if – and members right now, they are, you know, unhappy about all this, you know, infighting and they – and they raised those issues and if there were an actual genuine exodus, you know, then those members won’t return back because it’s not a planned, you know, departure from the union. So it was organised for a couple of hundred members or however many back then. Resign, we will do all this, apply pressure and bring you back.
163 Mr Jolly describes that answer as “nonsensical”. Respectfully, I do not accept that it is. Mr Sharma’s evidence was clear enough. He considered that the 2016 “exodus” that the VLD orchestrated (or that he otherwise attributed to VLD officers) was unlikely to be repeated in 2023 because the circumstances were different. In 2016, so far as he understood the history, the resignations that were procured served as something of a bargaining chip to extract from the Victorian Branch executive concessions as to how funds might be controlled: they were procured on the understanding that members would rejoin once those concessions had been obtained. That, so Mr Sharma thought, was not akin to the situation that obtained in 2023. In 2023, the VLD had commenced efforts to withdraw from the RTBU and there were no concessions in respect of which a repeat of the “exodus” might have been thought advantageous. Indeed, if anything, an exodus might well have worked to prejudice the VLD’s efforts to withdraw.
164 How any of that assists Mr Jolly is not immediately apparent. It does, of course, suggest that Mr Sharma was alive—as surely he must have been—to the s 94A Application and the variables that bore upon it. But why should that matter for present purposes? How might it serve as a basis to think that the 9 August Resolutions (which were then, of course, proposed resolutions) were inspired in some way by the s 94A Application?
165 More to the point, I do not accept that Mr Sharma’s evidence on the issue can fairly be described as nonsensical or disingenuous, nor that the court might, because of it, have reason to reject what he said or any other aspect of his evidence. On the contrary, Mr Sharma’s evidence about the WhatsApp “chat” was rational and hung together in an unremarkable and orthodox way.
166 Next, Mr Jolly suggests that Mr Sharma’s evidence was “disingenuous” insofar as concerned his handling of a report that was provided to him by an auditor in September 2022 and his handling of concerns that the VLD raised with him in writing in March 2023. It is said that, in each case, Mr Sharma attempted improperly to downplay the significance of the delays that attended his handling of those matters and that, in light of that, the court should have occasion to treat his evidence with caution.
167 I reject those characterisations of Mr Sharma’s evidence. Mr Sharma accepted, at least implicitly, that his handling of the matters to which Mr Jolly points was open to legitimate debate. He sought to impress upon the court—and I accept—that he was a relatively new Branch Secretary who was still coming to terms with the demands of his job. I do not accept that his answers about the manner in which he set about handling the many demands of what is surely a demanding office were such as might legitimately give the court pause to reject his evidence generally—at all, and certainly not as a product of deliberate falsification.
168 Mr Jolly’s best—and, with respect, I think only genuinely credible—submission as to why the court might reject Mr Sharma’s evidence about why it was that he was moved to sponsor the passage of the 9 August Resolutions concerned the timing of events. Mr Jolly submitted that “…[t]he sequence of events raises a powerful inference that Mr Sharma was focused on attacking the 2017 Resolution in the Branch Executive at the same time as he was advancing an argument based on[ ]its validity in the Fair Work Commission.” It is suggested that Mr Sharma correctly identified that the scheme that was put in place as a result of the 2017 Resolution was something that might imperil his defence of the s 94A Application; and that he took the steps that he did to dismantle it (most notably, by championing the 9 August Resolutions) in order to enhance the prospects of that defence.
169 There can be no doubt that the “sequence of events” is such as to afford at least some support for the contention that Mr Jolly advances. Nonetheless, the ultimate inference that he invites the court to draw from that sequence cannot properly be drawn. The timing of Mr Sharma’s sponsorship of the 9 August Resolutions and the significance to the s 94A Application of the arrangements to which they were directed are consistent with the notion that the former was motivated, at least partly, by the latter; but they do not stand as a proper evidential foundation upon which the court might conclude as much (or might otherwise reject other evidence suggestive of some other reality).
170 That is particularly so given the evidence that Mr Sharma gave. Mr Sharma told the court that he became aware of the 2017 Resolution in May 2022, following a meeting with Mr Marotta. He was, at that time, new to the role of Branch Secretary. He did not then have occasion to consider whether the scheme to which the 2017 Resolution gave effect was compliant with the RTBU Rules.
171 Mr Sharma explained that, very soon after he assumed the role of Branch Secretary from Ms Grigorovitch, he began fielding letters of complaint from the VLD and the VTBD about improprieties in the management of the branch’s affairs. Those complaints, appropriately enough, fixed his attention upon the requirements of the RTBU Rules. Over time, he amassed some measure of understanding as to what those requirements were.
172 It was in early 2023 that Mr Jolly commenced the s 94A Application and the Magazine Application. In the latter, an allegation was raised about the use of the Rail Divisions accounts and whether they could legitimately be used to fund a publication of the Victorian branch.
173 As might be expected, Mr Sharma retained a solicitor, Mr Marcus Clayton, to assist in his defence of Mr Jolly’s assertions. Mr Sharma told the court that Mr Clayton suggested in late March or early April 2023 that it might be prudent for him to obtain “…advice as to the effect of rules 21 and 23 of the [RTBU Rules] and whether the practices adopted by the Branch in respect of funds and the receipt of subscriptions were compliant with the [RTBU Rules]”. That was an issue squarely raised by the Magazine Application.
174 Mr Sharma’s evidence was that there then followed a process by which he came to examine whether (or the extent to which) the financial affairs of the Victorian branch were managed consistently with the RTBU Rules.
175 That very question then arose in the context of the s 94A Application. In a statement that he filed in support of that application on 3 April 2023, Mr Jolly made the following allegations (errors original):
The Victorian Branch, Rail Operations Division and their officials have a long and significant record of not complying with the rules of the RTBU. I refer to and rely on the matters set out at [earlier] paragraphs…as well as:
(a) In breach of rule 21(4), 23(3), 23 (4) and 54(x), the financial affairs of the Victorian Branch have, to my knowledge, always been conducted through an account held by the Rail Operations Division instead of through a Victorian Branch Fund;
(b) In breach of rule 23(8), the financial affairs of the four Branch Divisions that are collectively known as the Rail Operations Division have, to my knowledge, always been conducted through an account held by the Rail Operations Division collectively instead of through a Branch Divisional Fund for each Branch Division;
(c) In breach of rule 21(8), the funds of the Branch Divisions that are collectively known as the Rail Operations Division have, to my knowledge, always been managed and controlled by the Victorian Branch Secretary instead of the Branch Divisional Committees of the Branch Divisions that are collectively known as the Rail Operations Division;
(d) In breach of rule 23(5), the transfer and or/disbursement of the funds of the Branch Divisions that are collectively known as the Rail Operations Division have, to my knowledge, always been authorised by the Victorian Branch Secretary alone instead of by two Branch Divisional office bearers;
(e) In breach of rule 23(6), the funds of the Branch Divisions that are collectively known as the Rail Operations Division have, to my knowledge, have often been disbursed or dealt with by the Victorian Branch Secretary without a resolution of the Branch Divisional Committee of those Branch Divisions;
…
176 On two occasions in May 2023, Mr Sharma attended upon Mr Clayton and counsel (including senior counsel) for the purposes of obtaining advice about the management of the Victorian branch’s financial affairs. Having done so, he formed the view that Mr Jolly might have had a point: that there may well have been (indeed, were) aspects of the manner in which the finances of the Victorian branch were managed that were not compliant with the RTBU Rules.
177 Having formed that view, Mr Sharma then set about regularising things. As a first step, he sought to correct what Mr Jolly had correctly identified about the Rail Divisions accounts. That prompted him to move and favour the resolutions of 28 June 2023 (above, [35]), which brought to an end the branch’s use of the Rail Divisions accounts.
178 Having addressed that legitimate concern of Mr Jolly’s, Mr Sharma’s attention very naturally shifted to the arrangements set in place under the 2017 Resolution. He had correctly reckoned that the Shared VLD Account—like the Rail Divisions accounts prior to 28 June 2023—was being used contrary to the requirements of the RTBU Rules and he set in train efforts to correct that reality. Those efforts ultimately culminated in the passage of the 9 August Resolutions.
179 As has been noted, those resolutions were first proposed in early July 2023. They prompted some opposition from Mr Jolly. On 14 July 2023, he wrote to Mr Sharma, complaining that what was proposed would involve an exercise of power “…in bad faith and for an ulterior and extraneous purpose, namely…hindering or obstructing the withdrawal of the VLD from the RTBU”. By written reply sent a few days later, Mr Sharma explained—consistently with what is summarised above—how it was that he came to be of the view that the Shared VLD Account was being used contrary to the requirements of the RTBU Rules. As has been noted, Mr Sharma also observed that:
…It is the duty and responsibility of all RTBU offices to ensure that the rules of the Union are respected and complied with. I have proposed the motion because I consider that the 2017 resolution is contrary to the rules of the Union and is not in the best interest of the Union because it does not provide for proper and good administration of the Union. Those are my only reasons for proposing the motion.
180 Mr Sharma gave evidence consistent with that narrative. He was not shaken from it during persistent and skilful cross-examination. I discern no reason to reject what he said about the reasons for which he did what he did; indeed, I found his evidence on those fronts (and generally) to be compelling. Contrary to what is advanced against him, Mr Sharma impressed during his time in the witness box as a person of undoubted integrity (as, I might add, did Mr Jolly).
181 Respectfully, I reject Mr Jolly’s invitation to treat Mr Sharma’s evidence with suspicion; or, otherwise, to reject it outright. On the contrary, I consider the sequence of events to be clear: the reason why Mr Sharma brought about the passage of the 9 August Resolutions was because he had formed the view that they were necessary and appropriate to address a measure of impropriety in the way that the finances of the RTBU’s Victorian branch were then being managed. That he did so was consistent with equivalent efforts that he had earlier made to address similar improprieties associated with the Rail Divisions. He was not relevantly animated by the fact that Mr Jolly had made the s 94A Application.
182 That the s 94A Application had some relevance to that course of events may be accepted. It was partly in connection with that application that Mr Jolly had occasion to complain about the Victorian branch’s financial practices; and it was partly in consequence of that complaint that Mr Sharma came to hold the views upon which he later acted. But so to acknowledge is not to accept that Mr Sharma did what he did because, or for reasons that included that, Mr Jolly commenced the s 94A Application. In ascertaining why particular adverse action was taken, the court is concerned to identify the subjective reasons of those who effected it, rather than the contextual circumstances within which those reasons came to be formed: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243 (French CJ, Hayne, Crennan, Kiefel and Gageler JJ); see also the authorities to which I referred in Serpanos v Commonwealth of Australia [2022] FCA 1226, [279]-[284].
183 There is another reason not to reject the evidence that Mr Sharma gave. The court is invited to do so on the basis that the evidence that he gave about why he brought about passage of the 9 August Resolutions was deliberately false. Even if (contrary to the observations made above about Mr Sharma’s candour and demeanour as a witness) there were a basis upon which I might suspect what Mr Jolly invites me to accept, I would nonetheless decline the invitation on the basis that it was never suggested to Mr Sharma that his evidence was deliberately false.
184 True it is, of course, that Mr Sharma was on notice that Mr Jolly would invite the court to disbelieve his evidence, and to conclude (whether as a matter of inference or by reason of the statutory presumption in s 361(1) of the FW Act—or both) that his motivations for supporting the 9 August Resolutions included motivations that were proscribed by pt 3-1 of the FW Act. There can be no suggestion that the court should reject Mr Jolly’s invitation by application of the rule in Browne v Dunn (1893) 6 R 67.
185 Nonetheless, the court should, I think, be slow to draw conclusions adverse to Mr Sharma—or, worse, conclusions that are consistent with the hypothesis that he deliberately gave false evidence—in circumstances where he was not given an opportunity in the witness box to say why they ought not to be drawn: see, in that regard, Curwen v Vanbreck Pty Ltd (2009) 26 VR 335, 349-350 [28]-[29] (Redlich and Bongiorno JJA and Hansen AJA).
186 For obvious reasons, it is unnecessary to make any more of that. I regard the evidence that Mr Sharma gave about why he did what he did in support of the 9 August Resolutions as truthful and forthright, and I accept it. He did not bring about the passage of those resolutions because, or for reasons that included that, Mr Jolly had exercised a workplace right.
187 Mr Jolly’s claim to relief under pt 3-1 of the FW Act must be rejected.
Conclusion
188 None of the causes that Mr Jolly pursues is made good. The amended originating application of 10 October 2023 should and will be dismissed. It is unnecessary to make any order in connection with the injunctive interlocutory relief that was extended on 3 October 2023. It will, by its terms, discharge upon the order for dismissal.
189 Both the FW(RO) Act and the FW Act restrict the court’s power to award costs and, in any event, the respondents do not seek orders of that kind. There shall be no order as to costs.
I certify that the preceding one hundred and eighty-nine (189) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Snaden. |
Associate:
SCHEDULE OF PARTIES
VID 632 of 2023 | |
CATE ROSSER | |
Fifth Respondent: | BRYAN EVANS |
Sixth Respondent: | DARREN GALEA |
Seventh Respondent: | JOE DENNIS |
Eighth Respondent: | CHRIS MCMAHON |
Ninth Respondent: | JOHN NICOLOPOULOS |
Tenth Respondent: | VICTOR MOORE |
Eleventh Respondent: | PETER VEIS |
Twelfth Respondent: | JON SAW |
Thirteenth Respondent: | CATHY BIRCH |
Fourteenth Respondent: | SALLY VAN BRAGT |
Fifteenth Respondent: | PAUL JUMPERTZ |
Sixteenth Respondent: | ANGELA LARDNER |
Seventeenth Respondent: | CATHERINE NOONE |
Eighteenth Respondent: | FRANK PAVIC |
Nineteenth Respondent: | JOHN ANTONOPOULOS |
Twentieth Respondent: | RUPERT BRAGANZA |
Twenty First Respondent: | WAYNE HICKS |
Twenty Second Respondent: | TARIK KOC |
Twenty Third Respondent: | AUSTRALIAN RAIL, TRAM AND BUS INDUSTRY UNION |
