Allen v Townsend [1977] FCA 10;

Allen v Townsend [1977] FCA 10; - FCA 1977 case summary — Zoe

[66]

26. But in accordance with the views expressed by Fullagar J. with reference to the powers of the Hobart branch of the Waterside Workers' Federation of Australia in Williams v. Hursey [1959] HCA 51; (1959) 103 CLR 30 it is apparent that within its territorial limits and subject to certain restrictions there is a wide range of activities in which the branch as part of the federation has the power to conduct business and there seems no reason to doubt that that range extends to all lawful activity in the territory of the branch which is reasonably referable to the pursuit of the objects of the association. He said: "But in truth, as had been said, the branch has in law no existence separate from that of the federation. It is merely an aggregate of members which is an integral part or section of the whole federation, having that degree of autonomy which is permitted to it by or under the constitution of the federation. It represents the federation in the port of Hobart. In and for the port of Hobart it is, so to speak, the federation. It is forbidden by rr. 2 and 4 of Pt II of the federal rules to strike or to take any step to 'enforce any wages, hours, or conditions of labour' without prior approval of the governing body of the federation. But, subject to those limitations, and perhaps one or two others, it is set up and organized in the port of Hobart to do in that port whatever the federation may do in any Australian port. Because it has that character and those functions, it seems to me that acts of the branch within its local limits are prima facie acts of the federation itself. The branch is in all respects subject to the control of the governing body of the federation, and that body could no doubt interfere and prohibit the branch from proceeding, or from proceeding further, with any particular course of action, and the federation would not be liable for anything done in breach of such a prohibition: cf. Waterside Workers' Federation v. Burgess & Sons, Ltd. [1916] HCA 2; (1916) 21 CLR 129 . But in the present case there was no such prohibition and no such interference" (1959) 103 CLR, at pp 81-82 . (at p440)

[105]

65. What is involved is alleged misuse of power. In relation to curial investigation of alleged misuse of power by a municipal corporation in resolving to apply certain building restrictions to certain land pursuant to the provisions of the Local Government Act, 1919 (N.S.W.), Wootten J. said in Dunlop v. Woollahra Municipal Council (1975) 2 NSWLR 446, at p 484 : "Both parties agreed that, in scrutinizing the council's actions, I should have regard, not only to the terms of the resolutions passed by council, but to the past history of consideration of the land in question, and to the reports to council by its officers and committees which were before the council when it made its decisions. There was some argument as to whether it was proper for me to have regard to what was said at council meetings, or to matters which might affect the vote of individual councillors or reflect individual states of mind. In the event I admitted, subject to its relevance, any evidence which any party wished to call. None of it has turned out to be critical in the case, but the subsequent argument did not convince me that any of it was inadmissible. It is not hard to imagine situations in which the most cogent evidence could be available of blatant conspiracies to abuse the powers of collegiate bodies, yet that evidence would not be admitted under the rules as they have sometimes been stated". Again, he said: "If, one says, as in Baiada's case (Baiada v. Baulkham Hills Shire Council) (1952) 87 WN (Pt 1) (NSW) 222, at p 228 that 'the corporate mind can only be read in the corporate resolution and action', corporations would be largely immune from judicial control of administrative abuse. Corporations must be held responsible through those who act on their behalf, whether an act is performed by one person or by a number. Doubtless there may be problems of mixed motives as between individuals, as indeed there often are within an individual, but it is better for the courts to grapple with the true facts, however difficult this may be, than to shut out the realities of corporate action by arbitrary rules of evidence" (1975) 2 NSWLR, at p 485 . (at p447)

[106]

66. In relation to a similar investigation dealt with in Werribee Shire Council v. Kerr [1928] HCA 41; (1928) 42 CLR 1, at p 30 the High Court upheld a decision by the primary judge that a decision of the council to make a road through certain private property was invalid, Higgins J. said: "The Council carried a resolution to provide a road between the Kororoit Creek road and the Altone road and to take a strip of the plaintiff's land for that purpose; but the plaintiff objects, alleging that the purpose of the Council was not a street or road, but to enable the Commonwealth Oil Refineries Ltd. ('the Company'), an adjoining owner, to maintain in position and use a pipe-line which the Company had unlawfully laid through the plaintiff's land. If this was the real purpose of the Council, the plaintiff must succeed in her objection . . . For the Council's power to take the strip of land is not general: it is limited to the particular purpose stated in the Act; and if the Council's real purpose is not a road, if its purpose is to get the company out of a difficulty (to which the Council had contributed), the plaintiff is entitled to prevent the interference with her rights of property". It is clear that the court regarded the surrounding circumstances as potent evidence of the real purpose of the council's decision to make the road. As Higgins J. said: "The learned judge of the first instance (Wasley A.J.) considered that the plaintiff had proved her case; and there was certainly evidence on which he could come to that conclusion. The very initiation of the scheme came from the Company, not from the public. According to the Council's minutes of 28th October, 1926: 'Mr. Byrne appeared on behalf of' (the Company) 'regarding a road along which the Company had laid a pipe-line under the impression . . . that it was a public road, and after obtaining permission from the Council. Mr. Byrne stated that the Company had since discovered that the road was private property, and asked the Council to have it reopened as a public highway. He stated that the Company was prepared to recoup the Council any expenditure connected with the opening of the road; to complete the fence on the left-hand side; and to clear the road of all surface boulders to the satisfaction of the engineer, without cost to the Council'. This led up to resolutions, which I need not detail, for a road one chain wide, running to a point on the Williamstown to Altona road. This chain road was part of a former chain-and-a-half road that had been given up, sold by Council some forty years before; and there is no evidence whatever of any change in circumstances that made the road necessary. The pipe-line, however, was within the chain. But such a road would have to pass over a railway embankment, vested in the Victorian Railways Commissioners, and used for a live railway; and no permission had been granted by, or was even sought, from the Commissioners. There was evidence also that the ground over which the proposed 'road' was to pass was low and swampy, and unsuitable for a road; and that the proposed 'road' could not satisfy any public need" (1928) 42 CLR, at p 31 . (at p448)

[120]

80. No attempt has been made to explain how the error arose. Of the persons present at the committee meeting of 19th April at least two had no personal knowledge on the matter. During the course of the meeting, Mr. Slevin, one of the members of the committee asked the branch secretary whether the cheque for $29,186.61 which had been forwarded with the sub-branch balance sheet was anything to do with the $32,000 referred to in the resolution. The secretary said, "Nothing to do with it". How he could have said this is a mystery and it is not explained. If the statement could be challenged or explained there was ample opportunity in these proceedings for that to be done. It was not done. It is clear that at the meeting the federal secretary informed members that the Geelong sub-branch had been breaking the rules for years and something had to be done about it. The sub-branch had to be brought into line. Under cover of such statements members not acquainted with the truth could not but infer that although $29,186.61 had recently been paid it had nothing to do with the $32,309.75 claimed and that that sum was still due and owing and that it was partly in respect of that amount that the sub-branch had to be brought into line. Any member who knew the truth would have known that the claim was quite unfounded. Those members who believed that there was $29,000 odd outstanding from the Geelong sub-branch were misled. The belief was calculated to influence a voter to vote for the resolution. It gave point to the statement that the Geelong sub-branch had to be brought into line. Thus there is a situation in which the meeting proceeded upon a significant error of fact which could not have occurred but for gross inefficiency or conscious misrepresentation. It is the duty of the branch secretary to be aware of the financial position of the branch in relation to the sub-branch. In this case he had had the sub-branch balance sheet with the cheque for $29,186.61 some six weeks earlier. It is so unlikely that he was unaware of the true position that it is a reasonable inference that he was willing to allow the error to persist publicly in the meeting. He could not be unaware of its effect upon Mr. Slevin and others at the meeting who were interested. In these proceedings he was silent on these points. (at p452)

[217]

15. The rules of the federation and in particular the federal rules and the Victorian branch rules each in their current form have been before this Court on two recent occasions namely in Johns v. Allen (1977) 29 FLR 249 and Allen v. Vehicle Builders Employees' Federation of Australia [1977] FCA 8; (1977) 30 FLR 263 . In addition, the federal rules and the Victorian branch rules as they existed prior to recent amendments and therefore not identical with the current rules, were before the Australian Industrial Court in Allen v. MacWhirter (1974) 157 CAR 1046 and Allen v. Jarrad (1974) 160 CAR 1018 . A number of the federal rules and of the Victorian branch rules are set out in full in the reasons for judgment for the first two matters referred to above and it is not proposed to set out the terms of those rules in these reasons for judgment. At this stage, it is sufficient to say that the federal rules recognize branches, each "with full local autonomy subject to" the federal rules (federal r. 39). The branches are the Victorian branch, the New South Wales branch, the Queensland branch and the South Australian branch. Each branch is empowered to form sub-branches (federal rr. 39 (b) and 45). A number of the branches have formed sub-branches and in particular the Victorian branch, subject to what appears hereafter, has formed the Geelong sub-branch and a sub-branch in Hobart. There are some 41,500 members of the federation of whom some 3,500 are members of the Queensland branch, some 9,000 are members of the New South Wales branch, some 11,000 are members of the South Australian branch and some 18,000 are members of the Victorian branch. The structure of the federal rules is such that each member of the federation of necessity must be a member of a branch of the federation, the rules making no provision for membership except through a branch: see federal rules under the heading "Membership", being federal rr. 20-23 inclusive. A member cannot be a member of more than one branch at any one time. The structure of the federal rules and the Victorian branch rules are such that each member of the federation, being a member of the Geelong sub-branch, or for that matter the Hobart sub-branch, of necessity is a member of the Victorian branch and, on the facts that have occurred with respect to the Geelong sub-branch, has the full voting rights conferred on members of the Victorian branch, the right to attend meetings of the Victorian branch and the right to be nominated for and elected to office on the State executive: federal rr. 40 and 45, Victorian branch rr. 5, 6, 11 and 12. It does not follow that every member of the Victorian branch is a member of the Geelong sub-branch and in fact it is only those members of the Victorian branch who are attached to the Geelong sub-branch, who as members of the Geelong sub-branch, have the privileges and obligations conferred or imposed upon sub-branch members of the federation by the rules of the federation. Of the 18,000 members of the Victorian branch, some 4,500 are members of the Geelong sub-branch. It is immediately apparent that the membership of the Geelong sub-branch is greater than the membership of the Queensland branch. The large membership of the Geelong sub-branch in proportion to the total Victorian branch membership and in comparison with membership in other branches, largely explains the frequent reference to legal proceedings involving matters internal to the federation. Until a satisfactory solution to this problem is reached, the federation will continue to find that its resources are being expended on legal proceedings concerning internal conflicts. (at p467)

[224]

21. It is necessary to make a brief reference to some of the rules of the federation. Federal r. 1 constitutes the federal council as the supreme governing body of the federation which shall consist of fourteen persons being two delegates from each of the branches, neither of whom shall be the secretary of the branch, the secretary of each branch, the federal secretary and the assistant federal secretary. Federal r. 2 provides that the functions of the federal council are "to exercise the general control and conduct of the business of the federation, subject to the rules of the federation" and then lists a number of specific powers including the powers (a) "to formulate the policy of the federation in all matters affecting the interests of its members"; (c) "to fix the remuneration (if any) of the officers of the federal council"; (h) to make any necessary approach to the Conciliation and Arbitration Commission in respect of any industrial dispute or award; (j) to delegate to the federal executive such of its powers as concern routine administration; and (k) to delegate to any branch such part of its powers as may be necessary for more conveniently conducting the affairs of the federation. Federal r. 4 provides for the election of delegates to federal council. The elections are held biennially and to be eligible for nomination and election a person must be a financial member of the federation and shall have been a member for not less than two years and financial for not less than one year immediately prior to nomination. Any ballot is limited to the financial members of the branch electing the delegates. Federal r. 5 provides that the officers of the federation shall be the president, the vice-president, two trustees, the federal secretary and the assistant federal secetary. The first four listed officers are elected by and from the members of the federal council. Federal rr. 6, 6A and 7 provide for the election of the federal secretary and the assistant federal secretary respectively and any ballot is taken from all financial members of the federation. Federal r. 9 provides that the federal council shall meet at least once a year, but special meetings may be convened (federal r. 10) or a postal vote may be conducted without the necessity for a meeting (federal r. 11). Federal r. 12 constitutes the executive committee which comprises the officers of the federation and which meets at least once every four months: federal r. 13. Federal r. 15 provides for a ballot by all members of the federation upon any question and the result of the ballot is binding on all members. Federal r. 16 lists the duties of the president and vice-president. Federal rr. 17 and 18 list the duties and powers of the federal secretary and assistant federal secretary and it is sufficient to say that these are very extensive. Although the rules do not expressly so provide, in practice the federal secretary is the advocate of the federation in proceedings before the Conciliation and Arbitration Commission and is the officer charged with instituting and defending such proceedings. Federal r. 31 provides for the federal fund, being the property and funds of the federation at the disposal of the federal council and federal r. 32 provides for branch funds being the property and funds of the federation at the disposal of a branch in accordance with the rules of the branch. Federal r. 40 provides that "the officers of each branch shall consist of a president, vice-president, federal secretary, trustees and such other officers as may be deemed necessary for the conduct of the branch". The reference in this rule to "federal secretary" cannot refer to "the federal secretary" and in practice the rule has been applied as meaning "a branch secretary" although called by different names in different branches. Federal r. 42 empowers a branch to make rules to govern its affairs and federal r. 45 deals with rules to govern sub-branches. Federal rr. 46, 47 and 48 provide procedures for dealing with industrial disputes and reference of matters to industrial tribunals and it is sufficient to say that the executive council is the main body to take control of these matters. (at p469)

[225]

22. The officers in the Victorian branch are specified in Victorian branch r. 3 and comprise a president, two vice-presidents, a general secretary-treasurer, an assistant secretary and organizer, an unspecified number of organizers and three trustees. Victorian branch r. 4 provides that the branch shall be governed by a State executive consisting of the officers, the ex-president and four committeemen and is required to meet each month and where possible to refer to branch meetings for endorsement or otherwise any decisions it makes. Victorian branch r. 5 lists the duties and powers of the branch officers. Victorian branch rr. 6, 7 and 7A provide for the nomination and election of the members to the State executive. Each member, apart from the general secretary-treasurer, the assistant secretary and organizer and the organizers are elected every two years and to be eligible for nomination a member must have been a member of the federation for at least two years and financial for at least one year prior to the date of nomination (the same requirement as persons nominating as delegates to the federal council). The general secretary-treasurer is elected for a term of five years and to be eligible for nomination to that office a member must have had at least three years' continuous membership prior to nomination and have taken an active interest in the work of the branch or a sub-branch for at least two years immediately prior to nomination. The assistant secretary and organizer is elected for a term of four years and each organizer is elected for a term of three years. To be eligible for nomination to any of these offices, a member has to satisfy the same requirements as a candidate for the office of general secretary-treasurer. Any ballot for election to any of the offices is limited to financial members of the Victorian branch. Victorian branch r. 11 provides for general meetings of the branch to be held monthly except in the month of January, ten members to form a quorum. Sub-branches likewise meet monthly, three members to form a quorum. Victorian branch r. 12 provides for special meetings of the branch. Victorian branch r. 19 provides for the funds of the Victorian branch. (at p470)

[230]

27. Victorian branch r. 21 is challenged on the grounds that it is contrary to the provisions of reg. 115 (1) (d) (v) in so far as it provides that a ballot of members of the branch is subject to the consent of the State executive (s. 140 (1) (a) of the Act) and is contrary to the provisions of s. 140 (1) (c) of the Act. Procedures under r. 21 are instituted at a meeting of the branch and are limited to "a measure or measures" to be introduced. It follows that a change from an existing position within a branch is being contemplated and is being introduced. A ballot can be held only when the branch meeting decides that such a measure or measures will substantially affect or will be likely to substantially affect "the welfare of members generally". With a membership of some 18,000 persons, it is impracticable to have a general meeting at which all members are able to attend. Nevertheless, r. 21 purports to give a power of veto to the State executive so as to enable the State executive to prevent such a ballot from being held. Victorian branch r. 21, in so far as it purports to empower the State executive to decide whether such a ballot should be held, does not provide for the control of the committee of management of the Victorian branch by the members of the Victorian branch and to that extent is contrary to the provisions of s. 140 (1) (a) of the Act: see Mackenzie v. Administrative and Clerical Officers' Association, Commonwealth Public Service, per Joske J. (1962) 5 FLR 342, at pp 364-365 . Likewise, the rule is contrary to the provisions of s. 140 (1) (c) of the Act in that it imposes upon members of the federation conditions or restrictions which, having regard to the objects of the Act, are oppressive and unreasonable in that purported rights given to members may be negatived by the State executive. Attention is drawn to the fact that Victorian branch r. 21 does not make any provision for the giving of effect to the result of any ballot held: cf. federal r. 15 (d). (at p472)

[252]

47. Before making findings of fact, it is desirable to make further reference to the rules of the federation. Federal r. 24 makes provision for entrance fees while federal r. 25 provides for annual contributions for members, the amount of which is to be determined by the federal council at its meeting in March in each year. The rules provide that the entrance fees, contributions and other receipts are payable to the branch secretary or, if the member is attached to a sub-branch, to the secretary of the sub-branch, and shall be paid into the bank in the name of the branch: federal rr. 28, 32 (b). Federal r. 31 establishes three main funds to be at the disposal of the federal council. The federal overseas fund is serviced by a proportion of all entrance fees received by branches and branch secretaries are required to pay that proportion to the federal secretary each quarter: federal r. 31 (b). There is no express provision that sub-branch secretaries are to pay any proportion of entrance fees to branch secretaries. The federal overseas fund is to be expended for the purposes specified in federal r. 31 (b). In federal r. 31, the phrase "sustentation fees" means that proportion of contributions which are to be paid by branch secretaries each quarter to the federal office. The amount of the contributions is determined by the federal council (federal r. 25) and at the same meeting federal council determines what proportion of the contributions shall be paid by way of sustentation fees to the federal office: federal r. 31 (c) (i). A sub-branch secretary is required to forward to the branch secretary within fourteen days of the end of each quarter, sustentation fees received by him as part of the contributions: federal r. 31 (c) (ii). Prior to the existing rules coming into force in the year 1976, the equivalent federal rule, then numbered 33, contained no such provision: see Allen v. Jarrad (1974) 160 CAR, at pp 1019-1020 . The sustentation fees are used to service the federal contingent fund (federal r. 31 (d)) and the federal council fund (federal r. 31 (e)) each to be expended for the purposes therein specified. Federal r. 32 provides for branch funds and this rule seems to assume that moneys received by sub-branches remain in the name of the branch (federal r. 32 (b)) and be subject to the eventual control "in accordance with the rules of the branch" by the branch: federal r. 32 (a). Federal r. 36 imposes special restrictions on the expenditure of branch funds in excess of $200 except for ordinary expenses. Federal r. 41 provides for the exchange of minutes between a branch and its sub-branches. (at p477)

[264]

55. On 18th April, 1977, a meeting was held between Mr. Townsend and the paid officers of the Victorian branch. At this meeting Mr. Townsend said that there were moves by the Geelong sub-branch against federal officers. He reminded those present of the tensions and conflicts which had existed and still existed between the Victorian branch and the Geelong sub-branch and suggested it was time they were brought to an end. He hinted that it was better for the paid officers to side with the Victorian branch since the Victorian branch elected those paid officers. Immediately prior to the special meeting of the State executive on 19th April, there was a private meeting of members except those members who were known to be favourably disposed to the Geelong sub-branch. The notice calling the special meeting gave no indication of the matters to be considered at that meeting. Mr. Townsend was present, purporting to rely upon federal r. 17 (n), and moved the resolution. He was at his "persuasive best" and was the dominating presence. He insisted that the resolution be passed unanimously and without amendment. He told the meeting that he had discussed the resolution with the federal president who was in agreement with it and with the action to be taken. In fact, the federal president had no knowledge of the resolution or of the proposed action. No evidence was given as to any research undertaken and directed to the legal existence of the Geelong sub-branch, yet the matters contained in par. 1 of the resolution could and did affect the whole of the resolution. In accordance with past practice, the Geelong sub-branch, on 3rd March, 1977, had forwarded to Mr. Jarrad the audited balance sheet as at 31st December, 1976, together with a cheque in the sum of $29,166.61, being the amount properly payable pursuant to federal r. 45 (d). In addition to the $200 retained, certain other sums were retained being the special funds referred to above. At the meeting, in answer to a question of whether that sum of $29,166.61 had been paid, Mr. Jarrad said that the $32,509.75 referred to in par. 2 of the resolution was completely separate and had nothing to do with the $29,166.61 received by him. With the possible exception of the last two quarters of the year 1976, there was no requirement that the Geelong sub-branch should pay sustentation fees to Mr. Jarrad. In fact all funds properly payable by the Geelong sub-branch had in fact been paid on 3rd March, 1977, and the amount so paid was greatly in excess of the amount of any sustentation fee for the last two quarters of the year 1976. Mr. Allen had not been informed of the rate of the sustentation fee determined by the federal council at its meeting in March 1977: federal r. 31 (c). It was only during the course of the hearing of the matter Johns v. Allen (1977) 29 FLR 249 , that he discovered the rate had not been changed whereupon he forwarded, on 26th April, 1977, the sustentation fee for the quarter ending 30th March, 1977: par. 2 (b) and (c) of the resolution. (at p481)

[274]

65. We turn now to a consideration of whether the resolution of the State executive made on 19th April, 1977, was made bona fide for the purposes of the powers conferred upon the State executive by the rules of the federation. There is no doubt that under the rules of the federation, the State executive has wide powers over the Geelong sub-branch, or rather, to be exact, over that group of members of the federation who, being members of the Victorian branch, are attached to the Geelong sub-branch. All moneys received by the Geelong sub-branch must be banked in an account in the name of the Victorian branch and form part of the branch funds to be managed and controlled in accordance with the rules of the Victorian branch: federal r. 32. The Geelong sub-branch makes no direct payment into the federal fund, it is the Victorian branch which is directed to make those payments: federal r. 31. Victorian branch r. 19 provides that the funds of the Geelong sub-branch shall be the common property of the Victorian branch. Victorian branch r. 4 provides that the Victorian branch shall be governed by the State executive but that where possible decisions of the State executive shall be referred to the branch meeting for endorsement or otherwise. Federal r. 45 is to be considered in this context. Consistent with the provisions of the rules of the federation, the members of a branch who are attached to the sub-branch "shall at all times be under the control of and take instructions from the branch": federal r. 45 (a). In the Victorian branch, initially it is the State executive which has the power to control and give instructions to the Geelong sub-branch. The books and records of the Geelong sub-branch are supplied by and remain the property of the Victorian branch: federal r. 45 (b). Subject to retaining specified amounts, the Geelong sub-branch is required each half-year to forward to the Victorian branch all funds together with audited returns: federal r. 45 (d) and (e). These provisions are consistent with those funds being Victorian branch funds. Federal r. 45 (i) confers specific powers on the State executive relating to the Geelong sub-branch. (at p483)

[276]

67. There are many similarities between organizations and legal persons incorporated under the Companies Acts. Each is a creature of statute. Their essential similarity is that each has a legal personality separate and distinct from its members. Each has an independent existence as a legal person. Each is given a personality which is distinct from that of all or any of its members and which continues to subsist unchanged notwithstanding the changes which are bound to occur from time to time in its membership. Each has perpetual succession. Each maintains its identity and its personality notwithstanding changes in its membership, which may occur from day to day. The property of each does not belong to its members from time to time. Compare Williams v. Hursey, per Fullagar J. [1959] HCA 51; (1959) 103 CLR 30, at pp 52-54 . Each must act at the direction of individuals who manage its activities. The powers of these individuals depend upon the rules which regulate the affairs of the incorporated body. The rules may be included in the memorandum and articles of association of companies incorporated under the Companies Acts or in the rules of organizations made pursuant to the Act. The rules include not only the objects to be pursued by the incorporated body but also the powers by which those objects are to be pursued. The rules also contain provisions regulating the affairs of the members as between themselves. Normally the rules provide for a small group of natural persons to be the appropriate group to manage the affairs of the incorporated body subject to eventual control by all the members. Though in theory the ultimate control is conferred upon and retained by the members of the incorporated body, in practice, the group managing the affairs of the incorporated body has a very substantial control over the affairs of that body, the affairs of its members, and the privileges and obligations affecting different groups of members within that body. Within organizations, the committees of management constitute the managing group. The duty imposed upon directors of a company incorporated under the Companies Acts and the duty imposed upon members of a committee of management are but aspects of the application of a wider principle of law applicable where persons have a discretion in the exercise of powers. This wider principle is stated in Shrimpton v. Commonwealth [1945] HCA 4; (1945) 69 CLR 613 when, in discussing the Commonwealth treasurer's power "in his absolute discretion" to grant or refuse consent or to consent subject to such conditions "as he thinks fit", Latham C.J. said: "The discretion which the Treasurer is entitled to exercise, though described as absolute, is, in my opinion, not arbitrary and unlimited; it must be exercised bona fide and for the purposes of the Regulations . . . it has been held in this Court, in a series of cases, that a discretion, or a power to grant a licence, though conferred in very general terms, does not entitle the authority to which the discretion is granted, or upon which the power is conferred, to take into account what has been described as extraneous conditions. The discretion must be used and the power exercised bona fide and with a view of achieving ends or objects not outside the purpose for which the discretion or power is conferred . . . The Regulations do not make the Treasurer 'an autocrat free to act as he pleases'" (1945) 69 CLR, at pp 619-620 . (at p485)

[285]

76. Applying these principles to the facts of the case before the court, it is our opinion that the resolution passed by the State executive on 19th April, 1977, was not passed bona fide for the purposes of managing the Victorian branch nor for any of the purposes enumerated in federal r. 45. We rely upon a number of factors. The resolution was passed as one motion consisting of a series of numbered paragraphs. The basis for the resolution appears to be the suggestion that after forty years' activity, the Geelong sub-branch had not been properly constituted. It followed that the group of members of the Victorian branch of the federation attached to the Geelong sub-branch were not validly so attached and this suggestion called for some explanation but none was given. In addition, a number of substantial facts set out in par. 2 of the resolution were completely false and were false to the knowledge of Mr. Jarrad, yet again no explanation was tendered to explain how such a mistake was made. The presence of Mr. Townsend at his "persuasive best" so shortly after a suggestion that members of the Geelong sub-branch might challenge his election to the office of federal secretary, may explain the resolution which, on its face, appears to be directed to destroying the Geelong sub-branch or at the very least, to require it to be reconstituted in such a way as to render it ineffective. Further, the mis-statements by Mr. Townsend concerning his conversations which the federal president must have had an effect on other members of the State executive in their support for the resolution. The first two paragraphs are factually wrong and are not a valid exercise of any power. The remainder of the paragraphs of the resolution are consequential upon the first two paragraphs and, in any event during the period referred to, the Geelong sub-branch had been complying with the rules of the federation. In our opinion, the members of the State executive did not exercise the powers conferred upon them for the bona fide management of the Victorian branch nor for any of the purposes set out in federal r. 45. It follows that the resolution is thereby rendered void and of no effect. (at p488)

At a glance

Court

Decision date

Source

Judgment (288 paragraphs)

Allen v Townsend [1977] FCA 10; (1977) 31 FLR 431 (28 August 1977)

Parties

Legislation Cited (4)

Cases Cited (22)