Brown v Health Services Union

Federal Court of Australia|2012-09-14|Before: Mr P, Flick J

Number of paragraphs: 18

Counsel for the Honourable Michael Francis Moore in his capacity as Administrator of HSUeast and the HSU East Branch: Mr P Punch

Solicitor for the Honourable Michael Francis Moore in his capacity as Administrator of HSUeast and the HSU East Branch: Carroll & O'Dea Lawyers

Solicitor for the Commonwealth Minister for Employment and Workplace Relations: Corrs Chambers Westgarth

Counsel for the Applicants in NSD621/2012: Ms E Starkey

Solicitor for the Applicants in NSD621/2012 Holding Redlich

Counsel for the Health Services Union: Ms E Starkey

Solicitor for the Health Services Union: Holding Redlich

Counsel for HSUeast: HSUeast did not appear

Counsel for Michael Williamson: Mr Williamson did not appear

Counsel for Katherine Jackson: Ms Jackson did not appear

Counsel for Peter James Mylan: Mr Mylan did not appear

Counsel for the 5th - 76th and 78th - 87th Respondents in NSD621/2012: These Respondents did not appear

Counsel for the New South Wales Minister for Finance and Services: The New South Wales Minister for Finance and Services did not appear

Counsel for Unions NSW: Unions NSW did not appear

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY fAIR WORK DIVISION NSD 621 of 2012

BETWEEN: CHRISTOPHER PAUL BROWN AND OTHERS NAMED IN THE SCHEDULE

AND: HEALTH SERVICES UNION AND OTHERS NAMED IN THE SCHEDULE

JUDGE: FLICK J DATE OF ORDER: 14 SEPTEMBER 2012 WHERE MADE: SYDNEY (via video link to melbourne)

The time for compliance with paragraph 18 of the Scheme of Administration approved on 21 June 2012 (as varied) is extended to 31 October 2012.
The time for compliance with paragraph 28 of the Scheme of Administration approved on 21 June 2012 (as varied) is extended by a further 60 days. Note: Entry of orders is dealt with in r 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY fair work DIVISION NSD 735 of 2012

AND: NSW MINISTER FOR FINANCE AND SERVICES AND OTHERS NAMED IN THE SCHEDULE

JUDGE: FLICK J DATE OF ORDER: 14 SEPTEMBER 2012 WHERE MADE: SYDNEY (via video link to melbourne)

The time for compliance with paragraph 18 of the Scheme of Administration approved on 21 June 2012 (as varied) is extended to 31 October 2012.
The time for compliance with paragraph 28 of the Scheme of Administration approved on 21 June 2012 (as varied) is extended by a further 60 days. Note: Entry of orders is dealt with in r 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY fAIR WORK DIVISION NSD 621 of 2012

BETWEEN: CHRISTOPHER PAUL BROWN AND OTHERS NAMED IN THE SCHEDULE

AND: HEALTH SERVICES UNION AND OTHERS NAMED IN THE SCHEDULE

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 735 of 2012

AND: NSW MINISTER FOR FINANCE AND SERVICES AND OTHERS NAMED IN THE SCHEDULE

JUDGE: FLICK J DATE: 14 SEPTEMBER 2012 PLACE: SYDNEY (via video link to melbourne)

REASONS FOR JUDGMENT 1 On 21 June 2012 declarations were made in these proceedings pursuant to s 323(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) and s 290B of the Industrial Relations Act 1996 (NSW) in respect to the federally-registered Health Services Union East Branch ('HSU East Branch') and the state-registered HSUeast union ('State Union'): Brown v Health Services Union [2012] FCA 644. Orders were also then made (inter alia) appointing an administrator, the Honourable Michael Moore. Reasons were then given for the conclusion that the federally-registered HSU East Branch and the State Union were dysfunctional. Those reasons addressed the two proceedings which were before the Court. The Applicants in the first matter were Christopher Brown and a number of other members of the federally-registered Health Services Union. The Applicant in the second matter was the state-registered HSUeast union. 2 Approval was given to two identical or substantially identical Schemes of Administration to be administered by the Administrator in relation to each body. One of the orders made on 21 June 2012 reserved liberty to "the Administrator, the Applicants or any person represented in the proceeding" to apply to the Court "in the event of any difficulty arising in the course of the implementation of the Scheme[s]". 3 Since June 2012, and leaving aside the correction of typographical errors in the Schemes as first made, that liberty has been invoked by the Administrator on a number of occasions and approval has been given to the following variations of the Schemes: Date of variation Paragraph varied Variation 14 August 2012 18 Except as provided herein on the Amendment Date, the Administrator shall apportion and distribute the assets and liabilities of the NSW Union and the HSU East Branch to the NSW Union and the demerged Branches having regard to: … Provided that if the Administrator cannot distribute any of the assets, and any liabilities attaching to or encumbering such assets by the Amendment Date the Administrator shall complete such distribution as soon as practicable after the Amendment Date and in any event within 28 days of the Amendment Date unless otherwise permitted by further order of this Court. (Alterations are those underlined) 14 August 2012 24 Paragraph 24 was deleted in its entirety and replaced with: The Administrator shall, on completion of the steps set out in paragraphs 11 to 21 and 23, request the General Manager of Fair Work Australia to arrange for the conduct of the election for all offices in the demerged branches by the Australian Electoral Commission. 30 August 2012 New paragraph 27A inserted A new paragraph was inserted outlining (inter alia) the "powers, functions and duties" of the "Assistant Administrators", James Simmonds and Brian Daley, who were appointed at the same time as the variation was made.

4 Approval is now sought to vary paragraphs 18 and 28 of the Schemes. Paragraph 18 of the Schemes (as amended on 14 August 2012) provides as follows: 18. Except as provided herein on the Amendment Date, the Administrator shall apportion and distribute the assets and liabilities of the NSW Union and the HSU East Branch to the NSW Union and the demerged Branches having regard to: 18.1 the proportion of assets and liabilities that each Branch contributed to the HSU Branch at the Merger Date; 18.2 the proportion of assets and liabilities that each Branch contributed to the NSW Union; 18.3 the respective number of members of each Branch; 18.4 the income and expenses of the HSU East Branch and the NSW Union since the Merger Date; and 18.5 what the Administrator considers is fair, just and appropriate in the circumstances. Provided that if the Administrator cannot distribute any of the assets, and any liabilities attaching to or encumbering such assets by the Amendment Date the Administrator shall complete such distribution as soon as practicable after the Amendment Date and in any event within 28 days of the Amendment Date unless otherwise permitted by further order of this Court. The Administrator seeks an order varying the time for distribution from "within 28 days of the Amendment Date" to "within 60 days of the Amendment date". 5 Paragraph 28 provides as follows: 28. The Administrator shall use his best endeavours to ensure the completion of the administration within 120 days of the date of the Order, or such further time as the Court may allow. The Administrator seeks an order varying the time for the completion of the administration from "within 120 days of the date of the Order" to "within 180 days of the date of the Order". 6 It is considered that the extensions of time sought by the Administrator should be granted, but that these extensions of time should not be granted by way of a variation to the Schemes. No variation of these two paragraphs of the Schemes is necessary. The existing paragraphs expressly empower the Court to extend the time otherwise prescribed.

The Transfer of the Melbourne Property - Para [18] 7 The apportionment required by paragraph [18] of the Schemes was undertaken by the Administrator on 21 August 2012. 8 The time specified in paragraph [18], as amended, expires in mid September 2012. 9 One of the assets that remains be apportioned arises in respect to the transfer of a property in South Melbourne. As explained in the affidavit filed in support of this variation of the Schemes, the sale of that property has involved a number of transactions, namely: (i) Conveyance of the title of the property from the previous trustees who had held the property but had been removed from office by the Orders of the Court of 21 June 2012 to the party that the Administrator believes and has been advised is the appropriate title holder, being the Federal registered Health Services Union; (ii) Obtaining an exemption from ad valorem stamp duty on this transfer from the Victorian Treasury, due to the nature of the transaction being between related parties; (iii) Negotiating an appropriate suite of securities with the Commonwealth Bank of Australia (the banker and finance provider for the State Union and the demerged branches) in relation to mortgages attaching to the South Melbourne property and other properties owned by the State Union arising from the action taken by the Administrator pursuant to Paragraph 18 of the Scheme. That affidavit further deposes to the fact that these steps will not be complete by mid-September 2012 and the belief that they "should be completed in approximately another one month (ie by approximately by mid October 2012)". 10 Approval should be given for an extension of the time for compliance. Rather than granting the extension sought, and in order to avoid possibly a further application to the Court and further costs being incurred, the extension should be granted to 31 October 2012. If the sale is not complete by that date, it may well be expected that the Administrator will call for an explanation.

The Extension of the Period of the Administration - Para [28] 11 The original term of 120 days was a matter addressed in both the reasons provided on 21 June 2012 and, obviously enough, in the provisions of the Schemes as approved: [2012] FCA 644 at [108]. 12 It was then contemplated that the period of 120 days may not be sufficient. It was for that reason that the Schemes contemplated that an application could be made to extend that period. 13 Unless extended, the 120 day period would expire on 19 October 2012. 14 The basis upon which the extension of time is sought is that elections to be conducted by the Australian Electoral Commission to fill the now vacant offices of the demerged branches (and, in effect, the State Union) will not be concluded until 23 November 2012. The Administrator first wrote to the General Manager of Fair Work Australia in late August 2012 requesting that the elections be conducted by the Commission. The Commission advised in early September 2012 that the timetable for those elections would be as follows: Nomination open 7 September 2012 Nominations close 28 September 2012 (noon) Postal Ballot opens 2 November 2012 Postal ballot closes 23 November 2012 (5pm)

15 An affidavit filed in support of the application made for the extension of time sets forth the above chronology and correctly says that it "is impossible to know at this stage exactly how long the AEC would need to count the ballots after 23 November before declaring the results, but at least a few days would be required". 16 Initially, the Administrator sought an extension of 40 days; that was soon revised to seek an extension of 60 days. 17 Approval for an extension should be granted. It is considered prudent to approve the extension of 60 days such that the term originally set at 120 days will now become 180 days.

Conclusions 18 The extensions of time for compliance with the Schemes sought by the Administrator should be granted. These extensions of time should be granted by way of an order of the Court extending time, rather than by a variation to the Schemes.

The Orders in NSD 621/2012 and NSD 735/2012 are: 1. The time for compliance with paragraph 18 of the Scheme of Administration approved on 21 June 2012 (as varied) is extended to 31 October 2012. 2. The time for compliance with paragraph 28 of the Scheme of Administration approved on 21 June 2012 (as varied) is extended by a further 60 days. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

Associate: Dated: 14 September 2012 Schedule No: (P)NSD621 of 2012 Federal Court of Australia District Registry: New South Wales Division: Fair Work Applicants Second Applicant: LLOYD ALBERT WILLIAMS Third Applicant: DANIEL PATRICK HILL Fourth Applicant: ROSEMARY LOUISE KELLY Fifth Applicant: JORGE NAVAS Sixth Applicant: ZITA DARLENE MITCHELL Respondents Second Respondent: HSU EAST Third Respondent: MICHAEL WILLIAMSON Fourth Respondent: KATHERINE JACKSON Fifth Respondent: GERARD HAYES Sixth Respondent: PETER BEATON Seventh Respondent: LEANNE BURNS Eighth Respondent: LEIGH BUSH Ninth Respondent: RAY DUNN Tenth Respondent: GRAHAME EDWARDS Eleventh Respondent: JOHN FITZROY Twelfth Respondent: HELEN GOODLUCK Thirteenth Respondent: BARBARA GRAY Fourteenth Respondent: LYNETTE GUYMER Fifteenth Respondent: SHARALYN HAYNES Sixteenth Respondent: SHARON JONES Seventeenth Respondent: LINDEN MARTIN Eighteenth Respondent: SHARON MCCULLOUGH Nineteenth Respondent: DEBORAH NEUMANN Twentieth Respondent: PAULINE O'NEILL Twenty First Respondent: VICKI RILEY Twenty Second Respondent: BRUCE ROWLING Twenty Third Respondent: LYNNE RUSSELL Twenty Fourth Respondent: ZI ZHENG SHAO Twenty Fifth Respondent: CLARRIE SMITH Twenty Sixth Respondent: MARK STERREY Twenty Seventh Respondent: LYNETTE THOMPSON Twenty Eighth Respondent: DAVE VEALEY Twenty Ninth Respondent: GRAHAM CONROY Thirtieth Respondent: JODIE COWDREY Thirty First Respondent: RODNEY FELTHAM Thirty Second Respondent: LACHLAN GILCHRIST Thirty Third Respondent: CHRISTINE GILCHRIST Thirty Fourth Respondent: CHRISTINE GILKINSON Thirty Fifth Respondent: ZELDA GISLETT Thirty Sixth Respondent: ADAM HALL Thirty Seventh Respondent: ROBERT HULL Thirty Eighth Respondent: ANGELA HUMPHRIES Thirty Ninth Respondent: MONIQUE IRVINE Fortieth Respondent: IRIS KNIGHT Forty First Respondent: KEN MCINTOSH Forty Second Respondent: KIM MULLER Forty Third Respondent: SEAN O'CONNOR Forty Fourth Respondent: MICHAEL O'DONNELL Forty Fifth Respondent: STEPHEN POLLARD Forty Sixth Respondent: JOHN SANTANGELO Forty Seventh Respondent: TIM THORBURN Forty Eighth Respondent: BEV TURELLO Forty Ninth Respondent: MARCO BOLANO Fiftieth Respondent: BRYAN YEATES Fifty First Respondent: TED HINGE Fifty Second Respondent: TERRY AGIUS Fifty Third Respondent: LIA AUGOUSTAKIS Fifty Fourth Respondent: STUART BOWLES Fifty Fifth Respondent: SHANE BRASIER Fifty Sixth Respondent: GINO CATHERINE Fifty Seventh Respondent: BRETT DAVIDSON Fifty Eighth Respondent: REUBEN DIXON Fifty Ninth Respondent: JENNY DUNLOP Sixtieth Respondent: LEONIE FLYNN Sixty First Respondent: JULIE GRAHAM Sixty Second Respondent: JOE GRECH Sixty Third Respondent: MARK HINDSON Sixty Fourth Respondent: PHILIP ADRIAN KERR Sixty Fifth Respondent: LISA MAGNUSSON Sixty Sixth Respondent: MELISSA NENADOVIC Sixty Seventh Respondent: PATRICK O'BRIEN Sixty Eighth Respondent: JIM PAPARAS Sixty Ninth Respondent: LORI SCIDONE Seventieth Respondent: LYN SHEPHERD Seventy First Respondent: STEPHEN SIGISMONDI Seventy Second Respondent: JIMMY VILLANUEVA Seventy Third Respondent: TAMMIE WHEELHOUSE Seventy Fourth Respondent: KATE WILKINSON Seventy Fifth Respondent: STUART MILLER Seventy Sixth Respondent: KERRIE SEYMOUR Seventy Seventh Respondent: PETER JAMES MYLAN Seventy Eighth Respondent: KIM HAZELWOOD Seventy Ninth Respondent: KIM GOODLOCK Eightieth Respondent: SHARON JOSEPH Eighty First Respondent: ALICIA ANSET Eighty Second Respondent: ROBERT BRADLEY Eighty Third Respondent: PETER BRAVIS Eighty Fourth Respondent: MELISSA BUTLER Eighty Fifth Respondent: ANDREW HEWAT Eighty Sixth Respondent: DEIDRE MCINTOSH Eighty Seventh Respondent: ADRIANA VESPUCCI Schedule No: (P)NSD735 of 2012 Federal Court of Australia District Registry: New South Wales Division: Fair Work Second Respondent: MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS Third Respondent: HEALTH SERVICES UNION Fourth Respondent: CHRISTOPHER PAUL BROWN Fifth Respondent: LLOYD ALBERT WILLIAMS Sixth Respondent: DANIEL PATRICK HILL Seventh Respondent: ROSEMARY LOUISE KELLY Eighth Respondent: JORGE NAVAS Ninth Respondent: ZITA DARLENE MITCHELL Tenth Respondent: KATHERINE JACKSON Second Other: MICHAEL FRANCIS MOORE

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