FEDERAL COURT OF AUSTRALIA

Health Services Union v Asmar (Administration Decision) [2025] FCA 689

ORDERS

THE COURT DECLARES THAT:

1.    The branch of the Health Services Union known as the Victorian No.1 Branch has ceased to function effectively and there are no effective means under the rules of the organisation by which it can be enabled to function effectively.

THE COURT ORDERS THAT:

1.    Pursuant to section 323(2) of the Fair Work (Registered Organisations) Act 2009 (Cth), the scheme attached in the Appendix is approved as the scheme for the taking of action by the Health Services Union to enable the Victorian No.1 Branch to function effectively.

2.    Mr Charlie Donnelly be appointed administrator of the Victorian No.1 Branch under the scheme approved in order 1.

3.    All offices of the Victorian No.1 Branch of the Health Services Union, identified in the attached Annexure to the Appendix, are vacated.

4.    In the event of any difficulty arising from the implementation of the scheme approved in order 1, the administrator and the parties shall have liberty to apply on 48 hours written notice.

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

REASONS FOR JUDGMENT

DOWLING J

1    The Health Services Union operates pursuant to rules. Those rules set out the objects of the Union. The first of those objects is to: “uphold, foster, protect and improve the rights and interests of members … industrially and otherwise, to the best possible conditions and just remuneration and to guard them against any hardship, oppression or injustice in connection with their work”. The facts and circumstances giving rise to this application indicate that part of the Union, its Victoria No. 1 Branch, has become distracted from that object.

2    The Union applies for a declaration that the Branch has ceased to function effectively. The Union brings its application under the Fair Work (Registered Organisations) Act 2009 (Cth), which provides that organisations of employees are required to meet certain standards in order to gain the rights and privileges provided for by the Act. Those standards are designed to ensure that an organisation is representative of and accountable to its members, and that it is able to operate effectively. The Act enables an organisation to apply to the Court for a declaration that part of the organisation has ceased to function effectively, and that there are no effective means under its rules to enable it to function effectively. Together with the declaration, the Union also seeks orders approving a scheme, proposed by it, to enable the Branch to function effectively.

3    The fifteen respondents to the application are the members of the Branch Committee of Management (BCOM). The rules of the Union provide that the government, management and control of the Branch is vested in the BCOM. Some of those fifteen BCOM members hold additional offices. The first respondent, Ms Diana Asmar, is the Secretary of the Branch. The second respondent, Ms Rhonda Barclay, is the President of the Branch. The third respondent, Mr David Eden, is the Assistant Secretary of the Branch.

4    The Union’s application has arisen from events that began with a letter from the Fair Work Commission (FWC) to the Union on 26 March 2024 (the 26 March 2024 letter). The letter outlined concerns held by the FWC as a result of its investigation into the Branch. Those concerns included $124,000 in reimbursement payments made by the Branch to Ms Asmar that the FWC said were “wholly unsupported by any documentation able to be produced by the Branch”. The letter sought a response by the Branch and alternatively invited Ms Asmar to attend an interview to explain the reimbursement payments. From that time onwards there was a dispute, at least between Ms Asmar and Mr Eden, as to what action should be taken by the Branch in response to the FWC’s concerns, and how the Branch should function and be managed. Mr Eden proposed to table the 26 March 2024 letter at a BCOM meeting on 8 April 2024. Ms Asmar resisted that course. The Branch did not respond to the 26 March 2024 letter.

5    The concerns raised by the FWC, and other allegations, led the General Manager of the FWC to commence proceedings in this Court against Ms Asmar, Ms Barclay, Mr Eden, two other members of the BCOM, the Branch Finance Manager, and Ms Asmar’s husband David Asmar. The General Manager’s proceedings were commenced on 23 August 2024 and included allegations that Ms Asmar knowingly effected transfers from Branch accounts in purported reimbursement of illegitimate business expenses between August 2018 and November 2020; and, between June 2016 and June 2021, that Ms Asmar transferred $2.8 million from Branch accounts to a printing company, Southern Publishing, for no goods or services. The proceedings also allege that Ms Asmar and Mr Asmar received deposits into their personal bank account at or around the time that payments were made to Southern Publishing

6    The allegation made by the Union in this application, that the Branch has ceased to function effectively, arises from the following matters: the dispute between Ms Asmar and Mr Eden as to the operation of the Branch following the 26 March 2024 letter; the BCOM’s response to the concerns raised by the 26 March 2024 letter; the General Manager’s proceedings; the BCOM’s failure to deal with a member complaint concerning the subject matter of the 26 March 2024 letter and the General Manager’s proceeding; the standing down of a Branch employee; the ongoing division of Branch officials; the harm to the reputation of the Union, the Branch and Ms Asmar; the position of the resources and funds of the Union; the Branch’s diversion away from the industrial interests of the members; and the agreement between a number of the parties that the Branch has ceased to function effectively.

7    This is not the first time the Branch has been the subject of an application for a declaration and orders under the Act. In 2009, Tracey J declared that the Branch had ceased to function effectively: Re Health Services Union [2009] FCA 829; 187 IR 51. His Honour said at [1] that “at its root, the cause of this dysfunction has been antagonism between two groups formed by members of the Branch’s Committee of Management and their supporters within the Branch membership”. In 2012, Flick J declared that the “HSU East Branch” of the Union, a branch that at the time included the Victoria No. 1 Branch, had ceased to function effectively: Brown v Health Services Union [2012] FCA 644; 205 FCR 548. At [35], Flick J referred to the earlier decision of Tracey J as “regrettably, hav[ing] a disturbing echo with many of the facts being canvassed” in the proceeding before him. There is now cause for further regret as the Branch faces a third application about its effective functioning.

8    The Union, Ms Asmar and Mr Eden were each represented at the hearing of this application. Those parties jointly filed and relied upon an Amended Statement of Agreed Facts dated 15 January 2025 and a Statement of Further Agreed Facts dated 2 May 2025. By the Statement of Further Agreed Facts, the Union, Ms Asmar and Mr Eden agree that the Branch has ceased to function effectively and that there are no effective means under the Union’s rules to enable it to function effectively. The Union tendered affidavits from four other respondents, Ms Barclay, Ms Jacks, Mr Hargreaves and Ms Stone. Those respondents deposed to having “read and consent[ed] to” a declaration that the Branch has ceased to function effectively and an order approving the scheme of administration proposed by the Union. None of the remaining respondents appeared at the hearing. None of the respondents opposed the relief sought by the Union or put forward any different facts from those contained in the Amended Statement of Agreed Facts and the Statement of Further Agreed Facts.

9    The Act provides that the Court may determine what notice is to be given of the application made by the Union. On 2 May 2025, I ordered that the Union publish a notice on its website, on the Branch website, on the Union Facebook and Instagram page, and on the Branch Facebook page. That notice explained the Union’s application, the scheme sought by it, and the date and place for the hearing of the Union’s application. In response to that notice, Ms Jacinta Knight, a former member of the Union, appeared at the hearing. Ms Knight said that she had been a member of the Union for “30-odd years”, and that the Union had “forgotten its prime directive of representing the members”. Ms Knight’s submission is set out in more detail below. No other submissions made in response to the notice were brought to the attention of the Court.

10    I have considered and assessed the submissions, agreed facts, and other evidence before the Court. In all of the circumstances, and for the reasons that follow, I find that the Branch has ceased to function effectively, and that there are no effective means under the rules of the Union to enable it to function effectively. These reasons and orders also approve and attach a scheme for the Union to take action to enable the Branch to function effectively.

THE LEGISLATIVE PROVISIONS – SECTION 323

11    The Union brings this application pursuant to s 323(1) of the Act. That section, as is clear from the above, empowers the Court to declare that a part of an organisation has “ceased to … function effectively” and that there are no “effective means” under the rules that would enable the organisation to function effectively. Such an application may be made by the organisation or a member of the organisation with sufficient interest in relation to the organisation.

12    Once the Court makes a declaration pursuant to s 323(1), s 323(2)(b) authorises the Court to approve a “scheme for the taking of action” to “enable the branch … to function effectively”. Pursuant to s 323(3), the Court may also give ancillary or consequential directions it considers appropriate. Under s 323(4), the Court must not make any orders unless satisfied they would not do “substantial injustice” to the organisation or any member. Section 323(6) provides that the orders and directions of the Court prevail over the rules of the organisation.

HISTORY AND PRINCIPLES

13    Section 323 of the Act has its origins in s 171D of the Conciliation and Arbitration Act 1904 (Cth). Both provisions are in substantially the same terms. Section 171D was inserted in the Conciliation and Arbitration Act by amendments made in 1974. The amendments were the result of the Report of the Committee of Inquiry on Co-Ordinated Industrial Organisations delivered in 1974 by the Honourable John Sweeney, a Judge of the Australian Industrial Court. The Report provided that the proposed s 171D was a section “giving power to the Court to resuscitate any part of an organisation which has ceased to exist and where there are no practicable means within the rules of the organisation by which it can be reconstituted”: see Report at p 41. Section 171D as inserted was directed not only at a branch or part of an organisation that had ceased “to exist” but also those that had ceased to “function effectively”.

14    In the last two decades, the so called “resuscitation” of parts of organisations under s 323 of the Act has manifested as applications brought by federal unions for the Court’s approval of a remedial scheme of administration for a federally or state-registered union or branch: see, e.g., Re Health Services Union; Brown; United Firefighters' Union of Australia v United Firefighters' Union of Australia, Union of Employees, Queensland [2022] FCA 145.

15    The following principles emerge from that history of s 323, together with its words, the broader statutory scheme within the Act, and its previous consideration.

16    First, authorities dating back to s 171D of the Conciliation and Arbitration Act emphasise that whether a branch or body of an organisation has ceased to function effectively and whether there are no effective means under the rules by which it can be enabled to function effectively are questions of fact: R v Joske; Ex parte Shop, Distributive and Allied Employees’ Association (1976) 135 CLR 194 at 218 (Mason and Murphy JJ). An affirmative answer to those questions indicates the existence of a state of affairs that is sufficient to justify the Court granting a declaration pursuant to s 323(1), subject to the Court ensuring that such an order would not do substantial injustice to the organisation or a member.

17    Second, s 323 of the Act is to be construed liberally and beneficially. Smithers J made observations to this effect about s 171D in Re Application of Gallagher; Re Federated Cold Storage & Meat Preserving Employees Union of Australia (1983) 6 IR 78 at 81, referred to with approval in Re Health Services Union at [12] (Tracey J) and Brown at [32]-[34] (Flick J), as follows:

Considerable novelty may be appropriate in a scheme submitted under s 171D. It would seem that the court should be guided not by any narrow interpretation of s 171D, but should respond to the purpose of that section in the context of the Act.

…

Section 171D is in the midst of the sections last mentioned and stems from the intention of parliament to revive the effective management and administration of organisations when governing bodies have become defunct or impotent or are unable to function effectively because the rules failed to speak effectively in the relevant current circumstances. Its provisions should therefore be liberally construed.

18    Third, the statutory scheme, which includes s 323, places importance on organisations functioning effectively and the standards by which that is to be measured. The Act sets out Parliament’s intention in enacting the Act. Section 5(1) explains the intention of Parliament to enhance relations within workplaces between employers and employees and to reduce the adverse effects of industrial disputation. Section 5(2) explains that those relations will be enhanced if associations of employers and employees are “required to meet the standards set out” in the Act in order to “gain the rights and privileges” under the Act. Section 5(3) sets out the objects of the standards contained in the Act. Section 5(3)(a) provides those standards are to ensure employer and employee organisations “are representative of and accountable to their members, and are able to operate effectively”. Section 5(3)(c) provides the standards are to “encourage efficient management of organisations and high standards of accountability of organisations to their members”. The effectiveness of the Branch is to be judged against those standards and their objects as expressed in the Act.

19    Fourth, the word “effective” should be given its ordinary meaning; namely, serving to affect the purpose or producing the intended result: see Macquarie Dictionary (Pan Macmillan Australia, 2025). Such a meaning is consistent with the purpose of s 323 to restore, or resuscitate, the branch’s ability to fulfil the objects of the Union.

20    Fifth, effectiveness should be judged against the objects as set out in the rules of the Union. The Union submits, and I accept, that those objects apply “indifferently to every part of the Union and identify a range of benefits directed towards securing improvements in the rights and interests of members in their respective employments”. Those objects, as set out in the Union’s rules, include “improving the lives, including the working lives, of members and their families” and to “uphold, foster, protect and improve the rights and interests of members … industrially and otherwise, to the best possible conditions and just remuneration and to guard them against any hardship, oppression or injustice in connection with their work”. Such a measure of effectiveness includes what the Union described as “the proper and orderly functioning of the union and diversion away from the interests of members”.

21    Sixth, when assessing the effectiveness of a branch or part of an organisation, consideration should be given to its effectiveness as part of the organisation registered under the Act: here, the Branch as part of the whole Union. The role of the Branch as part of the Union is examined below.

22    Seventh, a further measure of effectiveness includes the effectiveness of the governing bodies of that part of the organisation.

23    Eighth, s 323(4) requires the Court to be satisfied that its order will not “do substantial injustice to the organisation or any of its members.” The injustice must be real, demonstrable and not trivial. In Brown, Flick J held that the loss of office caused by the making of a s 323 order was not itself a relevant injustice. His Honour extracted, with apparent approval, from Re Compaction Systems Pty Ltd and the Companies Act [1976] 2 NSWLR 477 at 493 (Bowen CJ in Eq) the consideration of a similar statutory provision in the Companies Act 1961 (NSW):

In my view, the word “injustice” in this provision requires the Court to consider any real, and not merely insubstantial or theoretical, prejudice which will be suffered by, for example, a member by the making of an order, and to weigh this in the scales against the prejudice to the company, other members and creditors, if an order be not made. In other words, it is insufficient to show that there may be some prejudice to a member if, on a consideration of the whole matter, the overwhelming weight of justice, as it were, is in favour of making the order

24    Ninth, the relevant test time for assessing whether the Branch has ceased to function effectively is the time at which the Court is making the declaration provided for by s 323(1).

25    Tenth, in satisfying the Court that there are no effective means under the rules to enable the Branch to function effectively, it is not necessary for the Union to establish that it has exhausted the potential operation of each rule that may have some bearing on the effective functioning of the Branch. Uncertainty about the effect of a rule and what it authorises is a basis to conclude that the rules do not afford an effective remedy: see Brown at [88].

THE OPERATION OF THE BRANCH AND ITS OFFICERS

26    Consistent with considering the effectiveness of the Branch as part of the Union as a whole, and against the Union’s objects, it is necessary to say something about where the Branch sits within the Union structures, including its interaction with the National Council and National Executive. It is also necessary to say something about the role of the Branch Secretary, Assistant Secretary and President. Each of those officers agree that the Branch has ceased to function effectively and that there are no means under the rules of the Union to enable it to function effectively.

27    Rule 38(a) of the rules establishes a number of Branches of the Union. Those branches include the Victoria No. 1 Branch. Rule 38(b) attaches all members of the Union, employed in Victoria, to the Branch, except those referred to in the categories identified in rule 38(b)(i)-(iii).

28    Rule 35(a) provides for the “rights of branches” as follows:

All Branches shall be completely and absolutely autonomous within the ambit of these rules, and shall be responsible for their own Government and administration. The Branch shall be the basic unit of the Union, and shall possess full and adequate powers to conduct its own affairs and to seek its objectives under the rules. The control of the Branch resides exclusively in the members of the Branch, who shall be bound by these Rules. This rule can never be altered except by a ballot of all financial members of the Union. Such alteration to be carried must receive a majority vote of two thirds of the financial members of the Union.

29    The Branch itself is not a registered organisation under the Act. It is not a legal entity: see Williams v Hursey (1959) 103 CLR 30 at 54-55 (Fullagar J, with whom Kitto J agreed at 86), 89 (Taylor J), 132 (Menzies J). The Branch operates within the structures and rules of the Union. The officers of the Branch are officers of the Union and derive their authority from the rules of the Union.

30    Rule 39(a) provides that the government, management and the control of the affairs of the Branch is vested in the BCOM but that is “subject to … [the] rules and any proper direction of the National Council or the National Executive”.

31    Rule 39(d) provides that each branch “may make rules from time to time for its own internal management and may therefore add to, amend, rescind or alter any of these rules insofar as they relate to the internal management of a Branch through its Branch Committee of Management or by a special general meeting of its members”.

32    The authority, role and duties of the Branch Secretary are provided for by rule 48. The Secretary is the chief executive officer of the Branch and has charge of the general conduct, administration and business of the Branch. The Branch Secretary shall, amongst other matters:

(1)    receive or cause to be received all moneys on behalf of the Branch;

(2)    have charge of the financial books and statements of the Branch;

(3)    conduct the business and correspondence on behalf of the Branch;

(4)    subject to any direction of the BCOM appoint, engage, control and dismiss such staff as may be necessary for the conduct of the Branch; and

(5)    prepare returns required by the Act and the Fair Work Act 2009 (Cth).

33    The authority, role and duties of the Branch Assistant Secretary are provided for by rule 49. The Branch Assistant Secretary shall assist the Branch Secretary at all times in the execution of her duties. He shall be subject to the direction of the Branch Secretary and act in her stead whenever appointed to do so by the BCOM.

34    Rule 46 provides that the Branch President shall be the official head of the Branch. She shall preside at all meetings of the Branch and the BCOM. She is to generally ensure the well-being of the Union and its members and the carrying out of the objects of the Union within the area administered by the Branch.

35    The National Council is the supreme governing body of the Union and has the management and control of the affairs of the Union. The National Council has the power to delegate its authority on “all routine and other matters to the National Executive”. Subject to special meetings, the National Council meets annually: rule 17. The National Executive must meet at least four times each year and shall have the power to manage, control and conduct the business and affairs of the Union: rules 21-22.

DEALING WITH THE RELEVANT FACTS

Approach to factual findings

36    The Union submitted, and I agree, that it is not a necessary component of s 323(1) of the Act that the state of ineffective function be caused by improper and unlawful conduct. This follows from the relief anticipated by s 323(2)(b), which directs itself at measures to enable effective function, rather than measures to, for example, assign blame for maladministration.

37    This approach reflects the reasoning of Flick J in Brown, who was himself presented with a list of agreed dysfunctions that emanated from competing allegations of misconduct by union officials and members that resulted in antagonism and division within the Branch. At [66]-[68], Flick J concluded that it was unnecessary to resolve the competing factual allegations and disputes that divided the opposing parties or determine whether one of the opposing parties is justified in the position for which they advocate. His Honour emphasised that it is the fact and effect of disputation on the branch’s functionality that matters.

Agreed facts

38    The Amended Statement of Agreed Facts and Statement of Further Agreed Facts were made jointly between some, but not all, of the parties to the present proceeding. Those parties are the Union, Ms Asmar and Mr Eden, and are referred to as the consenting parties. The consenting parties rely on these two documents to satisfy the Court that the factual preconditions of a s 323(1) declaration exist. These documents cannot be regarded as “agreed facts” for the purpose of s 191 of the Evidence Act 1995 (Cth), as they do not contain the agreement of all the parties to the proceeding relevantly required by s 191(1). However, this does not preclude me from accepting the facts contained in these documents or relying on the consent position as between the consenting parties to grant relief: see, e.g. Australian Competition and Consumer Commission v Australian Medical Association (WA Branch) [2001] FCA 1471; 114 FCR 91 at [34]-[36] (Carr J).

39    In taking this course, I am also assisted by the fact that the consenting parties are the Union and two officers of the Branch with the authority under the rules to govern the affairs of the Branch. The consenting parties are in strong positions to know about the Branch’s functionality, and I place significant weight upon their view. I am also assisted by the fact that none of the respondents to this proceeding put forward different facts from those agreed.

A declaration based on agreed facts

40    In Brown at [65], Flick J, presented with an agreed statement of facts, expressed “some misgiving” about the prospect of granting declaratory relief based solely on agreed facts. As a result, his Honour determined to independently review a number of affidavits tendered in that proceeding. Nevertheless, his Honour concluded that the agreed facts operated as the primary factual basis for the declaratory conclusion, while the affidavits served to confirm the factual position presented in the agreed facts: at [65]-[68] and [186].

41    The source of the declaratory misgivings raised by Flick J appeared to be twofold.

42    First, Flick J said at [90] that the nature of a declaration authorised by s 323(1) “may be curious” because it “may fall short of what may otherwise be regarded as a ‘declaration of right’” under s 21 of the Federal Court of Australia Act 1976 (Cth). Section 21 confers power on the Court, in civil proceedings in relation to a matter in which the Court has original jurisdiction, to make binding declarations of right whether or not any consequential relief is or could be claimed.

43    At [91] of Brown, Flick J observed that, on one view, the nature of a declaration under s 323(1) is “more akin to a declaration of fact” as opposed to a declaration of right. However, his Honour then referred to the judgments of Mason and Murphy JJ in Joske (at 218), where their Honours found issues the subject of an inquiry pursuant to s 171D of the Conciliation and Arbitration Act were “issues of fact well suited to judicial determination”. This appeared to satisfy his Honour that the declaration sought was one of right.

44    Indeed, I find that while making a s 323(1) declaration might involve consideration of a factual controversy, being whether the factual basis might support a conclusion that an organisation has ceased to function effectively and that there are no effective means under the organisation’s rules to enable effective function, ultimately that controversy is one involving legal rights that will produce foreseeable consequences for the parties that have a real interest in the matter. A s 323(1) declaration is properly characterised as a declaration of right and not a declaration of the primary facts which led to the right being established. I note also that the word “right” in this context “is wide and loose” and “includes what might more precisely be described as privileges, powers and immunities”: Sankey v Whitlam (1978) 142 CLR 1 at 23 (Gibbs ACJ), see also, for consideration of a declaration of right, DMH20 v Minister for Home Affairs [2023] FCAFC 31; 296 FCR 256 at [19]-[27] (Charlesworth, Thawley and Kennett JJ) and Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581–582 (Mason CJ, Dawson, Toohey and Gaudron JJ).

45    Second, in Brown at [93]-[94], Flick J recognised a debate in the authorities as to the appropriateness of making declaratory orders on the basis of agreed facts. His Honour noted what had been described as an established rule: that it is generally undesirable for the court to grant declaratory relief in the absence of any contest on the question, citing BMI Ltd v Federated Clerks’ Union of Australia (NSW) Branch (1983) 51 ALR 401 at 413; 76 FLR 141 at 153 (Keely and Beaumont JJ). However, his Honour further noted that it is not the court’s function to impede settlement to litigation, especially in circumstances where the parties are represented. His Honour additionally observed that it is not required that there be a contest on the question before the court may grant declaratory relief, citing Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; 201 FCR 378 at [30] (Greenwood, Logan and Yates JJ).

46    Flick J did not say anything further on these approaches. His Honour concluded that it was appropriate to grant declaratory relief while noting that “whatever position is adopted, ‘close attention’ should be given ‘to the form of proposed declarations, particularly those by consent’”: at [95]–[97], citing Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; 216 CLR 53 at [90] (Gummow, Hayne and Heydon JJ).

47    In the present circumstances, I am satisfied that it is appropriate to grant the declaratory relief. I also say the following about the authorities referred to by Flick J.

48    BMI stood for the proposition that declaratory relief should not be granted absent a contradictor. In BMI, a contradictor was understood as a party who argued to the contrary. This principle has resonance in the present proceeding; no party argued against the relief sought by the consenting parties that the scheme be approved and the Branch has ceased to function effectively.

49    In Australian Competition and Consumer Commission v MSY Technology (No 2) [2011] FCA 382; 279 ALR 609, however, Perram J questioned the correctness of this principle, finding that the authorities relied on in BMI did not stand for the proposition that there must be a contradictor who argues to the contrary. Rather, his Honour considered that a contradictor should be understood as a party whose interests are opposed to the others and who can be bound by the outcome: at [28]-[48]. On this approach, respondents consenting to a statement of agreed facts may still be viewed as contradictors notwithstanding their consent position if they have an interest in opposing the declaration sought.

50    Ultimately, Perram J considered himself bound by the approach taken by Keely and Beaumont JJ in BMI that consenting defendants did not constitute proper contradictors: at [41]-[43]. However, on appeal to the Full Court, Greenwood, Logan and Yates JJ agreed with the observations of Perram J that the joint judgment in BMI evidenced a misunderstanding of the authorities. Greenwood, Logan and Yates JJ found that a “proper contradictor” is one with an interest to oppose the declaratory relief sought: Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; 201 FCR 378 at [30].

51    On this basis, I consider that the respondents to this proceeding had an interest in opposing the declarations sought because, among other things, the declarations sought would lead to the vacation of their offices.

52    Though not explicitly referenced by Flick J in Brown, the Union raised Kiefel J’s approach in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427; 236 ALR 665. At [58]-[59], Kiefel J questioned the practice of refusing to make a declaration based on admissions, relevantly stating:

[58] Refusals to make declarations in cases of default are based upon a practice, not a rule of law. The practice is one of long standing and might be seen as derived from views about litigation which pre-date more recent concerns expressed by the courts as to the costs of unnecessary litigation, the management of cases and efficiency overall. …

[59] It may no longer be correct to have a practice which operates as a prohibition in every case of default and preferable to consider the circumstances pertaining to the particular case and the purpose and effect of the declaration … Cases such as this, involving the protection of consumers, are of public interest. Declarations are often utilised in such cases to identify for the public what conduct contributes a contravention and to make apparent that it is considered to warrant an order recognising its seriousness. It is however important that there be no misunderstanding as to the basis upon which they are made. This could be overcome by a statement, preceding the declarations, that orders are made “upon admissions which [the respondent in question] is taken to have made, consequent upon non-compliance with orders of the Court”.

(Original emphasis.)

53    Kiefel J’s approach was upheld by the Full Court in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 at [91]-[92], and has subsequently been followed in decisions of this Court including Australian Competition and Consumer Commission v EDirect Pty Ltd (in liq) [2012] FCA 976; 206 FCR 160 at [23]-[39] (Reeves J) and a significant number of other authorities identified by Reeves J at [23] of that decision. Reeves J confirmed this position again in Australian Competition and Consumer Commission v Adata (Vic) Pty Ltd (No 3) [2015] FCA 583 at [22], where his Honour observed that “it is now also well established that this court can make declaratory orders based on deemed admissions or agreed facts”. It has also been the practice that civil penalty proceedings under the Fair Work Act 2009 (Cth) are determined on the basis of agreed facts which supported declarations: see, e.g. Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (CFMEU) [2017] FCAFC 113; 254 FCR 68 at [87]-[95] (Dowsett, Greenwood and Wigney JJ).

54    Having regard to circumstances pertaining to the particular case and the purpose and effect of the declaration sought, as Kiefel J’s approach in Dataline encourages, it is apparent that s 323(1) of the Act is used within the statutory scheme as a vehicle for the Court to articulate findings that serve as a basis for, and precursor of, the Court’s consideration of what should be done to enable a branch to function effectively. It appears adverse to the statutory scheme that, where the parties agree that an organisation or Branch has ceased to function effectively and agree the facts in support of that position, the Court would require further evidence of that matter. Doing so has the potential to lead to the dysfunction being exacerbated. Proceeding on agreed facts in the present circumstances additionally promotes the overarching purpose of civil litigation, including by reducing the costs to parties, the Union and the Branch of an extended trial.

55    In taking this course, I still consider it prudent to give separate and independent consideration to the factual basis underlying the reasons why the Branch has ceased to function effectively, as was the approach taken by Flick J in Brown at [96]. In doing so, I have additionally weighed up whether each fact relied upon should be taken into consideration, and the extent that I rely on it in reaching my finding.

The relevance of interlocutory findings

56    The Union’s submissions sought that I consider my previous interlocutory findings in this matter, including my findings and order of 13 December 2024 restraining Ms Asmar from carrying out her duties as Branch Secretary and restricting the ability of the respondents to dismiss, discipline or change the duties and work practices of Branch employees, and my order of 23 December 2024 approving a scheme of interim administration pending the hearing and determination of the Originating Application.

57    In the present circumstances, I do not think it appropriate to rely on interlocutory findings when concluding factual matters at final hearing. Those interlocutory findings relied on affidavit evidence that is no longer before me in the present proceeding and were determined in the context of serious question and balance of convenience inquiries.

58    While it is true to say that the content of interlocutory applications might reveal disputes about the way the Branch is managed, that should be the extent of the reliance on the interlocutory application. The outcome of those hearings does not create facts that are determinative of whether final relief ought to be granted.

Weight to be given to the view of the national governing bodies

59    The Union’s submissions also sought for the Court to give “considerable weight” to the “view of the supreme governing body of the HSU”. The national governing bodies’ view was that the Branch “is dysfunctional and requires the Scheme to enable it to function effectively as part of the broader union”. To support its submission, the Union stated that under the rules, and in particular rules 20 and 35, the National Executive is given the function of expressing the interests of the union. This proposition, that the views of the national governing bodies’ should be given considerable weight, was not a feature in the reasons of previous authorities considering s 323 of the Act.

60    I consider that the view of the national governing bodies’ should be given some weight, but it should not rise to the level of “considerable weight”. The view of the national governing bodies’ should not be determinative.

CEASE TO FUNCTION EFFECTIVELY

The agreement and summary of facts

61    In the application before me, the consenting parties have reached an agreement that the Branch has ceased to function effectively and that there are no effective means under the rules that would enable the Branch to function effectively.

62    This agreement reached by the consenting parties is significant. In particular, I give significant weight to the fact that the Branch Secretary, Branch Assistant Secretary and Branch President have expressly consented to the making of a declaration and approval of the scheme on the basis of the agreed facts. These individuals are in the best place to know about the Branch’s functionality. This too was the approach taken by Flick J in Brown, where his Honour placed emphasis on the fact that the relevant parties had agreed that the branch had ceased to function effectively: see Brown at [62], [66]-[68] and [186].

63    As explained, whether a registered organisation or a branch thereof has ceased to function effectively is a question of fact: Joske at 218 (Mason and Murphy JJ). In the agreement, the consenting parties rely on certain facts and circumstances that they say, taken together, should found a s 323(1) declaration. These facts and circumstances may be grouped in the following way:

(1)    Division at the Branch officials’ level from 26 March 2024;

(2)    BCOM’s response to, and forensic investigation of, the matters disclosed in the 26 March 2024 letter;

(3)    The General Manager’s proceedings;

(4)    Decision of the BCOM to take no action about Ms Mack’s complaint against Ms Asmar or abide by the demands of the National Executive on 23 August 2024;

(5)    The standing down of Jake McGuinness;

(6)    This Court’s interlocutory findings;

(7)    The ongoing division at the Branch officials’ level;

(8)    The harm to the reputation of the Branch, the Union and Ms Asmar due to media reporting;

(9)    The resources and funds of the Branch;

(10)    The diversion away from the interests of the members; and

(11)    The agreement between the parties.

64    These facts and circumstances form the basis of my conclusion. The Branch has ceased to function effectively. Having given separate and independent consideration to the basis underlying each of the facts and circumstances raised by the consenting parties, I do not find any reason for me to travel beyond the agreed facts in concluding that the Branch has ceased to function effectively. Except where explicitly identified below, I give each fact and circumstance weight in reaching my conclusion.

The additional propositions of the Union

65    For completeness, I note that in addition to the facts relied on in the consenting parties’ agreement, the Union’s submissions raised a number of further propositions that it sought I take into account when determining whether to grant a s 323(1) declaration. The Union emphasised, however, that the agreed facts alone ought to be sufficient in founding a s 323(1) declaration. The utility of the Union’s additional propositions were, as stated by the Union at the hearing, to raise “matters that are quite significant in terms of the way in which that ineffective function has manifested itself”.

66    At the hearing, Ms Asmar submitted that there is no need for the Court to travel beyond the agreed facts and accept the additional propositions advanced by the Union. She said that was so for three reasons. First, the additional propositions are contested, and untested, in Court. Second, there is overlap between the additional propositions and the General Manager’s proceedings that are on foot in this Court and in which civil penalties are sought. Third, the additional propositions concern alleged reprisal conduct that is being investigated by the FWC and has the potential to result in another civil penalty proceeding. Ms Asmar submitted that the Court should be careful not to prejudice that potential proceeding by making comment on this matter.

67    As I have determined that the agreed facts alone were sufficient in concluding that the Branch had ceased to function effectively, there is no need for me to make findings as to the additional propositions raised by the Union.

68    The facts and circumstances raised in the consenting parties’ agreement are as follows.

Division at the Branch officials’ level from 26 March 2024

69    The consenting parties submitted that the origin of the dysfunction is a letter sent by Mr Patrick Coyle of the FWC to the Union on 26 March 2024. In the letter, Mr Coyle summarises a number of “concerns” identified by the FWC in the investigation to that date, noting that the FWC has observed that $124,000 had been paid to Ms Asmar as a reimbursement that was unaccounted for by receipts or other sufficient documentation. The 26 March 2024 letter invited Ms Asmar and the BCOM to provide an explanation for the reimbursement payments.

70    The consenting parties submit that this letter was the trigger point for the division between the Branch’s two paid officials, Ms Asmar and Mr Eden, who, from March 2024 onwards, have been opposed in their views as to how the Branch should function and be managed. This disagreement has precipitated division within the BCOM.

71    Following the 26 March 2024 letter, the consenting parties say that Mr Eden attended the home of Mr Atkinson, the Branch Senior Lead Organiser and Senior Vice President, and said that he intended to put the 26 March 2024 letter to the BCOM at its meeting on 8 April 2024. He also said that he would ask the BCOM to take action, including standing down Ms Asmar.

72    On 8 April 2024, the consenting parties say that the BCOM resolved to direct Mr Eden to work from home, not attend the Branch’s offices or interact with other Branch officials or employees. The BCOM additionally commenced an investigation into allegations that Mr Eden had engaged in workplace bullying. Mr Eden denied that he has ever bullied any person in the workplace.

73    I understand from the submissions of the consenting parties that the impact of this disagreement to the effective function of the Branch is that Ms Asmar and Mr Eden, and by extension, the BCOM, have developed intractable and entrenched differences of opinion that mean they are unable to cooperate in administering the Branch.

BCOM’s response to, and forensic investigation of, the matters disclosed in the 26 March 2024 letter

Failure to provide explanation for reimbursement payments to FWC

74    The consenting parties say that as at 8 April 2024, the members of the BCOM knew about the 26 March 2024 letter and Mr Coyle’s invitation for Ms Asmar and the BCOM to provide an explanation for the reimbursement payments. However, neither the BCOM nor Ms Asmar provided an explanation to the FWC.

Standing down of Ms Georgiev

75    The consenting parties said that, on 30 May 2024, Ms Asmar wrote to the Branch’s Finance Officer, Ms Georgiev, about the allegations contained in the 26 March 2024 letter. Having regard to Ms Georgiev’s role in record keeping within the Branch, Ms Asmar determined to stand down Ms Georgiev with pay, effective immediately.

76    I do not weigh this as a factor in finding that the Branch has ceased to function effectively. None of the consenting parties made any specific submission as to why this fact may serve as an indicator of ineffective function.

Failure to provide explanation for reimbursement payments to the National Executive

77    The consenting parties also say that neither the BCOM nor Branch Secretary provided an explanation to the National Secretary or the National Executive about the reimbursement payments made to Ms Asmar from Branch funds that were the subject of the 26 March 2024 letter, other than to say that “they had already taken action to address them”.

Failure to take action on BDO report

78    The consenting parties further submit that on 3 June 2024, the BCOM appointed BDO Australia to conduct a forensic audit for the purpose of assisting the Branch to respond to the reimbursement allegations contained in the 26 March 2024 letter. The BDO report was produced and is dated 6 August 2024. On this date, it was provided to Maurice Blackburn (the solicitors for the Branch) and Ms Asmar and Mr Atkinson. The consenting parties emphasised that the BDO report was never tabled at a meeting of the BCOM, nor was it provided to the National Executive. There was no explanation for that failure to table or provide the BDO report.

Failure to implement resolution of the National Executive

79    On 13 August 2024, the National Executive resolved that a forensic financial, membership, policy and systems audit of the Branch be conducted by an agreed independent forensic auditor with the provision of the auditor’s report to the National Executive and the BCOM. The consenting parties say that neither the BCOM nor the Branch Secretary implemented this resolution.

80    I take from the submissions of the consenting parties that the impact of these facts (being the facts at [74]-[79]) to the effective function of the Branch is that the BCOM failed to prudently respond to the serious allegations contained within the 26 March 2024 letter to the effect that serious allegations relating to the Union were withheld from the National Executive and members of the BCOM itself, and cooperation with the National Executive in relation to these matters was inadequate.

The General Manager’s proceedings

Commencement of the General Manager’s proceedings and severity of its allegations

81    Proceedings were commenced by the FWC on 23 August 2024. The consenting parties summarise the allegations in the General Manager’s proceedings as follows:

(1)    Ms Asmar was illegitimately paid $122,556 as business reimbursements in contravention of the Branch’s reimbursement policy; and

(2)    Between 20 June 2016 and 30 June 2021, Ms Asmar was a beneficiary of payments made by the Branch to a printing company called Southern Publishing in the amount of $2,799,282 and that Southern Publishing did not provide goods or services to the Branch as consideration for those payments.

82    The consenting parties emphasise that they rely on the severity of these allegations in demonstrating that the Branch has ceased to function effectively. They stress that the allegations are unproven and are being defended.

The proportion of the BCOM who are affected by General Manager’s proceedings

83    The consenting parties also note that five members of the BCOM are respondents to the General Manager’s proceedings, and a number of respondents to those proceedings also hold employment positions in the branch.

84    I take from the submissions of the consenting parties that the impact of the General Manager’s proceedings on the effective function of the Branch is that it has diverted time and resources of the Branch away from representing the industrial interests of members. Additionally, the General Manager’s proceedings has provided a further object for which the BCOM is divided in its response.

Decision of the BCOM to take no action about Ms Macks’ complaint against Ms Asmar or abide by the demands of the National Executive on 23 August 2024

85    The consenting parties also draw attention to the complaint made by Ms Brianna Macks against Ms Asmar on 13 August 2024. Ms Macks’ complaint charged Ms Asmar with misappropriation of Union funds, substantial breach of the rules, gross misbehaviour in relation to her office, and gross neglect of duties in the conduct of her office. Ms Macks’ complaint relied on the contents of the 26 March 2024 letter. Ms Macks’ complaint was made pursuant to rule 54 of the rules, which confers responsibility on the BCOM to investigate grievances and disputes submitted by its members.

86    On 23 August 2024, the National Executive demanded that the BCOM deal with Ms Macks’ complaint as a matter of urgency.

87    The consenting parties say that the BCOM never met to hear and determine Ms Macks’ complaint. Rather, at an 11 November 2024 BCOM meeting, the BCOM resolved to take no action in relation to the complaint.

88    I consider that these circumstances are demonstrative of the BCOM failing to carry out its duties under the rules of the Union (including rule 39(a)) and support a conclusion that the Branch has ceased to function effectively.

The standing down of Jake McGuinness

89    The consenting parties additionally drew the Court’s attention to the BCOM’s resolution on 11 November 2024 to stand down Mr Jake McGuinness, the Branch’s Chief Communications Officer, and direct him not to perform any employment duties or attend the Union offices pending an external investigation into unspecified allegations of gross misconduct. The Union’s Further Amended Concise Statement provides that this action occurred after Mr McGuinness had provided information to the Union’s solicitor for the purposes of this proceeding. The consenting parties say that this event is relevant to the overall assessment of whether or not the Branch ceased to function effectively. The connection between this matter and the Branch’s effective function is that it demonstrates the Branch’s difficulties in managing staff.

This Court’s interlocutory findings

90    The consenting parties noted two of the Court’s interlocutory findings. The first is Health Services Union v Asmar (No 2) [2024] FCA 1442, where I relevantly found that it was appropriate to make orders restraining Ms Asmar from carrying out her duties as Branch Secretary and restricting the ability of the respondents to dismiss, discipline or change the duties and work practices of Branch Employees: at [133]. My orders to this effect were made on 13 December 2024. The second interlocutory finding relied on by the consenting parties is my order approving a scheme of interim administration pending the hearing and determination of the Originating Application. This order was made on 23 December 2024.

91    As explained at [57], I do not factor in these interlocutory findings into my conclusion that the Branch has ceased to function effectively. My interlocutory findings were made based on evidence that is not before me in the present proceeding, and were determined in the context of of balance of convenience and serious question inquiries.

The ongoing division at the Branch officials’ level

92    The consenting parties emphasise that the disagreement at the Branch officials’ level described earlier at [69]-[73] has persisted to the present date. The parties submitted that by the time the interim administrator was appointed in December 2024, there were significant differences of opinion in the BCOM about how to respond to the various legal proceedings on foot at the time and the best way to administer the Branch. The consenting parties say that given these differences of opinion, it is unlikely that the BCOM, given its current composition and the significant differences that divide it, will be able to effectively address the ongoing legal proceedings and the administration of the Branch.

93    The relevance of this to the dysfunction within the Branch appears to be that given the BCOM has been unable to resolve its differences and divisions in the months following March 2024, it is unlikely that they will be able to move past those differences.

The harm to the reputation of the Branch, the Union and Ms Asmar due to media reporting

94    The consenting parties also submit that the significant media reporting about the Branch regarding this proceeding and the General Manager’s proceedings and accompanying investigation have been harmful to the reputations of the Branch, the Union and Ms Asmar, and this harm has contributed to the dysfunction in the Branch.

95    While neither party explicitly addressed what the connection between this circumstance is to the dysfunction of the Branch, I understand that significant, and negative, media reporting relating to the Branch may distract the Branch from its objects, and impact the Branch’s ability to attract members. This may exacerbate the fragile financial position that the Branch is in.

The resources and funds of the Branch

96    The consenting parties made two submissions concerning the dysfunction emanating from the Branch’s use of resources and its fragile financial position.

The Branch’s worsening financial position

97    First, the consenting parties noted the worsening financial position of the Branch. The parties made reference to the Branch’s 2024 financial report, signed by Ms Asmar on 9 December 2024, which relevantly states that:

At the date of this report the organisation owes approximately $343,000 to solicitors and is indebted to the ATO for a sum more than $760,000 which is overdue, collectively $1,103,000. Unless the entity is able to generate funds to meet these obligations from an asset sale, additional borrowings or reduced operating costs, there would be uncertainty as to how these obligations will be met. The foregoing uncertainty casts doubt on the ability of the entity to continue as a going concern and affects the carrying value of accounts receivable, stock and fixed assets which, if not realised in the ordinary course of business, are unlikely to realise their carrying values.

98    The consenting parties submitted that the Branch’s financial position deteriorated following the date of that report and the instigation of the General Manager’s proceedings. The parties emphasise that the Branch needs careful and stable financial management to ensure its solvency.

Diversion of the Branch’s resources

99    Second, the consenting parties submitted that by reason of the litigation involving the Branch, the resources of the Branch have been in part diverted away from representing the industrial interests of members.

100    The consenting parties noted that as at 28 February 2025, the Branch owed the following amounts in legal costs:

(1)    Maurice Blackburn - $232,816.54;

(2)    Holding Redlich - $100,364.40; and

(3)    Davies Lawyers - $50,655.00.

101    The Branch’s worsening financial position impacts its effective functioning in a number of ways. The Branch retains responsibility for a number of employees and will bear the cost of the administration, and as such the need for its careful financial management is acute. Additionally, lacking in financial resources, it jeopardises the Branch’s ability to direct its full attention to the industrial interests of its members.

The diversion away from the interests of the members

102    The consenting parties submitted that the effect of the facts and circumstances described above, and in particular the litigation involving the Branch has diverted the resources of the Branch away from representing the industrial interests of members. While the diversion away from the interests of the members is a feature of a number of the previous facts and circumstances that I consider, I also consider this as a discrete consideration as to why the Branch has ceased to function effectively.

Agreement between the parties

103    I also consider the consenting parties’ agreement as a discrete consideration that the Branch has ceased to function effectively. As explained at [39], certain parties to the agreement, including Ms Asmar, Mr Eden and Ms Barclay, are all in strong positions to know about the Branch’s effective function due to their senior positions within the Branch and the wide ambit of their functions in the Branch under the rules.

Conclusion on effective functioning

104    I am satisfied that, in the present circumstances, the Branch has ceased to function effectively. Consistent with the approach of Flick J in Brown, I place significant weight on the agreed position reached by the consenting parties to this effect. Also consistent with the approach of Flick J, as stated at [96] of Brown, I have given separate and independent consideration to each fact and circumstance that the consenting parties put before me.

NO EFFECTIVE MEANS UNDER THE RULES

Agreement

105    The Union, Branch Secretary, Branch Assistant Secretary and Branch President all agree that there are no effective means under the rules of the Union to enable the Branch to function effectively. The Statement of Further Agreed Facts, relied upon by the Union, the Branch Secretary Ms Asmar, and the Branch Assistant Secretary Mr Eden, expressly provides that there are no effective means under the rules to enable the Branch to function effectively. The Union tendered an affidavit of the Branch President, Ms Barclay, deposing to the same effect. I weigh that agreement in my consideration, but I separately assess whether there are any effective means under the rules of the Union to enable the Branch to function effectively.

106    The Union submits, and I accept, that the “National Executive, the National Secretary and the National President have unsuccessfully attempted to secure accountability” in an effort to cure or reduce the dysfunction of the Branch, including by:

(1)    resolving that a forensic, financial, membership, policy and systems audit of the Branch be conducted by an agreed forensic auditor, raised at [79];

(2)    demanding that the BCOM determine the complaint made by Ms Macks against Ms Asmar, raised at [85]-[88];

(3)    unanimously demanding that Ms Asmar stand down pending the conclusion of the FWC’s investigation and offering to assist with the governance of the Union during that period; and

(4)    unanimously calling upon the BCOM to consent to administration.

The consenting parties agree, and I accept, that those attempts were unsuccessful in ensuring the effective functioning of the Branch.

Autonomy

107    The Union rely upon the Branch autonomy provisions in the rules. It submits that that autonomy prevents any effective means under the rules to enable the Branch to function effectively. It says that “if the Court is satisfied that the autonomous function of the Union is ineffective, it follows there are no presently effective means to alter that situation”.

108    As described above, rule 35 confers autonomy upon the Union in respect of its government and administration. Rule 48 confers on Ms Asmar, as the Branch Secretary, the general conduct, administration and business of the Branch as its chief executive officer. Rule 44 confers power on the BCOM to transact the business of the Branch and to generally watch the interests of the Union in the area in which the Branch is established. Importantly, the Branch holds and controls the income derived from Union members attached to the Branch (see rule 53(a)(ii)). Ms Asmar and the BCOM are the Branch officials with responsibility for the proper administration of those funds.

109    The dysfunction of the Branch has occurred in this autonomous context. Subject to the matters below, that autonomy restricts the ability of the rules to provide for effective means to enable the Branch to operate effectively when the dysfunction stems from that autonomous operation by the BCOM and Branch offices.

Rule 54 complaint process

110    As set out above, on 13 August 2024 Ms Brianna Macks, as a member of the Union, made a complaint to the Branch President (Ms Barclay) and the BCOM, charging Ms Asmar with misappropriation of Union funds, substantial breach of the rules, gross misbehaviour in relation to her office, and gross neglect of duties in the conduct of her office. That complaint was made under rule 54 of the Union rules. On 23 August 2024, the National Executive demanded that the BCOM deal with Ms Macks’ complaint. The BCOM has not met to hear and determine Ms Macks’ complaint. On 11 November 2024 it resolved to take no action in relation to the complaint.

111    The Union relies upon these circumstances to add to the dysfunction within the Branch, but also to demonstrate that that process did not provide any effective means under the rules to enable the Branch to function effectively. I accept that submission, and the further submission that the rules do not provide an appeal in circumstances where the BCOM refuses to deal with such a complaint.

Elections

112    By its written submissions the Union says: “Under rule 23A of the Rules, the union’s election cycle, including for the Branch, will not occur until mid-2026. Nominations open on 1 June 2026. There is no suggestion that an election would be required sooner than this under another rule of the Union.” I understood this to include a submission that the rules, in the present circumstances, do not permit the conduct of new elections to enable the Branch to function effectively.

113    I accept that, in the present circumstances, including where the BCOM has not heard and determined Ms Macks’ complaint pursuant to rule 54, there is no immediate ability for the rules to provide for elections that would enable the Branch to function effectively.

Conclusion on effective means under the rules

114    I am satisfied that, in the present circumstances, the rules do not provide any effective means to enable the Branch to function effectively. I repeat, from the principles above, that it is not necessary for the Union to establish that it has exhausted the potential operation of each rule that may have some bearing on the effective functioning of the Branch.

115    I accept, as the Union contends, that under the rules of the Union the BCOM, as presently constituted, will continue to govern the Branch. This is not a circumstance that would enable the Branch to function effectively.

THE SUBMISSION OF MS KNIGHT

116    On the first day of the proceeding, Ms Knight, a former member of the Union, sought to be heard on the application. Ms Knight was responding to the advertisement that was placed about this application. Ms Knight’s submission was as follows:

I would just like to say – as a former healthcare worker who worked in environmental services for 30-odd years, and as a member of the union over that period of time – that the union has, or seems to have, forgotten its prime directive of representing the members of the union. To such a point that you can’t – you – to go into disciplinary meetings with people that are making accusations against you – the union who is meant to be there to be helping you represent yourself is going along with such meetings. Right?

…

I don’t think it would take terribly long to say that I think that they’re fairly incompetent and shouldn’t be granted permission to continue in such a manner.

…

And I would suggest that the people whose names have been put down to continue under the administration have been in the union for such a long period of time that they’re also tainted by those people that went before them. I think that the members deserve better representation, and I think that they can get that representation with other unions that are available to do them. I think the 33 people that are attempting to keep their jobs at this point in time can go and find a job with those unions if they’re fit for purpose.

…

But I think it would be a shame if the court was to enable them to continue. Because we’ve been here twice before with this particular union, as I understand it, through Jeff Jackson and Kathy Jackson. I lived through all that. Now, we’re at Diana Asmar. None of that has been beneficial to any of the members, just as an overall thing. But I’m just saying, fundamentally, they actually don’t know how to do their job. Yes. More or less, that’s it. That’s all I needed to say.

117    After making her submission, I invited Ms Knight to remain in Court in the event that she wished to raise anything else during the remainder of the hearing. Ms Knight responded that she had “said what [she] need[ed] to say” and she left the Courtroom. I thank Ms Knight for her submission and have considered it with the matters above.

THE SCHEME

118    Having accepted the conclusion that the Branch is dysfunctional and that there are no effective means under the rules to enable effective function, I now must determine whether to approve the scheme sought. As observed by Flick J in Brown at [98]–[100], the Court has discretion as to whether to approve the scheme, emanating from the fact that under s 323(2), the Court “may, by order, approve a scheme”. The Court must also be satisfied that what is approved is a “scheme”: Brown at [100]. For the reasons that follow, I am satisfied that the proposed scheme constitutes a “scheme”, and that I should exercise my discretion to approve it.

119    The consenting parties say, and I accept, that the scheme proposed substantially aligns with the features of the scheme endorsed by Flick J in Brown. The parties did not bring to my attention any material issues that arose from that scheme.

120    That terms of scheme under consideration relevantly contemplate:

(1)    Declaring all elected offices in the Branch vacant;

(2)    Appointing Mr Charlie Donnelly as Administrator of the Branch;

(3)    Granting the Administrator power to:

(a)    engage employees and consultants as the Administrator deems necessary;

(b)    investigate and rectify financial irregularities, operational and administrative deficiencies in relation to the Branch; and

(c)    establish internal control policies and procedures to ensure the Branch is conducted in accordance with principles of good corporate governance.

(4)    Cause the Administrator to prepare, and provide to the National Secretary:

(a)    financial statements of the Branch;

(b)    a report examining the solvency of the Branch;

(c)    a report examining the financial relationships and dealings between the Branch and goods and services suppliers;

(d)    a report examining the Branch’s compliance with the Union’s policies for expenditure of Branch funds; and

(e)    a report examining the accuracy of the register of members of the Branch.

121    The branch positions to be declared vacant, under (1) above, are the Branch President, Branch Senior Vice President, Branch Junior Vice President, Branch Secretary, Branch Assistant Secretary, Branch Trustees, Ordinary members of Branch Committee, and Branch delegates to National Council.

122    The scheme also obliges the Branch to pay the fees and expenses of the Administrator. In assessing whether to approve the scheme, I accept the submission of the Union that the fees and expenses associated with the Administrator’s appointment would not imperil the finances of the Branch.

123    I note that the terms of the scheme appear adequate to address the ineffective functioning described at [61]-[104]. In particular:

(1)    The administrator is given power over management of the Union, including through engaging employees and consultants as necessary. The administrator may exercise that power in a way to avoid the present divisions within the BCOM.

(2)    Any investigation and rectification of financial irregularities will address the substance of the concerns held by the National Executive in taking some steps to address the claims raised in the 26 March 2024 letter and the allegations in the General Manager’s proceedings.

(3)    The provision of financial statements and reports to the National Secretary will address the information asymmetry described at [74]-[80] between the Branch’s paid officials and the National Secretary relating to the financial position of the Branch and the Branch’s compliance with the Union’s policies for expenditure of Branch funds.

Duration of the administration

124    Under the proposed scheme, the Administrator is to use his best endeavours to ensure the completion of the administration by the time of the next quadrennial election, which will occur during or after July 2026, or another time that the Court so declares. Specifically, the Administrator must complete the administration by the time the election result in the quadrennial election is declared and the elected officers take office pursuant to rule 23A(d)(xxiii)(b).

125    In light of the quadrennial election cycle, this will occur during or after July 2026. I consider that appropriate timing. It is sufficient time to enable the administrator to address the ineffective functioning and a practical time for the administration to end because it will enable elections to immediately follow. As Tracey J observed in Health Service Union at [22], at those elections “the membership of the Branch will have the opportunity to choose those candidates whom they consider will best pursue the interests of the membership”.

The administrator

126    I am satisfied that Mr Donnelly, the proposed administrator under the scheme, is an appropriate person to administer the Branch. Mr Donnelly has for nearly six months served as the interim administrator of the Branch pursuant to a scheme of interim administration ordered by me on 23 December 2024.

127    The affidavit of Mr Donnelly affirmed on 19 December 2024, tendered by the Union at the hearing, demonstrates that Mr Donnelly holds the appropriate qualifications and experience to serve as the Branch’s administrator. Mr Donnelly holds qualifications in commerce and finance, and has extensive work experience in senior positions within branches of unions. Mr Donnelly’s previous experience includes overseeing branches comprising 35,000-135,000 members, and overseeing a significant reform agenda to restructure branches and improve governance and resource allocation.

Conclusions on the scheme

128    Having examined the proposed scheme, I am satisfied that I should exercise my discretion under s 323(2) of the Act to approve the scheme to enable the Branch to function effectively. Like Tracey J found in Re Health Services Union at [22], I give significant weight to the fact that the proposed scheme enjoys endorsement from the consenting parties and four other respondents, being Ms Barclay, Ms Jacks, Ms Hargreaves and Ms Stone. I also give weight to the fact that none of the remaining respondents opposed the proposed scheme.

NO SUBSTANTIAL INJUSTICE

129    Section 323(4) requires that I not make a declaration unless I am satisfied that it would not do substantial injustice to the organisation or any member of the organisation. I am satisfied that the Scheme will not cause such substantial injustice. I hold this view for two key reasons.

130    First, and most significantly, I consider that the Scheme will advance and promote the interests of the Union and its members. I note that members and other interested persons were invited to make submissions and no one directly opposed the Scheme or indicated that any injustice would be occasioned on them if the Scheme were approved. I note further that, as discussed at [8], a number of respondents consented to an order approving the Scheme, and those remaining respondents did not oppose the relief sought by the Union.

131    Second, I find that to the extent that the vacation of the elected offices of the Branch may be considered an injustice (which was not put by any of the parties), that injustice is not substantial for similar reasons as those referred to by Flick J Brown at [138]. While all elected officers of the Branch are also members of the Union, as required by rule 23A(e), s 323(4) is directed to the impacts of the Scheme on the interests of the Union and its members at large. Additionally, nothing in the Scheme precludes any of those Branch offices that are to be vacated from running in subsequent Branch elections.

DISPOSITION

132    In all of those circumstances, and for all of those reasons, I will make a declaration that the branch of the Health Services Union known as the Victorian No.1 Branch has ceased to function effectively and there are no effective means under the rules of the organisation by which it can be enabled to function effectively. I will also make orders providing that:

(1)    Pursuant to section 323(2) of the Fair Work (Registered Organisations) Act 2009 the scheme attached in the Appendix is approved as the scheme for the taking of action by the Health Services Union to enable the Victorian No.1 Branch to function effectively.

(2)    Mr Charlie Donnelly be appointed administrator of the Victorian No.1 Branch under the scheme approved in order 1.

(3)    All offices of the Victorian No.1 Branch of the Health Services Union, identified in the attached Annexure to the Appendix, are vacated.

(4)    In the event of any difficulty arising from the implementation of the scheme, the administrator or the parties shall have liberty to apply on 48 hours written notice.

Associate:

Dated:    25 June 2025

SCHEDULE OF PARTIES

APPENDIX

Scheme of administration

Interpretation

1.     For the purposes of this Scheme, unless the contrary intention appears:

1.1    The Act means the Fair Work (Registered Organisations) Act 2009 (Cth) (the RO Act);

1.2    The Administrator means the person appointed under clause 3 of the Scheme;

1.3    HSU means the Health Services Union, an organisation registered under the RO Act;

1.4    HWU Branch means the Branch of the HSU referred to as ‘Victoria No.1’ by Rule 48(a) of the Rules;

1.5    the HWU Branch Officers are the persons holding the following offices under the Rule 40:

1.5.1     Branch Secretary (per Rule 48)

1.5.2    Branch President (per Rule 46)

1.5.3    Branch Senior Vice President (per Rule 47)

1.5.4     Branch Junior Vice President (per Rule 47)

1.5.5    Branch Assistant Secretary (per Rule 49); and

1.5.6    Two Branch Trustees (per Rule 51)

1.6    The Branch Finance Committee means the persons referred to and appointed under Rule 75(b)(iii).

1.7    The Order means the Order of the Court approving this Scheme under s 323 of the Act;

1.8     The Rules means the Rules of the HSU.

Operation of this Scheme

2.     This Scheme operates and applies to the HWU Branch notwithstanding anything in the Rules.

Appointment of Administrator and Administrator’s powers

3.    By this Order, the Court:

3.1    appoints Charlie Donnelly as the Administrator of the HWU Branch.

3.2    declares the following elected offices vacant:

3.2.1. Branch President

3.2.2. Branch Senior Vice President

3.2.3. Branch Junior Vice President

3.2.4. Branch Secretary

3.2.5. Branch Assistant Secretary

3.2.6. Branch Trustees

3.2.8. Ordinary members of Branch Committee

3.2.9. Branch delegates to National Council

4.     Within seven days of the making of the Order, those persons whose offices are declared vacant pursuant to clause 3.2 shall return to the Administrator all property (including credit cards) of the HSU or the HWU Branch, as the case may be, in their possession.

5.     As and from the making of the Order and for the period of the Order, the Administrator shall have and exercise such powers and duties of the HWU Branch Committee, the HWU Branch Officers and the HWU Branch Finance Committee as are conferred on those bodies by the Rules and the Act.

6.     Without in any way limiting the powers in clause 5 above, the Administrator shall have power to:

6.1     engage such employees and consultants as the Administrator deems necessary to enable the Administrator to carry out the duties and functions conferred on the Administrator under this Scheme; and

6.2     appoint any person deemed suitable to them as a proxy to represent them at any meeting of the National Council or National Executive of the HSU provided that a separate written appointment is made for each such meeting, and each such instrument may provide instructions to the proxy as to how the proxy should vote and must do so in the event of a vote being required on any matter that, in the opinion of the Administrator, may adversely affect the interests of the members of the HWU Branch, and to avoid doubt, any such instructions may include a direction to abstain from voting.

7.     Without in any way limiting the powers in clause 5 and 6 above, the Administrator shall take such steps as they deem necessary in order to:

7.1     investigate and rectify any financial irregularities in relation to the HWU Branch;

7.2     investigate and rectify any operational or administrative defect or deficiency that in the opinion of the Administrator exists in connection with the HWU Branch; and

7.3     establish and implement internal control policies and procedures to ensure the HWU Branch is conducted in accordance with the principles of good corporate governance and to ensure accountability to the members of the HWU Branch.

8.     The Administrator shall, as soon is reasonably practicable after the date of the Order cause to be prepared:

8.1     financial accounts, setting out the assets and liabilities, of the HWU Branch and a profit and loss statement.

8.2     a report examining the solvency of the HWU Branch.

8.3     a report examining the financial relationships and dealings between the HWU Branch and suppliers of goods and services.

8.4     a report examining the Branch’s compliance with the HSU’s policies for the expenditure of Branch funds, including the practices for approving expenditures by Branch officers and members of the Branch Committee.

8.5     a report examining the accuracy of the register of members of the HWU Branch, and whether members have been properly removed from the register in accordance with the Rules and the RO Act.

9.     The Administrator shall:

9.1     provide the abovementioned reports to the National Secretary; and

9.2     provide verbal or written reports at National Executive meetings on the status of the administration and any relevant matters/issues that have arisen during the administration.

10.     Any member of the HSU or the HWU Branch holding real or personal property of the HSU for or on behalf of the HWU Branch, whether as registered proprietor, trustee or otherwise, shall, at the request of the Administrator deliver up or transfer such property to the Administrator.

Duration of administration

11.     The Administrator shall use their best endeavours to ensure the completion of the administration by the day the Returning Officer makes the written declaration referred to in Rule 23A(d)(xxiii)(b) of the Rules, or such further time as the Court may allow.

12.     Upon being satisfied that the HWU Branch is functioning effectively, the Administrator will issue a certificate stating that they are so satisfied. Such certificate will take effect upon it being issued.

13.     With effect from the date of the Administrator issuing a certificate, the Administrator will take the necessary steps to arrange for the conduct of elections for offices in the HWU Branch, provided that the Administrator is satisfied that the timing of the election will not prejudice the ability of the HWU Branch to function effectively during the period between the completion of that election and the completion of the 2026 quadrennial elections under Rule 23A of the Rules. Such elections will be conducted in accordance with the Rules and the RO Act, including in accordance with s 323(7) of the RO Act.

14.     Despite anything to the contrary in the Rules, no election shall be held in respect of offices in the HWU Branch until after the issuing of the certificate or the commencement (subject to the Court allowing further time under clause 11 herein) of the quadrennial elections for the HWU Branch under Rule 23A of the Rules, whichever applies.

15.     Upon the declaration, in accordance with the RO Act and the Rules, of the results of an election for offices of the HWU Branch conducted as set out above, the office holders elected will take office in the HWU Branch and the Administrator shall cease to act under this Scheme.

16.     A person elected to an office in the HWU Branch as a result of an election arranged by the Administrator under clause 13 herein before the quadrennial elections under Rule 23A of the Rules shall hold office for the balance of any term of office until the quadrennial elections of the HWU Branch are commenced in 2026.

Payment of the Administrator

17.     The HWU Branch shall pay the fees and expenses of the Administrator in carrying out their functions under this Scheme.

Indemnification of the Administrator

18.     The HSU shall indemnify the Administrator in respect of any and all claims, proceedings, or complaints made in connection with the Administrator’s exercise or non-exercise of any of the functions, powers and duties under this Scheme, including in relation to the cost of defending such claims, proceedings or complaints, and in relation to the payment of any compensation, penalties or other amounts awarded or paid in the determination, settlement, or other resolution, of such compensation, penalties or other amounts.

19.     The indemnification provided for in clause 18 above will continue after the Administrator ceases to act as Administrator under this Scheme, as long as the relevant exercise or non-exercise of functions, powers and duties occurred at a date when the Administrator still had functions, powers and duties under this Scheme.

ANNEXURE