Federal Court of Australia

Health Services Union v Asmar (Application for Extension of Administration) [2026] FCA 798

ORDERS

THE COURT ORDERS THAT:

1.    The interim relief sought by the applicant at paragraph 3 of the amended interlocutory application dated 9 June 2026 be dismissed.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from transcript)

DOWLING J

introduction

1    On 25 June 2025 the Court declared that the branch of the Health Services Union known as the Victorian No.1 Branch had ceased to function effectively and that there were no effective means under the Union’s rules by which it could be enabled to function effectively: Health Services Union v Asmar (Administration Decision) [2025] FCA 689. Pursuant to s 323(2) of the Fair Work (Registered Organisations) Act 2009 (Cth) the Court approved a scheme of administration which, amongst other things:

(1)    appointed Mr Charlie Donnelly as Administrator of the Branch;

(2)    vacated elected offices;

(3)    provided certain reporting obligations on the Administrator;

(4)    provided for the Administrator to issue a certificate when he was satisfied that the Branch was functioning effectively, after which elections for offices in the Branch were to be held. The scheme was to cease after the declaration of the elected office holders of the Branch. The scheme contemplated that was to happen as the result of elections commencing in June 2026; and

(5)    gave the Administrator and parties liberty to apply on 48 hours’ written notice in the event of any difficulty arising from the implementation of the scheme.

2    The scheme approved was largely in the form then proposed by the Union, and Mr Donnelly was the Administrator put forward by the Union.

3    Mr Donnelly commenced as the Administrator on 25 June 2025. However, he had, as the result of earlier orders made, been the interim administrator since 23 December 2024.

4    The Union now brings an interlocutory application which seeks to amend and extend the scheme. It now seeks interim orders, pending the hearing and determination of that application that:

(1)    the certificate issued by Mr Donnelly on 2 June 2026 that the Union is functioning effectively be treated as null and void and of no effect;

(2)    Mr Donnelly as Administrator under the scheme be enjoined from:

(a)    issuing a certificate under cl 12 of the scheme; and

(b)    taking any steps to arrange for the conduct of elections for offices in the Branch; and

(3)    the 2026 quadrennial elections for the Branch be deferred.

5    Mr Donnelly appeared at the hearing of the interlocutory application and opposes the interim relief sought by the Union. He says he has completed all of the steps in the scheme and that there is no power or reason to extend and amend the scheme. He says that the Branch is now functioning effectively.

6    The amended and extended scheme now proposed (the proposed scheme) by the Union would, amongst other matters:

(1)    operate in place of the scheme approved by the Court on 25 June 2025;

(2)    introduce two new administrators who, in addition to Mr Donnelly, would have authority as part of an Administration Committee;

(3)    designate Mr Donnelly as Executive Administrator, where the Executive Administrator’s exercise of the powers and duties of the Branch are subject to the control and supervision of the Administration Committee; and

(4)    confer certain powers and duties on the Administration Committee.

7    The determination of the interim relief is urgent because nominations for offices in the Branch will be called for from 16 June 2026 to 30 June 2026. The latest the nominations can open is 16 June 2026. Nominations must be called for in a national daily newspaper and on the Union’s and Branch’s website. The Australian Electoral Commission (AEC) is required to place an advertisement in a daily national newspaper on 16 June 2026. If elections for the Branch are deferred, Court orders would be required to permit departure from the Union’s rules. The AEC confirms that it has organised the placement of an advertisement in The Australian newspaper for tomorrow, 16 June 2026. That requires me to determine the interim relief today so that the advertisement can, if necessary, be amended.

8    The following offices are due for election in the Branch: Branch President, Branch Senior Vice President, Branch Secretary, Branch Assistant Secretary, Ordinary Members of Branch Committee (from Victorian Metropolitan Melbourne Regional boundaries) (5), Ordinary Members of Branch Committee (from Victorian Country Regional boundaries) (3), Ordinary Members of Branch Committee (from a Private Hospital), Ordinary Members of Branch Committee (from a Non-Public Sector Aged Care Facility), Ordinary Members of Branch Committee (from a Non-Public Sector Pathology Service) and Branch Delegates to National Council (12).

9    In accordance with timetabling orders and the notice published on the Union’s website and social media accounts, any person who wished to be heard in relation to the orders now sought by the Union was permitted to attend the interlocutory hearing today and make submissions. Five members of the Union spoke: Mr Gregory Latham, Mr Mark Fitzgerald, Mr David Baird, Ms Robyn Mitchell and Ms Colette McNeill. I will return to their submissions below.

10    The Commonwealth respondents, being the General Manager of the Fair Work Commission, Mr Chris King (in his capacity as returning officer of the Australian Electoral Commission), and the Australian Electoral Commission, also appeared at the interlocutory hearing today. The Commonwealth respondents took no position as to whether the administration should be extended, but wished to ensure that the elections are conducted in accordance with the rules of the Union and that to the extent that this might become impossible or impracticable, there are appropriate Court orders in place which provide clarity as to how the elections are to be conducted. I return to these submissions below.

11    No other respondent named in the interlocutory application appeared at the hearing.

12    For the reasons explained below, I refuse the Union’s application for interim orders pending the hearing and determination of its interlocutory application.

Background facts

13    On 23 December 2024, Mr Charlie Donnelly was appointed as interim administrator pursuant to orders made in this proceeding. As interim administrator, Mr Donnelly did not have the ability to dismiss any employees and was required to continue meeting the expenses associated with officers who were not performing any duties but continued to hold office. He was also not permitted to change any resolution previously decided by the Branch committee of management. Mr Donnelly says he promptly took steps to rectify the Branch’s membership register and put in place an ongoing system to accurately record the Branch’s membership, to reduce and control expenditure, and to refocus Branch organisers and industrial officers on serving the interests of members.

14    Mr Donnelly was appointed as the administrator on a final basis pursuant to orders made on 25 June 2025.

15    From 25 June 2025, Mr Donnelly says he attended to the task of completing accurate financial records including the general purpose financial report and operating reports for the 2025 financial year. He engaged new financial advisers and auditors.

16    On 12 August 2025, Mr Donnelly wrote to the National Secretary of the Union seeking to understand what the National Secretary expected of the reports required by cll 8.3 and 8.4 of the scheme. Several weeks later, the National Secretary responded. Mr Donnelly deposes that he then commenced preparing those reports in parallel with his other responsibilities as Administrator.

17    Between August and October 2025, Mr Donnelly worked with the National Secretary of the Union on rule changes to, amongst other things, strengthen financial oversight of the Branch by the Union.

18    On 18 September 2025, Mr Donnelly provided the National Secretary of the Union and the Fair Work Commission with a copy of a report from the Branch’s new auditors, Nexia, concerning the accuracy of the Branch’s membership records.

19    On 18 November 2025, Mr Donnelly sent the National Secretary of the Union a copy of a report he had prepared examining the relationships and dealings between the Branch and suppliers of goods and services in accordance with his obligations under the scheme.

20    On 31 December 2025, Mr Donnelly finalised the general purpose financial report and balance sheet. Those documents were provided to the National Secretary of the Union.

21    In 2026, Mr Donnelly worked to prepare the additional reports required by cll 8.3, 8.4 and 8.5 of the scheme. During that period, he also had responsibility for the management of the Branch including restoring its financial performance.

22    On 19 May 2026, an auditor’s report in respect of a review of the Branch was prepared by Hall Chadwick (the Hall Chadwick report). The National Executive of the Union had engaged Hall Chadwick as auditor on 4 May 2026 due to concerns it had about the progress of the administration and purported difficulties about receiving timely information from the Administrator. The report relevantly found that the Branch is “not yet financially secure and should remain in Administration at least until its balance sheet is returned to a circa $0.5 million positive net asset position”. The report found that while the Branch’s financial position has “materially improved since the appointment of the Administrator”, the Branch appears “not able to pay its debts as and when they fall due”. The report otherwise relevantly recommended:

(1)    balance sheet repair is the immediate priority;

(2)    the extension of the administration “at least until 31 December 2027”;

(3)    management committee support should be established to assist Mr Donnelly; and

(4)    prior to the Branch being returned to members, “as well as a sustained period of operating surpluses and a well-capitalised balance sheet, material improvements to transparency, governance structures, controls and oversight … must be achieved to position the Branch for long-term success”.

23    Mr Donnelly says he has reduced expenditure and indebtedness and grown membership and revenue. As at 31 May 2026, the Branch has recorded a profit of $1,286,115.09. It is estimated that for the financial year ending 30 June 2026, there will be a net profit of $1,354,312.00. Mr Donnelly estimates that as at 31 August 2026, the Branch will have a total equity of $595,166.00. The estimated profit for the 2027 financial year is $1,960,588.00.

24    On 2 June 2026 Mr Donnelly issued the certificate in his capacity as Administrator of the Branch certifying his satisfaction that the Branch is functioning effectively.

25    On 11 June 2026, Mr Donnelly provided further and final reports required by cll 8.3, 8.4 and 8.5 of the scheme.

Legal principles

26    The Court’s power to award interlocutory relief arises under s 23 of the Federal Court of Australia Act 1976 (Cth). I set out the principles relevant to the test for interlocutory relief in Health Services Union v Asmar [2024] FCA 1168 at [14]-[18]. The parties agree they are the relevant principles. They are in summary:

(1)    the Union must demonstrate that there is a serious question to be tried that it is entitled to relief and that the balance of convenience favours the grant of an injunction: Australian Broadcasting Corporation v O’Neill [2006] HCA 46; 227 CLR 57 at [65]-[72] per Gummow and Hayne JJ (with whom Gleeson CJ and Crennan J agreed at [19]);

(2)    the Union must establish that its case has a sufficient likelihood of success to justify the preservation of the status quo pending the trial: O’Neill at [65];

(3)    the issue of whether the Union has made out a serious question and whether the balance of convenience favours the grant of an injunction are related inquiries: Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 at [67] (Dowsett, Foster and Yates JJ), citing, with approval Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2009] FCA 595; 81 IPR 339 at [15] (Sundberg J);

(4)    a strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim may still attract interlocutory relief if there is a marked balance of convenience in favour of it: Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464, 472 (per Woodward J, with whom Smithers and Sweeney JJ agreed); and

(5)    the Court may consider taking whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong: Bradto Pty Ltd v Victoria [2006] VSCA 89; 15 VR 65 at [35] (per Maxwell P and Charles JA).

27    The Administrator additionally referred to Karaguleski v Vasil Bros & Co Pty Ltd [1981] 1 NSWLR 267 where, at 269B, Powell J said that on such applications where “pure questions of law are raised, I am bound to determine them”. Although I note that obligation is subject to circumstances where “time does not permit a proper consideration of questions of law”: OD Transport v Western Australian Government Railways Commission (1986) 13 FCR 270 at 274 (French J).

28    The Union says further, citing Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at [35] (Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ) that the Federal Court has jurisdiction to make interlocutory orders to prevent frustration of its process in the present proceeding, being to prevent the subject matter of the application from being lost prior to determination of the substantive application.

Serious question to be tried

29    The Union’s position is that:

(1)    there is “at least a serious question that this Court has power to make orders preserving or amending the administration”. The Union says the Court may make the orders for its proposed scheme pursuant to first, cll 11 and 14 of the scheme, which provide for the completion of the administration to be subject to “such further time as the Court may allow”, second, the orders made on 25 June 2025 which provide the Administrator and the parties with liberty to apply “in the event of any difficulty arising from the implementation of the scheme”, and third, that the Court can make ancillary or consequential directions pursuant to s 323(3) of the Act; and

(2)    there is no evidence that Hall Chadwick’s recommendations or the concerns otherwise raised in the Hall Chadwick report have been addressed by the Administrator. The substance of the Union’s argument was that the Administrator had failed to take those matters into account, and not just that there is a difference between Hall Chadwick’s recommendations and what the Administrator has certified.

30    The Union also submitted in writing that the Administrator had not provided the reports in accordance with cll 8.3, 8.4, 8.6 and 9 of the scheme, and that this weighed in favour of a serious question to be tried. As discussed above, on 11 June 2026, the Administrator provided further and final reports in purported fulfilment of these clauses. The Union did not press this point at hearing. The Union also said in its written submissions that the Administrator had not confirmed the accuracy of membership records of the Branch with the Commission. Again, I did not understand this argument to be pressed in oral submissions.

31    The Administrator’s position is that there is no serious question to be tried because:

(1)    the amendments and extension sought to the scheme are not permissible because they do not concern questions of difficulty arising from the implementation of the scheme, but constitute a new and different scheme of administration; and

(2)    the Administrator was not required to have regard to the Hall Chadwick report. The Administrator says in any event that he did have regard to that report, and that on his assessment, the Branch will meet the benchmark in total equity set by the report.

32    The Union members to whom I referred above relevantly submitted that the Branch was now functioning effectively. For example, Ms McNeill said “the Union is functioning again and our members are now confident that the [Branch] has the strength and self determination to move forward”.

Is there power to make the orders sought?

33    The Union does not allege that the orders made on 25 June 2025, and containing the scheme, are other than final. Rather it says the relief it seeks is an example of “making more specific provision for its implementation”: Phillips v Walsh (1990) 20 NSWLR 206. As explained, they say that “specific provision” is permitted by:

(1)    clauses 11 and 14 in the scheme; or

(2)    the liberty to apply included in the orders of 25 June 2025; or

(3)    the ability for the Court to make ancillary or consequential orders under s 323 of the Act.

34    Whilst there was a debate between the parties about whether the amendments to the scheme are the type of ancillary or consequential order contemplated by s 323, for the purposes of this interlocutory application only I assume that in the Union’s favour.

35    The debate in respect of cll 11 and 14 of the scheme, the liberty to apply, or s 323 of the Act then really turns on whether the Union’s proposed scheme is properly “amendments” directed at the implementation of the scheme or a new scheme. I am satisfied that it is a new scheme. I rely on the following matters.

36    First, Mr Donnelly deposes that he has complied with all of his obligations under the scheme. There remains nothing left to implement. Save what is said further about Mr Donnelly’s certification that the Union is functioning effectively, I accept that evidence.

37    Second, the proposed scheme provides at cl 2.2 that it shall operate “in place of the former scheme” and at cl 3 that the former scheme “shall cease to be in effect”.

38    Third, the proposed scheme replaces the Administrator with a Committee of Administration. That committee of three is to be the entity that makes the decisions formerly made by Mr Donnelly: see cl 8 and 9. Mr Donnelly’s role under the proposed scheme then becomes the “Executive Administrator”. That is a reduced role that is “subject to the control and supervision” of the Administration Committee: see cl 13. Whilst the Union supported this change as providing additional assistance to Mr Donnelly, it was not clear why that form of “additional assistance” was necessary for the implementation of the scheme as ordered. Mr Donnelly did not seek it.

39    Fourth, the proposed scheme introduces new monthly reporting obligations to the Union’s National Executive: see cl 9.5.

40    Fifth, the proposed scheme repeats the obligation to report on certain matters but adds more specific obligations in respect of some of that reporting: see cll 11.1.1 to 11.1.3.

41    Sixth, the proposed scheme not only extends the scheme to not before 16 November 2026, a date not chosen by reference to any uncompleted steps but changes the consequence of certification of completion, which under the proposed scheme is to be issued by the Administration Committee. Under the existing scheme the Administrator is to arrange for the conduct of Branch elections. Under the proposed scheme it is the Union that will arrange those elections. It was not adequately explained why that was necessary for the implementation of the scheme as ordered.

42    The Union relies upon the decision of Flick J in Brown v Health Services Union (No 2) [2012] FCA 1014. There, his Honour varied a scheme earlier made by him. I do not accept that assists the Union here. The variation to the scheme in that matter was to give the administrator more time to complete a task assigned to him under the original scheme. That is not, in substance, what is sought here.

43    I am satisfied on the evidence before me that the scheme of administration has been complied with by Mr Donnelly. I am satisfied that the scheme proposed by the Union is not the type of amendment contemplated by cll 11 and 14, the liberty to apply or any ancillary or consequential power in s 323 of the Act. I acknowledge the Union’s concern to ensure that the Branch continues to improve. I do not doubt that concern. However, I also note that under the amendments to the Union’s rules it continues to have oversight and that there is the ability to appoint a financial governance advisor under r 93(l) of the Union’s rules.

44    I do not consider that there is a serious question to be tried about the power to amend and extend the scheme in the way contended for by the Union.

Was there a failure to have regard to Auditor’s report?

45    As explained, the next complaint made by the Union is that Mr Donnelly’s certification that the Branch is able to function effectively did not properly consider the Hall Chadwick report.

46    I do not accept that submission. First, the scheme did not require Mr Donnelly to consider such a report. He should not be criticised for failing to take account of a report that the scheme did not oblige him to consider. But in any event, assuming for the purposes of the application for interim relief that he should have considered it, I conclude that he did.

47    Second, Mr Donnelly deposes to having co-operated with Hall Chadwick in the preparation of that report. When it was issued, he disagreed with the conclusions and wrote to the National Secretary of the Union on 21 May 2026 setting out his position. He also attended the National Executive meeting on 21 May 2026 when the report was tabled. On the evidence before me I conclude that Mr Donnelly considered the Hall Chadwick report in the issuing of his certificate on 2 June 2026.

48    Third, and in any event, Mr Donnelly says that on his assessment the Branch will meet the benchmark set by the report, namely total equity in excess of $500,000.

49    I am not satisfied that there is a serious question to be tried that Mr Donnelly failed to consider the Hall Chadwick report in certifying that the Branch was able to function effectively.

Balance of convenience

50    Having found there is no serious question, it is not necessary to consider the balance of convenience. For completeness I add that I consider that balance to be fairly even.

51    The Union’s position is that the balance of convenience favours preserving the administration until the Court determines the Union’s application to amend and extend the scheme. It says that if the interim relief is not granted, the subject matter of the application may be lost and the Court’s capacity to grant effective relief would be compromised. The Union says this is because, if interim relief is not granted, nominations for offices in the Branch will be called for from 16 June 2026. If an office is uncontested, no ballot is required and the election process for that office will substantively conclude on 30 June 2026. This will mean that the result may be declared from 1 July 2026 and the administration may end by force of cl 15 of the scheme. They say additionally that if an office is contested and the election proceeds before the conclusion of the application, there is a potential for considerable resources to be wasted.

52    The Administrator’s position is that the balance of convenience does not favour the making of the orders sought because:

(1)    it would continue to deny members the democratic control of their organisation;

(2)    the interim relief would deny the members of the Branch the ability to participate in elections for their own Branch at the same time as broader elections within the Union; and

(3)    the delay of democratically elected offices will prejudice their ability to prepare for bargaining commencing in 2026 and for 2027.

53    The Union members to whom I have referred submitted that they do not want to be denied democratic control of the Branch:

(1)    Mr Latham said that in his view “the union is now ready to return to democratic control” and that “members deserve the opportunity to determine the future of their Union” through elections;

(2)    Mr Fitzgerald said that members have the democratic “right to vote on who we decide [is] running our Union”;

(3)    Mr Baird urged for elections “as soon as possible” and said that “it’s time for the [Branch] membership to have our Union back”;

(4)    Ms Mitchell said “members have not had [a] proper opportunity for many – more than ten years to vote for their own secretary and committee. There is now genuine excitement about what the Union is doing and where it can go from here”; and

(5)    Ms McNeill said the Branch “has the strength and self determination to move forward” and that members “would like to see the Union return to democratic control and that the Union should now be trusted to decide its own future.”

54    I accept that the Union’s aim is to protect the subject matter of its application and it is possible, but unknown, whether the administration may end before the final determination of that application. It says alternatively it is concerned not to waste resources. I weigh those matters.

55    Against that is the immediate denial of the members’ ability to democratically control the Branch. The Administrator says that is now appropriate. That is a matter of important weight. The five members who made submissions identified that is what they want.

56    The Administrator also submits that conducting the Branch election out of sequence with other Union elections is a balance against the Union. The positions for election are set out at paragraph [8] of these reasons. I accept that the choice a member makes about who will be elected at Branch level may be influenced by, and made in the context of, choices of who will be elected to the National Council Delegate positions. However, I accept as the Union contends, it is difficult to meaningfully weigh and assess that consideration. I do not weigh it heavily.

57    I do weigh the concern expressed by the Administrator that immediate forthcoming negotiations should be made by a democratically elected leadership. The Union points to the success to date of the Administrator and says that will continue should interim orders be made. However, that downplays the role of a democratically elected leadership to control and direct those negotiations, in circumstances where the Administrator and at least the members I heard from urge that course.

58    All of those matters mean that I consider that the balance of convenience is fairly even.

59    As discussed above, the Commonwealth respondents’ submissions were directed at the necessary timing of the Branch and other elections and any deferral of those elections. I am grateful for those submissions, however, where I have refused the interim relief it is not necessary for me to address those requirements and timing considerations.

DISPOSITION

60    For all of those reasons, I order that the interim relief sought by the applicant at paragraph 3 of the amended interlocutory application dated 9 June 2026 be dismissed.

Associate:

Dated:    25 June 2026

SCHEDULE OF PARTIES