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[2008] AIRC 11
General information, not legal advice.
Australian Industrial Relations Commission
2008-02-08
Original judgment source is linked above.
s.158(1) RAO Schedule - Application for alteration of eligibility rules
Application/Notification by Australian Petroleum Agents and Distributors Association
s.158(1) RAO Schedule - Application for change of name of organisation
Application/Notification by Australian Petroleum Agents and Distributors Association
Applications to alter eligibility and industry rules and to change the name of the organisation - proposal to extend membership to convenience retailing - identification of class for comparative purposes - whether rules ambiguous - implication of terms.
[1] Australian Petroleum Agents and Distributors Association (APADA) is a registered organisation of employers. It was registered on 15 September 1982. On 6 October 2006, APADA lodged in the Australian Industrial Registry an application for consent to change the name of the organisation and an application for consent to an alteration of its eligibility and industry rules. Notice of each application was posted on APADA's website and given in the Commonwealth of Australia Gazette, No. GN43 on 1 November 2006 (Gazette).
[2] The application to change the name of the organisation proposes that the existing name be substituted with the following name:
Australasian Convenience and Petroleum Marketers Association
[3] In its application for consent to the alteration to the eligibility and industry rules the following changes are proposed:
1. That Rules 5(a), 5(b) and 5(c) be amended as explained below:
5(a) The Association is formed in or in connection with the petroleum distribution and marketing industry.
Delete the words "petroleum distribution and marketing industry" and replace with the words "petroleum distribution, marketing and convenience retailing industry."
5(b) For the purpose of this clause the petroleum distribution and marketing industry covers the transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto.
Delete the words "petroleum distribution and marketing industry" and replace with the words "petroleum distribution, marketing and convenience retailing industry."
Insert the following words after the word "thereto" "including products and services associated with convenience retailing."
5(c) Notwithstanding any other provisions of this Constitution the Association shall not be entitled or eligible to act on behalf of or to represent a member or any person, firm, company, corporation or association eligible for membership of the Association in the Australian Conciliation and Arbitration Commission or before any other industrial tribunal in respect of any industrial dispute (including a threatened impending or probable dispute) or any industrial matter other than in relation to the industry as described in paragraphs (a) and (b) of this clause.
Delete the words "Australian Conciliation and Arbitration Commission" and replace with the words "Australian Industrial Relations Commission."
2. That Rules 6(a) and 6(b) be amended as explained below:
6(a) Subject to the provisions of Clauses 10 and 12 of this Constitution membership of the Association shall be open to any person, firm, company, corporation or association engaged as an employer in the petroleum distribution and marketing industry, which shall include any person, firm, company, corporation or association working on its own account, but membership of the Association shall not be open to the major oil companies.
Delete the words "petroleum distribution and marketing industry" and replace with the words "petroleum distribution, marketing and convenience retailing industry".
Delete the words ",but membership of the Association shall not be open to the major oil companies".
"Petroleum distribution and marketing" means the transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto.
"Petroleum Product" means any derivative of petroleum or substitute therefor either including or of like nature to motor spirit (petrol), aviation fuel, heating oil, kerosene, lubricating oils and greases, diesel fuel and liquefied petroleum gases.
Delete list of oil companies - lines one to eighteen. As a result of this deletion, Rule 6(b) will commence with the words "Petroleum distribution …"
Delete the words "Petroleum distribution and marketing" from the second paragraph and replace with the words "Petroleum distribution, marketing and convenience retailing".
After the word "thereto" in the second paragraph insert the words "including products and services associated with convenience retailing."
[4] The reasons for the alteration of the eligibility and industry rules, as stated in the application and published in the Gazette, are as follows:
The reason for the proposed alteration is that the nature of the industry in respect of which the organisation is registered has significantly changed. Since the time of the Applicant's registration under the Act in 1982 (at which time the Applicant acceded to the demands of various motor trade associations to restrict its role in the petroleum industry to that of wholesale marketing and distribution) the business operations of the Applicant's members have changed significantly.
In recent years it became increasingly evident to the organisation that the role of the traditional fuel distributor had changed dramatically, with the realigning of petroleum and ancillary products, including convenience retailing, resulting in a composite mix of business operations.
The alteration to the organisation's membership Rules, and the expansion of those Rules to cover retail activities associated with the sale of bulk petroleum and related products, occurred pursuant to an Application to the Commission made on 23 December 2004. That Application received the consent of the Commission on 26 April 2005 [PR957238].
Membership of the Applicant is currently open to any employer in the petroleum distribution and marketing industry, excluding some specified "major oil companies". The proposed amendment to the eligibility Rules remove that limitation on oil company members. Such companies are suppliers to convenience store retailers, and are currently "supplier members" of the Australasian Association of Convenience Stores.
Although historically it was not the case, many of the Applicant's members are now involved in the retailing of petroleum products and with convenience retailing in addition to their traditional activities.
The move away from the traditional distributor operations of marketing, distribution and sale of petroleum in bulk and toward such other ancillary activities as retailing, has seen the organisation's members become more deeply involved in the convenience retailing area of the industry.
Convenience retailing is characterized by a 24/7 operation, and in the majority of cases are aligned to and co-located with petroleum retail operations.
In around January 2006, the organisation established a sub-committee which was charged with reviewing the changing nature and role of the industry, in both wholesale and retail areas. The sub-committee's report was received in May 2006. That report is attached to the statutory declaration of Robert Perry, made in support of this Application.
In summary, the report identified benefits in an expanded organisation which would include members of the Australasian Association of Convenience Stores transferring from that organisation (which would then cease to exist). The report:
(a) identified an enormous amount of common ground and complementary member services, and could see benefits in the variety of services being offered and felt there was scope for future growth for both the organisation's existing members, and for convenience retailers;
(b) determined that it is now timely to look to strengthening the organisation's position by having a cohesive lobbying voice and appropriate value added resources. The role of an expanded organisation would not be restricted to industry lobbying of governments and regulatory authorities and liaising with other major industry players, but would also include supporting and representing the interests of members in the workplace relations environment and the issues that impact on their workplaces; and
(c) identified that the pooling of resources would broaden the scope of services that can be offered to members and that can only be of benefit moving into the future.
The Applicant believes that the proposed changes are appropriate as they would enable the organisation to properly represent its members in the context of their current businesses.
[5] Three registered organisations of employers and one employer association lodged objections in relation to APADA's name change application. The registered organisations are:
The Motor Trade Association of South Australia (MTA-SA) and
Motor Traders' Association of New South Wales (MTA-NSW).
[6] The employer association objector in relation to the proposed name change is the Motor Trades Association of Queensland (MTA-Qld). It is however a Transitionally Registered Association and, as such, has the same standing under the WR Act as a registered organisation.
[7] The same employer association and the same three registered organisations along with the employer association Motor Trade Association of WA (MTA-WA) lodged objections in respect of the proposed alteration to the eligibility rules. I shall refer to the motor trades associations collectively as the motor trades associations.
[8] Although each of the VACC and the motor trades associations lodged separate notices of objections the grounds of objection of each in respect of the proposed alteration to the eligibility rule, which are seven in number, are for all intents and purposes identical. Each contends that in respect of each objector:
[9] Each objector also pleaded such further or other grounds of objection which are permitted by the Act and which the designated Presidential Member hearing the application may permit. No such further or other grounds were identified in the course of the proceeding.
[10] Throughout these reasons for decision I will refer collectively to the several entities opposing the applications as the objectors. References to VACC submissions wherever occurring should be taken to include references to submissions of the objectors unless otherwise indicated.
[11] The grounds of objection to the name change application are 10 in number and the same in substance for each of the objectors. It is unnecessary for me to set those grounds out in full. Suffice to say each boasts substantial membership and service in the field of service stations and convenience stores contending that the conjunction of convenience and petroleum marketing in the proposed name for APADA will cause confusion for businesses that operate in the retail petroleum industry. It is further contended that the name change contravenes the spirit of an agreement or understanding regarding APADA's representational rights, will give rise to disharmony and disruption in the retail motor trade industry and is contrary to the objects of the WR Act and the public interest.
[12] A directions hearing was held on 24 January 2007. The parties were directed to file and serve responsively witness statements and submissions for and against the applications. The matter was listed for hearing over five days from 30 April to 4 May 2007. The hearing was not completed in the time allocated and a further three days were necessary to complete the hearing. The hearing concluded on 29 June 2007.
[13] In the morning on the third day of the hearing a letter dated 2 May 2007 was received in my chambers from the Australian Retailers Association (ARA). The letter referred to APADA's application and indicated that it sought to lodge a late objection as a result of matters that have become apparent in the hearing. The letter goes on to seek an indication from me as to whether I would be inclined to accept a late objection from ARA. The parties were invited to make submissions in respect of the ARA request and, upon hearing the parties in that regard, I arranged for notice to be sent to the ARA inviting it to attend the hearing and make such submission as it might be advised on the issue of leave to lodge a late objection. The ARA did not pursue the matter further.
[14] There were 14 witnesses called to give evidence in the proceedings. APADA called the following witnesses:
Margaret Taylor, Workplace Relations Adviser, APADA;
David Killeen, Executive Director, Australasian Association of Convenience Stores;
Graeme Gough, Managing Director, Northern Marketing Management Pty Ltd; and
Kevin Clarke, Managing Director, Dermody Petroleum Pty Ltd.
[15] The objectors called the following witnesses:
Kevin Redfern, General Manager for Industrial Relations and Training, VACC;
Greg Hatton, Deputy Chief Executive Officer, Policy and Employment Relations, MTA-NSW;
Ron Bowden, Chief Executive Officer, Service Station Association Ltd;
Richard Halstead, President, Service Station Association Ltd;
Tadeusz Kowalski, Industrial Relations Manager, MTA-Qld;
[16] Section 158 of Schedule 1 to the WR Act relevantly provides as follows:
158 Change of name or alteration of eligibility rules of organisation
(1) A change in the name of an organisation, or an alteration of the eligibility rules of an organisation, does not take effect unless the Commission consents to the change or alteration.
(2) The Commission may consent to a change or alteration in whole or part, but must not consent unless the Commission is satisfied that the change or alteration has been made under the rules of the organisation.
(3) The Commission must not consent to a change in the name of an organisation unless the Commission is satisfied that the proposed new name of the organisation:
(a) is not the same as the name of another organisation; and
(b) is not so similar to the name of another organisation as to be likely to cause confusion.
(4) The Commission must not consent to an alteration of the eligibility rules of an organisation if, in relation to persons who would be eligible for membership because of the alteration, there is, in the opinion of the Commission, another organisation:
(a) to which those persons could more conveniently belong; and
(b) that would more effectively represent those members.
(5) However, subsection (4) does not apply if the Commission accepts an undertaking from the organisation seeking the alteration that the Commission considers appropriate to avoid demarcation disputes that might otherwise arise from an overlap between the eligibility rules of that organisation and the eligibility rules of the other organisation.
(6) The Commission may refuse to consent to an alteration of the eligibility rules of an organisation if satisfied that the alteration would contravene an agreement or understanding to which the organisation is a party and that deals with the organisation's right to represent under this Schedule and the Workplace Relations Act the industrial interests of a particular class or group of persons.
(7) The Commission may also refuse to consent to an alteration of the eligibility rules of an organisation if it:
(a) is satisfied that the alteration would change the effect of any order made by the Commission under section 133 about the right of the organisation to represent under this Schedule and the Workplace Relations Act the industrial interests of a particular class or group of employees; and
(b) considers that such a change would give rise to a serious risk of a demarcation dispute which would prevent, obstruct or restrict the performance of work in an industry, or harm the business of an employer.
(8) Subsections (6) and (7) do not limit the grounds on which the Commission may refuse to consent to an alteration of the eligibility rules of an organisation.
(9) Where the Commission consents, under subsection (1), to a change or alteration, the change or alteration takes effect on:
(a) where a date is specified in the consent - that date; or
[17] The Commission may consent to a change in name and/or alterations to eligibility rules and it may do so in whole or in part.
[18] Sections 158(2) and (3) of the WR Act stipulate that a name change for an organisation must meet two requirements in order to invoke the Commission's discretion to consent to the change. The first condition is that the change was made in accordance with the rules of the organisation. The second is the requirement that the proposed name not be the same as, or so similar to the name of another organisation, as to cause confusion. Beyond that the Commission has a broad discretion in granting or withholding its consent to a change in the name of an organisation.
[19] The Commission must refuse consent to an alteration to an eligibility rule if it forms the opinion that there is another organisation to which those persons who would be eligible for membership of the applicant organisation could more conveniently belong because of the alteration, or if that other organisation would more effectively represent those members. The alteration also must have been made in accordance with the rules of the organisation. Absent those requirements the Commission's discretion to refuse consent is conditioned only by its satisfaction as to the preservation of the integrity of existing agreements and/or demarcation orders affecting the scope or operation of the rules of the applicant organisation.
[20] The issues of conveniently belong and effective representation are commonly referred to as the no other organisation test in these types of proceedings. Resolution of that test requires the identification of the relevant class of employers that would be eligible for membership of the organisation because of the alteration.
[21] The no other organisation test involves construction of both the existing eligibility rule and the proposed alteration on the assumption that the alteration formed part of the existing rules. As eligibility rules define the scope of the organisation's coverage it is important that the class is identified with some degree of specificity. If the class is incapable of identification with some degree of specificity then the application must be refused. [1] I will come to those matters in due course. For now I propose to set out some of the background facts in order to assist in an understanding of the central issues raised in this matter.
[22] MTA-NSW was registered as an organisation in 1935, VACC in 1940 and MTA-SA in 1960, albeit under a different name. Eligibility for membership of the VACC is defined by rules 4 and 5 of the VACC rules, which provide as follows:
4. Membership shall be open to any person, firm, corporation, or association, genuinely engaged as principals in the motor business or allied trades or businesses, and such membership shall continue until expiry of six months after such person, firm, corporation, or association, shall have ceased to be engaged in the motor business or allied trades or businesses.
5. Notwithstanding anything contained in Rule 4 hereof no person, firm, corporation or association genuinely engaged as principals in the motor business or allied trades or businesses shall be eligible for membership in the Association if he, she or it is a member of any other retail motor garage and/or service station organisation or retail motor garage and/or service station association in Victoria having objects the same as or similar to those of the Association.
[23] Eligibility for membership of MTA-NSW is defined by its industry and eligibility rules, viz rules 4 and 7. Those rules relevantly provide as follows:
The industry in connection with which the Association is formed is the motor trade or business or any allied or associated trade or business which, without limiting the generality of the foregoing, shall include every operation, business, undertaking, work, service, handicraft, employment or occupation wholly or partly concerned or carried on or connected with or incidental to importing, manufacturing, assembling, altering, distributing, selling, leasing, letting, hiring, financing, repairing, reconditioning, maintaining, servicing, towing, wrecking, dismantling, garaging and/or parking or otherwise dealing with vehicles of all kinds, tractors, agricultural machinery, caravans, trailers, boat-trailer combinations and the like and engines, transmissions, equipment, parts and components thereof and accessories therefor and the provisioning thereof and the supply of operating and running requirements therefor.
Membership of the Association shall be open to any person, firm, partnership, company, corporation or unincorporated body, engaged in the industry referred to in Clause 4(1) of this Constitution and these Rules within the Commonwealth of Australia and its Territories or employing any worker in such industry.
[24] Rule 3 of the MTA-Qld rules sets out its eligibility for membership in the following terms:
The Association shall consist of an unlimited number of individuals, firms, partnerships, corporations and unincorporated bodies, who or which are eligible as defined below, and who have been admitted to membership in accordance with these Rules.
"Eligible person" means all persons who fulfil the following conditions of eligibility for membership of the Association.
(b) Must be engaged or usually engaged as an employer within Queensland (whether wholly in Queensland or partly in Queensland and partly elsewhere) in a calling that is a registered calling of the Association or an officer or principal (not an employee) of a firm or corporation so engaged; and
Of the 17 registered callings only two are of any relevance to this proceeding, namely:
[25] Membership of MTA-SA is defined by rule 3 of its rules, which provides as follows:
The Association shall consist firstly of those persons firms companies corporations and associations genuinely, either as employers or otherwise, engaged in the retail motor industry or any allied trade or business and who shall become ordinary members in the manner hereinafter provided and secondly of those persons firms companies corporations and associations who or which are both engaged in any industry which has dealings of whatsoever nature with the retail motor industry or any allied trade or business and who or which desire regular communication with the association and who shall become associate members in the manner hereinafter provided.
Provided that notwithstanding anything contained herein persons employed, or engaged otherwise than as employees or employers, in or in connexion with the transport of persons and/or passengers, and/or goods, wares, merchandise or any material whatsoever shall not be eligible for ordinary or associate membership.
[26] I pause to note that MTA-WA is a State association and is neither a registered organisation nor transitionally registered. I do not find it necessary to set out its constitutional rules as its constitutional capacity is irrelevant to the issues I must decide. That is not to say that the evidence that has been led in respect of the association is irrelevant.
[27] As indicated earlier in these reasons APADA was registered in 1982. When APADA applied for its registration in 1980 there were a number of objectors, including VACC, South Australian Automobile Chamber of Commerce (SAACC), MTA-NSW, Queensland Motor Industry Association (QMIA), West Australian Automobile Chamber of Commerce (WAACC) and Tasmanian Automobile Chamber of Commerce (TACC). At the time of its application APADA's eligibility rule included the list of oil companies and the definition of petroleum distribution as the list and the definition now appear in rule 6(b). In the course of the proceedings relating to APADA's application for registration, agreement was reached between APADA on the one hand and VACC, SAACC, MTA-NSW, QMIA and WAACC on the other for an undertaking to be read into transcript to remove any doubt about the intended meaning of the words sale in bulk as those words appear in the definition of petroleum distribution in rule 6(b).
[28] Following is the agreed form of words in settlement of the objections that were recorded in transcript on 24 November 1980:
Difficulty was encountered in negotiations in respect of the words "sale in bulk" in the definition of "petroleum distribution and marketing". The retail motor industry organizations pointed out that it is common usage for lubricating oil dispensed from a bulk container into bottles for topping up customers cars to be referred to as "bulk oil". Furthermore, there are occasions when drums are filled from a service station pump or oil and kerosene are sold in four gallon drums. These could be construed as bulk sales. APADA on the other hand, objected to the distinction between wholesale and retail, these terms having largely lost their dictionary meanings in this industry because of industry practices and recent legislation.
It was agreed to place on record in transcript that the intention of the parties is that the definition is meant to describe the operation where transportation, storage and sale in bulk are all an essential part of the business carried on at and from a petroleum site and where the product is delivered to the customers on his premises, viz a farm industrial, user or service station, as distinct from a site typically a service station, to which the customer brings his vehicles for the product to be pumped or poured into tank, engine, etcetera, and/or to pick up packaged products.
[29] In 1985 APADA applied to alter its eligibility rule inserting immediately after the words the petroleum distribution and marketing industry in rule 5(a) the following:
", which shall include any person, firm, company, corporation or association working on its own account,"
VACC, MTA-NSW and SAACC objected to the rule alteration. Subsequently APADA agreed to amend its application in consideration of VACC, MTA-NSW and SAACC withdrawing their objections. The agreed amendment involved an alteration to the definition of "Petroleum distribution and marketing" by adding immediately after the word thereto the following words:
… but shall not include businesses operating within the industry usually carried out in motor garages or establishments or motor service stations concerned with the retailing of petroleum products.
APADA applied again on 23 December 2004 for consent to alter its eligibility rule by removing the words that had been inserted in satisfaction of the VACC, MTA-NSW and SAACC objections in 1985. Notice of the application was published in the Commonwealth of Australia Gazette on 12 January 2005. There was no objection to the alteration and the Commission consented to it on 31 March 2005, with effect 21 March 2005.
[30] In 2006 executives of APADA and Australasian Association of Convenience Stores (AACS) held discussions about their respective futures, the services they provided and whether the two associations should merge. As a result of those discussions it was felt that there was a common interest among their members and that merging was in the interests of both APADA and AACS.
[31] According to Mr Killeen AACS was formed as an incorporated association [2] under the laws of New South Wales in 1990. It was formed by convenience retailers to provide national representation for convenience retailers. AACS has two categories of membership, namely supplier members and retail members. Suppliers are those businesses which supply products and services to the convenience stores and may be admitted to associate membership. Retail members are either large enterprises operating more than 100 convenience retail sites or enterprises operating less than 100 convenience retail outlets.
[32] Submissions were made jointly on behalf of VACC and the relevant motor trades associations in each of the APADA applications for consent to the change of name and alteration to the eligibility rules. In recording the submissions, and in dealing with them in due course, I will refer to them as the VACC submissions.
[33] VACC put the case for refusing consent to the proposed eligibility rule change on four bases. First it was contended that the proposed change is vague and ambiguous. Secondly, VACC contended that any identifiable class of employers, who would be eligible for membership of APADA by reason of the change, would more conveniently belong to VACC and the motor trades associations and that VACC and the motor trades associations would more effectively represent their interests. Thirdly, as between the members who would be eligible for membership, VACC submitted that there is no community of interest. Finally, turning to matters of discretion, VACC submitted that the rule change:
[34] VACC submitted that the issues of more conveniently belong and more effective representation are commonly referred to as the no other organisation test. The test is a single test with two limbs and requires a comparative analysis of the respective capacities of the organisations to represent the interests of the employers concerned. If some only of the relevant class of employers can conveniently belong to another organisation which can more effectively represent them, VACC submitted that consent must be refused.
[35] VACC further submitted that, in applying the no other organisation test, it must be possible to identify the relevant class of employers who would be eligible for membership with some specificity. In the absence of a high degree of specificity the proposed rule may be so ambiguous, vague and imprecise that it would be contrary to public interest to give consent. The proposed APADA rule change, so it was submitted, is vague and ambiguous and lacks the degree of specificity demanded by the scheme of the legislation.
[36] In developing the submissions VACC contended that there is no industry such as the petroleum distribution, marketing and convenience retailing industry, known to commerce. It argued that, as a matter of construction, each of the proposed rules 5(a) and 6(a) must be read disjunctively and so read they are confused and confusing.
[37] VACC submitted that the issues of convenience of belonging and effectiveness of representation relate to the capacity of organisations to represent the industrial interests of members under the WR Act. The VACC rules allow it to represent members whose businesses evolve over time. The established membership patterns and evidence of industrial representation are relevant matters to be taken into account. VACC and the motor traders associations, it was submitted, each:
[38] VACC submitted that Schedule 1 of the WR Act demands that the membership of a registered organisation should share a community of industrial interest. A common commercial interest is of no consequence. VACC submitted that the population of employers, who would be eligible to join APADA if the eligibility rule is amended, do not share a community of interest. Reference was made to the legislative provisions for amalgamation of organisations and the requirement of the legislation for a community of interest between the amalgamating organisations. APADA, so the submission goes, is endeavouring to establish an organisation comprised of members with inherently conflicting industrial and commercial interests. The conflict of interests will lead to difficulties in representation and be a source of conflict as between members. APADA will not have the capacity to represent members equally.
[39] The Commission, VACC submitted, has a broad discretion to withhold consent to rule alterations. The public interest is a relevant consideration in this regard. The Commission is entitled to form the view that the proposed rule change will not provide any advantage or benefit for a significant number of employers who fall within the relevant class and, consequently, consent would be contrary to the public interest.
[40] The breadth of the proposed amendment to the eligibility rule is not supported or substantiated by the grounds advanced in support of it. The rule, it was submitted would extend far beyond its stated purpose. To the extent that the rule extends beyond its stated purpose and its terms according to the Gazette notice it should be refused on public interest grounds.
[41] It was further submitted that APADA made an agreement with VACC and the motor traders associations in 1986 in which it undertook that it would exclude from the scope of its eligibility rules businesses operating within the industry usually carried out in motor garages or establishments or motor service stations concerned with the retailing or petroleum products (service station exclusion). The undertaking was incorporated by consent into the APADA eligibility rules.
[42] VACC further submitted that APADA gave no notice of its intention not to be bound by or to honour the agreement. On 23 December 2004, APADA, without notice to the VACC or the motor traders associations and, in breach of agreement, applied for and was given consent to remove from its eligibility rules the service station exclusion. Furthermore, in the 2004 application to alter its rules APADA did not disclose to the Commission its 1986 agreement with VACC and the motor trades associations. In the circumstances the Commission should refuse its consent to the rule changes.
[43] Turning to the broader issues of the objects of the WR Act and Schedule 1, VACC submitted that the proposed eligibility rule is inconsistent with, and does not promote the maintenance of a simplified national system of workplace relations. Furthermore, the rule, if altered, would not support a framework for harmonious and productive workplace relations and would disrupt and erode the delivery of training and the promotion of the interests of young people in the workforce by VACC and the motor traders associations.
[44] VACC submitted that APADA's proposed merger with AACS will so change the nature of the constitution of APADA that it will no longer be a genuine association of employers. AACS would not be entitled to registration as an organisation in its own right and has no interest in the industrial services of APADA.
[45] In relation to the issue of demarcation VACC submitted that the prospect of competition is real and is likely to create demarcation disputes and confusion that would be harmful to business.
[46] Finally, VACC submitted that if the Commission was persuaded to consent to the alteration it should do so only to the extent necessary to allow APADA to represent its traditional distributor members in their retail activities which are ancillary to their principal business.
[47] VACC contended that convenience and petroleum marketing in the context of the motor industry are activities associated with fuel retailing in service stations and as such they are not the activities traditionally carried on by APADA members.
[48] The retail marketing and sale of petrol and petroleum products and associated business activities, it was submitted, are, by dint of the agreement between APADA and VACC and the motor trades associations and the service station exclusion that was embodied in APADA's rules, the traditional province of VACC and the motor trades associations. VACC submitted that, consistent with that traditional area of coverage, it and the motor trades associations have established, operated and maintained service station and convenience stores divisions. The proposed name change will create confusion for businesses that operate in the retail petroleum industry and whose interests are or might be represented by the several service station and convenience stores divisions within VACC and the motor trades associations.
[49] APADA submitted that the rule alterations are about accommodating developments in the petroleum and convenience retailing industries. The objectors, APADA contended, have no greater interest in its application than the maintenance of their monopoly and the prevention of competition. Service to members, it was submitted, is of no concern to the objectors. Service to members is the concern of APADA and those entities agitating for it. APADA has members who want its services and they will have the opportunity to access it by the expansion to its rule as contemplated by the proposed alteration.
[50] The rule alterations, APADA contended, were made in accordance with the rules. So much was not contested and I am satisfied that it is so.
Ambiguity and Class of members who would be eligible
[51] APADA, in common with the VACC submissions, submitted that the first step for the Commission in considering whether to grant the application is identification of the class of members who would be eligible for membership of APADA by reason of the rule alteration. Only then can the no other organisation test be applied. It contended however, that there must first be some intersection between the class of employers who would be eligible and the class of members covered by the objectors. According to APADA's argument the test need not be applied if there is no intersection of the classes and no intersection occurs in this case.
[52] APADA submitted that, to the extent that it is necessary to ascertain a class of members who would be eligible for membership, there was no ambiguity in the proposed rule change. It conceded that the relevant class must be identified with some degree of specificity albeit not to the degree for which VACC contends. The class may nonetheless be described in broad terms provided only that they allow the class to be readily identified.
[53] The identification of the class is achieved in this case to the relevant degree of specificity, APADA submitted, by applying the substantial character test, i.e. the factual test applied to determine whether or not the relevant enterprise of an employer is part of the relevant industry. APADA contended that in the instant case the relevant class is comprised of:
(a) petroleum retailers, but only to the extent that such a petroleum retailer is substantially a convenience retailer; and
(b) convenience retailers; that is, a retailer the substantial character of whose operation is convenience retail.
[54] A wholesaler/distributor of petroleum, APADA submitted, is engaged in activities which fall within APADA's current eligibility rules. To the extent that a petroleum distributor also engages in retail activity the distributor is not thereby ineligible for membership of APADA. Entities whose substantial character is that of petroleum retailer would not be eligible for membership under the alteration. It contended that under the proposed rule a retailer of petroleum who is not also a wholesaler/distributor of petroleum would not be eligible for membership of APADA. Convenience retailing is not however, under the proposed rule, qualified by the adjective petroleum as is distribution and marketing. A stand alone convenience operator would be eligible for membership under the proposed rule.
[55] APADA submitted that a generous approach is to be taken to the construction of eligibility rules. The approach proper to take is the common sense approach taken in the construction of commercial contracts. A common sense approach to the interpretation of a document, APADA submitted, is to be preferred to that of a narrow technical construction. Where two or more constructions are open words may be implied to give an otherwise unreasonable result a construction which accords with business commonsense. APADA submitted that while the Commission must apply orthodox principles of construction it should nonetheless take a generous approach to the construction of eligibility rules.
[56] According to APADA's submissions the phrase convenience retailing industry has meaning irrespective of whether there is or is not such an industry. It is only necessary that the Commission find that the phrase is capable of meaning and not that it is in fact an industry. APADA submitted however, that there is a convenience retailing industry and this can be found by reference to the objective background facts and the Commission is entitled to have regard of such facts. APADA then referred to a number of publications which it contended were objective facts establishing the existence of a convenience retailing industry.
[57] After referring to the dictionary and legal authority on the meaning of industry and convenience store APADA submitted that the convenience retailing industry is comprised of convenience stores, employees working in those stores, and those performing administrative, management or head office functions in relation to a convenience retailing operation.
[58] Addressing the no other organisation test APADA returned to its earlier thesis to the effect that it need not be applied in the absence of any intersection between the class of employers who would be eligible for membership and the membership of the objectors. APADA submitted that membership of the objectors is defined by reference to industry. Consequently, each objector is entitled to enrol as members, employers the substantial character of whose enterprise falls within its specified industry. Any employer that does not fit that description, APADA contended, is not entitled to be included in the class for the purposes of the test.
[59] APADA submitted that none of the objectors is entitled to enrol as a member, a service station/convenience store, the substantial character of whose enterprise is a convenience store. To do so would exceed the scope of their respective constitutions. A service station, APADA contended, is not an inherent part of the retail motor trade, retail motor business or retail motor industry, or allied trade or business. The retail motor industry is primarily concerned with the sale of motor vehicles. An allied trade or an allied business, so the argument goes, must be allied to the sale of vehicles. A service station is not a business in which motor vehicles are sold. It is not a retail motor business, nor is it necessarily an allied trade or business. The focus of the service station however, is on the vehicle and not the occupant of the vehicle. To that extent a service station may be concerned in the operation of a mechanical workshop and the retail of fuel but not in convenience retailing.
[60] The focus of a convenience store is the occupant of the vehicle and not the vehicle itself. Accordingly, APADA submitted, a convenience store is not within the purview of a service station and its denotations. To the extent that the objectors have enrolled as members those businesses that operate a service station that has the substantial characteristics of a convenience store they have exceeded the limits of their constitutions and the businesses are not validly enrolled as members and therefore not entitled to be included in the class for comparison with the class of employers that would be eligible for membership by reason of the rule alteration. A convenience store, APADA submitted, is not part of the retail motor industry, retail motor trade or retail motor business.
[61] To the extent that the VACC, MTA-Qld, MTA-SA or the MTA-NSW are entitled to enrol businesses that operate service stations that does not entitle any of them to enrol convenience store operators as members. A convenience store that sells fuel is not in the retail motor industry, retail motor business or in an allied trade or business. APADA submitted that on a proper analysis of the rules of the Objectors the intersection of the class, to the extent that there is any, is small.
[62] If the objectors or any of them have or has the constitutional capacity to enrol as members businesses that operate convenience stores membership of those organisations or any of them is no more convenient than is membership of APADA and none of them can more effectively represent such members.
[63] APADA submitted that the objectors' contentions with respect to community of interest are misguided and without substance.
[64] APADA submitted that to the extent that the proposed rule extended beyond its stated purpose the Commission is armed with the power necessary to vary the rule so that it conforms with its construction proper to achieve the purpose.
[65] APADA denied the existence of any agreement or understanding between it and any of the objectors. The full extent of the agreement reached in 1986 in settlement of the objections then made to the APADA rule alteration, was recorded in transcript and was reflected in the rule itself. There was no agreement or understanding ancillary to those on the record. The agreement as reflected in the rule and in the transcript does not impinge in any way on the rights of APADA to alter its eligibility rules, including that part of the rule inserted by way of settlement of the objections in 1986. There are no discretionary grounds, APADA contended, for refusing consent to the alterations.
[66] The reason given for the name change is that the proposed name will reflect the changed constituency of the members of the organisation, which is the subject of a separate application to alter the eligibility rules of the organisation. The statement of reasons then refers to the proposed merger with AACS. [3] APADA submitted that the objections to its application in respect of a change in its name are so minimal as to be objections in form only. The objectors provide no explanation to support their allegation that the name, if changed, is deceptively similar to any other organisation. It was submitted that the proposed name is not likely to mislead or deceive and is not similar to the name of any other organisation. APADA submitted also that consent to the name change should not be withheld if, contrary to its pleas, consent to the rule alteration is refused.
[67] Each party filed witness statements in support of their respective cases. In addition to the witnesses whose names appear in paragraphs [14] and [15] above APADA filed a witness statement of Raymond Blaney and the objectors filed one of Russell Delahaye, but neither was available to give evidence and no reliance was placed on the statements. All witnesses were required for cross-examination.
[68] Most of the witnesses were either engaged in petroleum retail operations or had experience in or with such operations. Most witnesses called by APADA, generally speaking, either operate or have experience in the operation of petroleum distribution businesses and petrol stations. The Objectors' witnesses either operate or have experience in the operation of service stations. Most of the witnesses from both sides professed, in varying degrees, knowledge of, or experience in the operation of convenience stores associated with petrol stations or service stations.
[69] One common theme in the evidence was that the nature of the fuel industry has changed dramatically over the past 20 or 30 years. The number of petroleum distribution businesses has decreased as a result of mergers and acquisitions. Although there are still a large number of operators in the automotive fuel retailing industry generally, about three quarters of the operations are owned by or directly affiliated with the four major petroleum refining and marketing companies. [4] The independent petroleum distribution businesses that exist now are significantly fewer in number but much larger than they were 30 years ago and most of them own or operate petrol retail businesses and convenience stores.[5] Some of them operate multiple retail petrol businesses and convenience stores.
[70] The introduction of self-service stations in the 1960's or 1970's heralded the beginning of petrol stations retailing products other than petroleum products. The early ventures however were little more than a kiosk operation. [6] Ever decreasing margins on retail fuel sales has ushered in a gradual increase in the range of the more profitable retail products at petrol stations, such as those that are commonly found in convenience stores. Membership of APADA has fallen from 240 to 120, largely due to mergers and acquisitions.
[71] Turning to the specifics of the Objectors' evidence I am satisfied that each has significant membership. Each of VACC and MTA-NSW has about 5000 members. The membership of MTA-Qld is made up of 2179 businesses. MTA-WA boasts about 1800 members and MTA-SA has about 1000 members. The objector organisations are divided into trade or industry sector divisions. The divisions generally coincide with the trade or industry sectors from which their membership is drawn. They commonly include new and used car dealers, farm machinery dealers, automotive electricians, engine re-conditioners and service stations. Other types of members of VACC are tyre dealers, LPG installers and tow truck operators.
[72] I am satisfied that each Objector provides to its members a range of services, including industry training, industrial relations advice, commercial advice and periodical publications. I am satisfied that each has represented its members on industry issues with State and federal governments.
[73] VACC and MTA-WA respectively has a Service Station and Convenience Store Division (respectively SSCSD and SSCSD-WA). Each of MTA-Qld and MTA-SA has a Service Station Division ( respectively SSD-Qld and SSD-SA).
[74] MTA-NSW had but no longer has a service station division. It does however, have an affiliation agreement with the Service Station Association Limited (SSA), an association registered under the Corporations Act 2001 (NSW). SSA commenced operation in 1934 and boasts 500 members spread throughout Australia, but predominantly located in New South Wales. Individuals, corporations or any entity whose primary role is to own and operate a business dispensing petrol and motor fuel qualifies for membership. Its members become affiliate members of MTA-NSW.
[75] The primary criterion for membership of the VACC's Service Station and Convenience Store Division is petroleum retailing. [7] Similar criteria are applied by each of the Objectors in respect of membership of their respective service station divisions or associations.[8] Mr Redfern described the typical profile of members of the SSCSD of the VACC as follows:
…it would have a number of petrol pumps; it would provide air and water for vehicles. The shop side of it would contain a variety of automotive lubricants and convenience store items; bread, milk, confectionary and the like. [9]
[76] According to Mr Bowden SSA accepts as members individuals, corporations or any entity whose primary role is to own and operate a business dispensing petrol and motor fuels. He said there is a small number of members whose primary business is mechanical but who also sell fuel. Mr Halstead outlined what he saw as the conflict between petrol station operators and distributors and expressed concerns for the future for SSA in contemplation of consent being given to APADA's application.
[77] Mr Hatton said, and I accept, that the SSA members who are affiliate members of MTA-NSW sell motor fuels and provide other services including vehicle servicing and repairs, as well as the sale of other convenience goods such as milk, bread, magazines, drinks, confectionary, ice, fish bait, various food items, including dine-in and take-away, vehicle hire, car-wash-services and facilities. He later stated:
A fuel retailing convenience store is different from other convenience stores because the fuel retailer focuses on servicing the motorist. [10]
[78] Each of the Objectors provides a range of benefits and services for its members, including representation in commercial, employment and industrial relations matters. There is no evidence to suggest that the services provided are anything other than efficient and effective.
[79] It is clear from the Objectors' evidence as a whole that an establishment or facility would not be a service station that is eligible for membership of one of the Objectors unless it provided at least one of the available vehicle servicing facilities such as retail fuel, a workshop or a car wash. It need not have a convenience shop or store but invariably does. It is said, and I accept, that most service station members of the objectors have a convenience offering of one sort or another.
[80] Giving evidence in APADA's case Mr Symington focussed on the developments in the industry and the expansion of distributorships into retail fuel outlets. He said, and I accept, it is very rare for a distributorship not to have a retail outlet and not uncommon for a distributor to have a number of retail operations. In 2006 APADA and AACS agreed to merge because of the common interests of their members. According to Mr Symington membership of the organisation under the proposed rule changes will be comprised of:
Currently APADA regards as not eligible to be admitted to membership those members of AACS who are not engaged in the transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto.
[81] Mr Killeen in his evidence said that the convenience retailing industry, although a well established industry internationally, was just starting to be a recognised retail market sector in Australia in 1990. He spoke of its character from a physical perspective and as a utility. Some convenience stores have a fuel offer and some do not. According to Mr Killeen, AACS regards fuel as another product category in convenience retailing. The most significant feature of a convenience retail offer is the convenience to the public to purchase products at a time when it is difficult to purchase anything elsewhere. The AACS rules define a convenience store in the following terms:
A retail business with primary emphasis placed on providing the public with a convenient location to purchase quickly their requirements from a wide range of consumable products and which may possess one or more of the following characteristics:
(a) building size between 80 and 350 square metres;
(b) modern well lit air conditioned facilities with extensive equipment such as freezers, refrigerators and microwave ovens;
(c) off street parking and convenient pedestrian access;
(d) extending trading hours, commonly 24 hours a day, 7 days a week;
(e) sale of products including grocery items, dairy products, fresh produce, bakery items, snack foods, beverages, tobacco, health and beauty aids, confection, prepared foods to go, frozen foods, meats, publications, petrol, LPG;
(f) services including automated teller machines, cheque cashing, movie rentals, lottery tickets, film processing and video games; and
(g) such other characteristics as may be specified by the committee from time to time.
[82] AACS has supplier members and retail members. Supplier members are entitled to associate membership only and are not entitled to vote. Generally they are those businesses which supply products and services to the convenience store industry. These products are from every category in convenience, retailing, including fuel. Cadbury Schweppes and Coca Cola are examples of supplier members of AACS.
[83] Retail members are voting members of AACS and consist of large organisations operating more than 100 sites and members operating a number of sites fewer than 100. Of the 55 retail members only about 18 are not currently distributors of petroleum. About 30 of the 55 are members of APADA or, in Mr Killeen's opinion, eligible to be members under APADA's current rule.
[84] Ms Taylor gave evidence about the make up of APADA membership and the nature of the business of a distributor, APADA's involvement in a major dispute on behalf of one of its members and the evolving relationship between oil companies and APADA membership. It was stated that the current exclusion of the oil companies from APADA membership was a consequence of the negotiation of supply arrangements between APADA members and oil companies. There was an apprehension on the part of APADA that the oil companies could use their size and power to inhibit the negotiating power of distributors.
[85] Ms Taylor set out a list of awards to which APADA is respondent and gave evidence about APADA's involvement in negotiations with other organisations on behalf of its members.
[86] Mr Gough gave evidence about his 20 years of experience in the fuel industry. He then detailed the growth of his distributor businesses and the emergence of Northern Marketing through mergers. Of particular significance was his evidence about the way in which Northern Marketing expanded its business into service stations and convenience stores. It now has 25 retail service station sites, all of which operate convenience stores. Northern Marketing is considering moving into convenience stores without any petroleum retail.
[87] Messrs Lamb and Clarke gave evidence about the nature of the petroleum distribution industry and of the developments in their respective businesses. Each of their businesses operates multiple service stations with a particular emphasis on convenience retailing.
Class of persons who would be eligible for membership
[88] When considering an application for consent to an eligibility rule under s.158 of the RAO Schedule, it is necessary to identify the persons who would be eligible for membership because of the alteration to the eligibility rule. The process involves identification of the classes respectively eligible for membership under the existing rule and under the alteration as if it formed part of the rules. So much was determined by the Full Court of the Federal Court in Re Australian Workers Union, Ex parte Construction, Forestry, Mining and Energy Union, [11] wherein Gray and Moore JJ, (with whom Merkel J agreed) observed as follows:
Determining who are the relevant employees would ordinarily involve ascertaining the scope of the pre-existing eligibility rules of the applicant organisation and the scope of the alteration. This will often entail construing both the pre-existing eligibility rules and the alteration on the assumption that it formed part of the eligibility rules. [12]
[89] Under APADA's existing eligibility rule the class of persons eligible for membership of the organisation comprises employers engaged in the petroleum distribution and marketing industry. The expression petroleum distribution and marketing industry appears to be a composite phrase. It is not however, a phrase that has any recognisable trade meaning, although some of the words within it have what may be regarded as a trade meaning. To prove a trade meaning by trade usage, the usage must rest on actual instances of use, and not on mere opinion. [13] According to ordinary usage the expression would have the meaning of transporting, buying and selling of petroleum product. Yet it has a much wider meaning than that according to the definition given to the expression by the rules themselves. The rules define both the industry and the activity of petroleum distribution and marketing as covering or meaning transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto. Petroleum product is defined as any derivative of petroleum or substitute therefor either including or of like nature to motor spirit (petrol), aviation fuel, heating oil, kerosene, lubricating oils and greases, diesel fuel and liquefied petroleum gases.
[90] Words and expressions that are the subject of a definitions clause are to be understood in the defined sense. The words or expressions so defined are to be taken to include things which would not ordinarily be understood from the words or expressions themselves. As Barwick CJ, McTiernan and Taylor JJ put it in Gibbs v Federal Commissioner of Taxation: [14]
The function of a definition clause in a statute is merely to indicate that when particular words or expressions the subject of definition, are found in the substantive part of the statute under consideration, they are to be understood in the defined sense - or are to be taken to include certain things which, but for the definition, they would not include. [15]
Although the principle was stated in the context of a statute it is, in my view, equally applicable to any contractual or other document affecting or regulating the affairs of parties bound by it.
[91] The evidence in these proceedings is that the pre-existing membership of APADA comprised persons, except certain major oil companies, who were engaged in transportation, storage and sale in bulk of petroleum and related products and the operation of petrol stations and convenience stores retailing fuel and other goods and products. In so far as persons operating service stations and convenience stores retailing fuel and other goods and products are members of APADA they would be entitled to be members only if one accepts that such activities fall within that part of the definition of petroleum distribution and marketing that speaks of and such other activities as are ancillary to their primary activity of transportation, storage and sale in bulk of petroleum and related products.
[92] The question whether one activity is incidental or ancillary to another is one of degree. This was the opinion of Gibbs J in Reg v Holmes; Ex parte Public Service Association (N.S.W.), [16] wherein his Honour was considering whether the activities of the clerical and administrative employees in the Department of Motor Transport are ancillary or incidental to the transportation and distribution of goods and persons. Gibbs J held that the activities of the relevant class of employees were only incidental to the transportation in a remote and indirect way. His Honour expressed his opinion in the following way:
The question whether one activity is incidental to or ancillary to another is one of degree. For example, the duties of traffic police, and of magistrates sitting in the traffic court, might in one sense be said to be ancillary to transportation, but nevertheless it could confidently be said that their activities are not directly connected with transportation.
[93] It readily might be accepted that a service station retailing fuel is an activity that is at least ancillary to the sale in bulk of petroleum. That was at least partly the understanding of the parties in 1982 when APADA was first registered and resulted in the service station exclusion. I say partly the understanding because it is evident that there was also some apprehension about the reference to bulk sales of petroleum products being characterised in some way that covered certain sales at service stations. In my view service station operations fall within the description and such other activities as are ancillary thereto. Whether the operation of a convenience store is an activity that is ancillary to transportation, storage and sale in bulk of petroleum will depend on the nature or character of the business of a convenience store.
[94] It is clear from the evidence that a convenience store has certain physical characteristics, none of which is related to transportation, storage or sale in bulk of petroleum. The activity of a convenience store is generally described as a retail business or convenience retailing and involves the offer for sale of a range of consumer products, such as confectionery, tobacco, groceries, dairy products, fresh produce, bakery items, beverages, frozen food, meats, fast food, and a limited range of health and beauty products. Although convenience stores attached to service stations may sell petroleum derivatives also, I am satisfied that, contrary to the view expressed by Mr Killeen, such items are an accessory to the selling of fuel and are sold, not as part of the convenience retail, but as part of the services normally provided by a service station or petrol station.
[95] As the evidence reveals, convenience stores may sell or provide also certain services. These include automated teller machines, cheque cashing, movie rentals, lottery tickets, film processing and video games. In my view, the operation of a convenience store has no relevant nexus with transportation, storage and sale in bulk of petroleum and related products and could not be regarded as an activity ancillary thereto.
[96] Taking account then of the evidence and the rules, the relevant class that was eligible for membership under the pre-existing eligibility rules comprised employers, other than certain major oil companies, that were engaged in:
(a) transportation, storage and sale in bulk of petroleum and related products; and
(b) the operation of service stations retailing petrol and related products as an ancillary to the business of transportation, storage and bulk sales of petroleum and related products.
There are two important elements to the class. First, the conjunction and linking the other ancillary activities; i.e. the operation of service stations in this case, does not admit of alternatives. In other words a service station business would be eligible for membership only if the business was carried on in conjunction with the transportation, storage and sale in bulk of petroleum and related products. Secondly, the adjective ancillary qualifies the noun activities indicating that those other activities are subordinate to something. The adverb thereto clarifies the something as the primary activity, viz transportation, storage and sale in bulk of petroleum and related products. Thus, a person engaged solely in transportation, storage and sale in bulk of petroleum and related products would be eligible for membership of APADA. A person engaged solely in a service station activity would not.
[97] I now turn to the identification of the relevant class that would be eligible for membership of the organisation under the proposed changes to the eligibility and industry rules. On its proper construction the proposed eligibility rule [17] would make eligible for membership of APADA employers, including major oil companies, engaged in the petroleum distribution, marketing and convenience retailing industry as defined. The proposed industry rule[18] identifies the industry in connection with which APADA is formed as the petroleum distribution, marketing and convenience retailing industry. On its proper construction this must be read as a single industry. APADA is not entitled or eligible to act on behalf of or represent any entity eligible for membership in industrial matters other than in relation to the industry as described.[19]
[98] The objectors contended that there is no such industry as petroleum distribution, marketing and convenience retailing. That may be true as far as it goes, but rule 5(b) defines the expression petroleum distribution, marketing and convenience retailing industry as covering the transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto including products and services associated with convenience retailing. And the expression petroleum distribution, marketing and convenience retailing as it appears in the eligibility rule is defined by rule 6(b) in practically identical terms as meaning, in contrast to covering, the transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto including products and services associated with convenience retailing.
[99] I do not accept as accurate the description or identity of the relevantly extended class that APADA advanced in its submissions, namely that comprised of:
(a) petroleum retailers, but only to the extent that such a petroleum retailer is substantially a convenience retailer; and
(b) convenience retailers; that is, a retailer the substantial character of whose operation is convenience retail. [20]
[100] APADA's characterisation in its submissions and its evidence as to the effect of the proposed change is not consistent with the syntax of the definition in rules 5(b) and 6(b). In its application APADA identified the effect of the proposed alteration in the following terms:
The effect of the proposed alteration is to extend the Applicant's eligibility Rules to cover convenience retail activities that are now a common adjunct to transportation, storage and sale in bulk of petroleum and related products by members; and to remove the present limitation on the membership of oil companies.
Upon the consent of the Commission to the proposed alteration as set out in the present application, the Applicant intends to enter into an agreement with the Australasian Association of Convenience Stores ("AACS"), an unincorporated association [21] which is not a registered organisation under the Workplace Relations Act 1996 (Cth) ("Act"), whereby the Applicant will accept applications for membership from members of AACS (and ultimately AACS will cease to exist). This arrangement is intended to create an organisation which better reflects the changing industry in which the Applicant's, and AACS's, members operate.
[101] Common adjunct though they might be in fact, convenience retail activities would not be regarded as an activity that is ancillary to the transportation, storage and bulk sales of petroleum and related products. The identity of the class posited by APADA gives to the expression such other activities as are ancillary thereto including products and services associated with convenience retailing an independent operative effect. In other words the other activities in which the member engages need bear no relationship with the transportation, storage and sale of bulk petroleum and related products. The other activities are in that sense not an ancillary to transportation, storage and sale in bulk of petroleum and related products by members, but an adjunct to that activity; that is something added but not necessarily part of it. But the word used in the rule is ancillary, not adjunct. To achieve its object APADA would have to use the conjunction or to link the other ancillary activities as an alternative. Perhaps it intended to add the inclusive words immediately after the words related products, but it has not done that. Also it is not clear what, if any difference the removal of the definition of petroleum products was intended to make. How then is the class to be defined?
[102] In my view there is ambiguity in the definitions in rules 5(b) and 6(b). There is a tension between the inclusive elements of products and services associated with convenience retailing which renders the phrase insensible in the context in which those elements appear. The rule talks about ancillary activities. While services may be an activity products certainly is not. The draftsman of the rule may have intended the word including, as I have suggested in the preceding paragraph, to be an extension of the words related products. It may have been intended to indicate an extension of the other ancillary activities or otherwise as a means of identifying that which follows as falling within the definition of activities when it otherwise would have been in doubt. In either event the result would be an absurdity unless some other words are implied. Whatever the words that are to be implied however, they must maintain the integrity of the language of the rule and its grammatical value.
[103] The evidence clearly establishes as a fact the engagement of members of APADA in convenience retailing as an extension of their service station businesses. There is no evidence that existing members are engaged in free standing convenience retailing operations, although Mr Gough expressed some designs in that regard. If the word including as it appears in the definition is intended to be an extension of the ancillary activities it might well be that to achieve the intended meaning the words the supply of would have to be implied so that the definition would then read:
For the purpose of this clause the petroleum distribution, marketing and convenience retailing industry covers the transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto including the supply of products and services associated with convenience retailing.
An alternative would be to imply into the inclusive phrase the words the sale of. Adopting either of these constructions would give an extended meaning to the expression such other activities as are ancillary thereto. The other activities would be taken to include the activities of supplying, or selling as the case may be, products and services associated with convenience retailing, even though those activities would not, but for the definition, be included as ancillary to the transportation, storage and sale in bulk of petroleum and related products.
[104] The verb supply is a word of very wide import and could mean both wholesale and retail supply associated with convenience retailing. The word sale is a noun and would have a more limited meaning which is akin to retail selling associated with convenience retailing. Given the effect and the purpose of the rule change it is unlikely that the relevantly implied word in this context is supply. In any event it was Mr Symington's evidence that suppliers to convenience stores would have a limited form of membership of the proposed amalgamated organisation that would be formed if consent to the rule change is granted. [22] APADA could not have intended the implication of the words the supply of in so far as it relates to products as that would allow full membership to suppliers to convenience stores. Hence if any words are to be implied it would have to be the words the sale of. The words the supply of would however, sit comfortably with the notion or concept of services. It is recalled that one service provided by convenience stores is access to an ATM.
[105] The implication of the words the sale of modifying products and the supply of modifying services would tend to a construction that is syntactically consistent with the expression and such other activities. It would make eligible for membership entities engaged in the sale of products and the supply of services associated with convenience retailing as identified in paragraphs [94] and [95] above. But, for the reasons set out in paragraph [101] above, such activity would necessarily be subordinate to the transportation, storage and sale in bulk of petroleum and related products. Thus the extended meaning given to the words such other activities as are ancillary thereto by the inclusive phrase including products and services associated with convenience retailing does not, in my view achieve APADA's object of extending membership to convenience retailers the substantial character of whose operation is convenience retail.
[106] The class that would be eligible for membership under the rule if the alteration as varied formed part of the rules would be employers that are engaged in businesses of:
[107] I would not be prepared to consent to the proposed rule alteration in its current form because of its ambiguity. APADA submitted that I am at liberty to vary the rule alteration or to consent to it in part so as to give it meaning and effect, provided only that any change that I make maintains its integrity and does not expand the intended class. Subject to satisfaction of all other considerations required by s.158 of the RAO Schedule I would be prepared to consent to an alteration to rules 5 and 6 if sub-rules 5(b) and 6(b) were amended to reflect the changes proposed by paragraph [105] above. In making the amendment the class would be capable of identification and would be characterised as it is in the preceding paragraph, albeit inconsistent with the intended effect of the rule change.
[108] On the basis of the foregoing construction it is clear that the only extension to eligibility for membership is those entities, including major oil companies that, as an ancillary to the transportation, storage and sale in bulk of petroleum and related products operate convenience stores and/or sell products and supply services associated with convenience retailing.
[109] APADA is concerned with extending its eligibility for membership to those entities that are members, or eligible to be members of AACS. The membership of AACS is not contingent upon engagement in the activities of petroleum distribution and marketing. In order to achieve APADA's object and to constitute the class as posited by it in its submissions the syntax of rules 5 and 6, and in particular the definitions, would need to be altered. Whether any change would need to be made to the industry rule in the circumstances is problematic. There is no requirement for a registered organisation to have an industry rule under the current legislation. That an eligibility or membership rule may go beyond the industry in respect of which an organisation was registered is trite. [23] While I may be at liberty to change the proposed eligibility and industry rules in a way that gives them meaning and provided it does not expand the class, I cannot re-write the rule in its entirety or in any way that detracts from the integrity of the grammatical value of the rule as it was approved by the organisation in accordance with its rules.[24] The sort of change that is necessary to achieve APADA's object is a matter that may need to be effected in accordance with the rules and a fresh application. That is a matter about which I will, in due course, hear further submissions.
[110] I will proceed on the basis that the rule may be altered in accordance with the amendment that I have proposed, or otherwise having the effect that APADA sought to achieve by its application.
[111] It now becomes necessary to apply the no other organisation test to determine whether a relevant entity is entitled to membership of the Objectors or any of them. I must determine whether the relevant class of employers can more conveniently belong to the objectors or any of them and, if so, whether the members of the class can more effectively be represented by them.
[112] Assuming the class is as I have identified it, is there a relevant intersection between the membership of the objectors and the class that would be eligible for membership of APADA if consent is given to the alteration? The answer to that question primarily turns on the meaning of the words motor trade or business as those words appear in the eligibility rules of the several Objectors. Mr Redfern in his evidence said a service station falls within the meaning of the phrase motor businesses. [25] It seems clear that a service station does not fall within the meaning of the words motor trade.
[113] The issue then is whether a service station is part of the motor business or an allied business. It has not been suggested that the word motor in this context means anything other than a motor vehicle. It seems to me however, the expression motor business is to be construed as a composite phrase and in accordance with its current denotation. In that context the Objectors would have it that service stations are part of the motor business and that convenience stores fall within the denotation of the expression service stations. Although the assertions of the Objectors' witnesses and, to a lesser extent, APADA's witnesses, seem to suggest that is the proper denotation, there is very little evidence adduced in this case to show the contemporary development of the meaning given to the expression service station. There is in fact some material to suggest the contrary. [26]
[114] VACC, MTA-Qld and MTA-NSW each have the constitutional capacity to enrol as a member entities engaged in a motor business. The evidence shows that the principal character of a service station is the sale of fuel for motor vehicles. I am satisfied that in that context service stations fall within the classification of a motor business or an allied business. There is no evidence however, to support a finding that a convenience store either falls within the denotation of the expression motor business or the denotation of the expression service station.
[115] APADA submitted that none of the objectors is entitled to enrol as a member, a service station/convenience store, the substantial character of whose enterprise is a convenience store. The evidence is that many service stations that are covered by the Objectors have convenience stores as part of their operations. The existence of the convenience stores does not preclude the entities engaged therein from membership of the Objectors, provided of course that they are, according to the substantial character test, a service station and not a convenience store. It is clear from the evidence that VACC and the motor traders associations have enrolled as members entities that operate service stations with convenience store products and services. The extent of the convenience store operations is a matter of degree and whether they are properly to be described as a service station operation or a convenience store might ultimately depend on the application of the substantial character test. In any event it is apparent that, with the possible exception of MTA-Qld, none of the objectors has the constitutional capacity to enrol free-standing convenience stores as members.
[116] It follows that I am satisfied that there is no other organisation to which the persons who would be eligible for membership because of the rule alteration could more conveniently belong or which would more effectively represent them. To the extent that the relevant intended class might conveniently belong to MTA-Qld, I am not satisfied that it would be not be more convenient to so belong and that MTA-Qld could not more effectively represent them. Even if the APADA rule alteration had the intended effect there would be no intersection with the relevant class, because a convenience retailer the substantial character of whose operation is convenience retail does not fall within the concept of a motor trade, a motor business or one that is allied to it.
[117] VACC submitted that Schedule 1 of the WR Act demands that the membership of a registered organisation should share a community of industrial interest. I am not satisfied that the alteration to which I am prepared to consent will give rise to conflicts of industrial interests among the membership or between the membership and the organisation.
[118] The Commission, VACC submitted, has a broad discretion to withhold consent to rule alterations. I accept that the public interest is a relevant consideration in this matter. As the proposed rule to which consent may be given does not travel the distance anticipated by the Objectors much of the public interest argument is of no consequence.
[119] It was submitted that APADA made an agreement with VACC and the motor traders associations in 1986 in which it undertook that it would exclude from the scope of its eligibility rules businesses operating within the industry usually carried out in motor garages or establishments or motor service stations concerned with the retailing of petroleum products (service station exclusion). Undertakings in settlement of objections to eligibility rule alterations are an important aspect of the operation of the jurisdiction to consent rule changes. In The Bread Manufacturers' Industrial Association of Australia [27]Senior Deputy President Williams makes the point in the following terms:
It has been a long standing practice, in applications for registration or consent to change of name or alteration of eligibility rules, for objections to be settled on the basis of agreements containing undertakings. The legal status of such agreements and undertakings may be questionable. The moral status, in my view, is not. Such agreements, entered into in good faith by the parties, should be honoured by them. The parties to such agreements should be able to rely on them. If that were not the case, then public confidence in the system of registration of organisations would be seriously jeopardised.
Registration under the Act not only confers rights, it also confers obligations, some express and others implied. Continued participation in the system generally requires an organisation to abide by the agreements it makes, particularly an agreement which enabled it to enter the system in the first place.
Except in exceptional circumstances, the Commission, in my view, should not take any action which would have the appearance of condoning a refusal and/or failure by an organisation to abide by the terms of an agreement made in settlement of an objection to a registration application, particularly the terms of an undertaking contained in such an agreement.
[120] In the instant case the undertaking that APADA gave in 1986 was to incorporate in its rules an exclusion in respect of service stations. It did that. There is no evidence of any other terms of the undertaking. Mr Redfern gave evidence to the effect that David Russell represented VACC and other motor traders associations in negotiations with APADA over its registration in 1986. Mr Russell is a Senior Manager with VACC. He was not asked to give evidence in this matter and no reasonable explanation was offered for not calling him on the issue. [28] Specifically there is no evidence that APADA would not seek to alter that part of its rule which excluded from its membership service stations or that it would give any notice to VACC, or anyone else, other than that required by statute, of any intention to do so.
[121] As is shown in the background material set out above, on 23 December 2004, APADA applied for and was given consent to remove from its eligibility rules the service station exclusion. Notice of the application was given in the Gazette. A public notice of the hearing of the application was given in the press and on the Commission's public notice boards. There was no objection to the alteration and the Commission gave its consent. It is said that, in relation to the 2004 application to alter its rules, APADA did not give the Objectors or any of them notice of its intention to remove the exclusion in its rules and it did not disclose to the Commission its 1986 agreement with VACC and the motor traders association. In my view it had no obligation to do so. I am satisfied that APADA has not breached any undertaking or agreement that it made with any of the VACC or any other of the Objectors in 1986.
[122] It is unnecessary for me to address the claims of the Objectors about the rules being contrary to the objects of the WR Act and Schedule 1 in light of the conclusions I have reached about the scope of the class of employers that would be eligible for membership as a result of the amended alteration. The rules are not inconsistent with the maintenance of a simplified national system of workplace relations. They do little more than consolidate the factual circumstance.
[123] The provisions of s.158(7) regarding demarcation do not apply to employer organisations. But in any event they do not arise in light of my conclusions about the relevant class.
[124] I am satisfied that the change of name proposed in the application has been made under the rules of the organisation and:
(a) is not the same as the name of another organisation; and
(b) is not so similar to the name of another organisation as to be likely to cause confusion.
Furthermore, I consider that the name would fairly represent the nature of the organisation with the amended alteration to the eligibility rule. Accordingly, I consent to the change in the name of the organisation.
[125] In all the circumstances I would be prepared to consent to the following alterations to APADA's rules:
1. The name of the Association is "Australasian Convenience and Petroleum Marketers Association".
(2) Delete Rules 5(a), 5(b), 5(c), 6(a) and 6(b) and insert the following:
5(a) The Association is formed in or in connection with the petroleum distribution, marketing and convenience retailing industry.
5(b) For the purpose of this clause the petroleum distribution, marketing and convenience retailing industry covers the transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto including the sale of products and services associated with convenience retailing.
5(c) Notwithstanding any other provisions of this Constitution the Association shall not be entitled or eligible to act on behalf of or to represent a member or any person, firm, company, corporation or association eligible for membership of the Association in the Australian Industrial Relations Commission or before any other industrial tribunal in respect of any industrial dispute (including a threatened impending or probable dispute) or any industrial matter other than in relation to the industry as described in paragraphs (a) and (b) of this clause.
6(a) Subject to the provisions of Clauses 10 and 12 of this Constitution membership of the Association shall be open to any person, firm, company, corporation or association engaged as an employer in the petroleum distribution, marketing and convenience retailing industry, which shall include any person, firm, company, corporation or association working on its own account.
6(b) "Petroleum distribution, marketing and convenience retailing" means the transportation, storage and sale in bulk of petroleum and related products and such other activities as are ancillary thereto including the sale of products and services associated with convenience retailing.
[126] The parties will be given an opportunity to be heard on the terms of any order that I may make. In addition APADA will have liberty to make further submissions about the nature of any variation to the rule alteration that it considers more effectively accords with its intent. The Objectors will have liberty to be heard in relations to any such submission that APADA may make. Directions to that effect will issue separately.
S. Forbes of Counsel instructed by K Wijewickrama of Arnold Bloch Liebler for Australian Petroleum Agents and Distributors Association.
S. Wood of Counsel instructed by K Lawler for Victorian Automobile Chamber of Commerce and Ors.
Printed by authority of the Commonwealth Government Printer
[2] Cf APADA submissions at [100].
[4] IBISWorld Industry Report, Automotive Fuel Retailing In Australia G5321, 1 December 2006.
[5] See generally the evidence of Symington and Gough.
[8] For MTAQ see Statement of Kowalski (Exhibit VACC-15); MTA-SA see Statement of Baldock (Exhibit VACC-23); MTA-WA see Statement of Marsland (Exhibit VACC-25).
[10] Exhibit VACC-17, paragraph 25.
[12] [2002] FCAFC 150; 120 FCR 527 at 547, [44]
[13] Curtis v. Peek 13 W.R., 230.
[16] Reg. v. Holmes; Ex parte Public Service Association (N.S.W.) [1977] HCA 70; (1977) 140 CLR 63 at 77.
[20] See also Exhibit APADA-33, paragraph [72].
[22] Exhibit 33, paragraph [88] - [89].
[23] See Reg. v Dunlop Rubber Australia Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia [1957] HCA 19; (1957) 97 CLR 71.
[24] See Re Federated Miscellaneous Workers' Union [Print M8056]; Association of Draughting, Supervisory and Technical Employees v Commonwealth Foremen's Association of Australia (Australian Public Service) (1990) 32 IR 359.
[26] Caltex Oil (Australia) v Holroyd Municipal Council (1983) 49 LGRA 77, Food Plus Pty Ltd v City of Perth [No.2] [1981] 5 APAD 414, Food Plus v Warringah Shire Council (1983) 50 LGRA 76, Nashville Investments Pty Ltd v Gull Petroleum (WA) Pty Ltd, (2000) 12 Leg. Rep. 7, Seldan Pty Ltd v Liquor Licensing Commission and Wonga Park Supermarket Pty Ltd, [1990] VicRp 88; (1990) VR 1009.
[28] see Redfern XXN, Transcript PN671-688.
(2002) 120 FCR 527
(1966) 118 CLR 628
(1957) 97 CLR 71
(1990) 32 IR 359
(1977) 140 CLR 63