Clay Brick & Paver Association of New South Wales [2011] NSWIRComm 110

Judgment 1The Clay Brick and Paver Association of New South Wales is a State Industrial organisation of employers whose registration is governed by the terms of the Industrial Relations Act 1996. In May 2011 the Executive Officer of the Association, Ms Elizabeth McIntyre, applied for orders under s 287 and s 288 of the Act to the effect that a declaration should be made that an invalidity had occurred in the management of the Association from March 2004 until May 2010 in relation to elections for office bearers. Orders were sought pursuant to the provisions of s 288(3) rectifying the invalidity in the election of officers and to validate any act, matter or thing rendered invalid by or because of that invalidity. The Court ultimately was not asked to take any action under s 287. 2The evidence before the Court establishes that, at the time of hearing, the Association was constituted by three members being employer partnerships or corporations in accordance with r 5(a) of the registered rules. The Registry files indicate that, during the relevant period, there were up to five members. Pursuant to r 5(a), the management of the affairs of the Association was vested in a Committee of Management that in turn consisted of nominated representatives from each of the members of the Association. The Committee of Management had full power and authority to act in the name of and on behalf of the Association. Rule 5 dealt with the management of the Association and at all relevant times r 5(c) was in the following terms: From the Committee of Management, Office Bearers shall be elected in accordance with the provisions of the Industrial Relations Act. The Office Bearers shall consist of - President Two Vice-Presidents Nominations of candidates for Office Bearers shall be made in writing, signed by the nominator and the seconder who shall be members of the Committee of Management. 3The application was supported by two affidavits, the first sworn by Ms McIntyre as the Executive Officer of the organisation and the second, sworn by Ms Dorota Bryks, a solicitor employed by the firm acting for the Association in these proceedings. 4From the documents provided by Ms McIntrye, it appears that the annual elections of office bearers for the period 30 March 2004 to 6 May 2010 were not held in accordance with the rules of the Association. Firstly, during this period, no application had been made to the Industrial Registrar as required by cl 31(2) of the Industrial Relations (General) Regulation 2001 [that in turn continues to apply the provisions of s 444 of the Industrial Relations Act 1991 (repealed)]. Section 444 (1) required that, when an election was to be held, an organisation must apply in writing to the Industrial Registrar requesting the Industrial Registrar to arrange for the conduct of the election in accordance with the rules of the organisation. No such applications to the Industrial Registrar had been made during the period identified in the application. Secondly, it appears from the Minutes of the meetings that, when elections were purportedly conducted, there were no written nominations as required by r 5(c) but oral nominations were taken from those in attendance. Thirdly, the Minutes established that, during the period identified, nominations were called for only one Vice-President when the rule required that nominations be called for two Vice-Presidents. 5It is evident from these facts that an invalidity has occurred in the management of the applicant organisation in the period March 2004 to May 2010 in relation to the election of its office bearers. It is appropriate in those circumstances that, pursuant to the provisions of s 288 of the Act, a declaration should be made that such invalidity had occurred in the management and administration of the applicant organisation during the identified periods. Section 288 empowers the Court, when such an invalidity has been found, to make such order as it considers appropriate and in particular: to rectify the invalidity or cause it to be rectified; to negative, modify or cause to be modified the consequences in law of the invalidity; or validate any act, matter or thing rendered invalid by or because of the invalidity. By s 288(5) the Court must not make an order to rectify, negative or validate any act unless the Court is satisfied that such an order would not do substantial injustice to the organisation or any member or creditor of the organisation or any person having dealings with the organisation. 6In order to establish whether there were persons who might be adversely affected by any validation order as sought in this application, the organisation was directed to place an advertisement in the Public Notices section of a newspaper circulating in Sydney notifying the fact of the application and that copies of it could be obtained from the applicant's solicitors and further indicating that, if anybody had an interest in the matter, they should file a notice of appearance in the Court within 21 days of the advertisement appearing. A further 21 days was given to any such person to file an objection to the orders being sought, including evidence in support of that objection. 7The affidavit of Ms Bryks established that, on 1 June 2011, notice of the application was published in the Sydney Morning Herald indicating that this application had been filed and setting out the directions made by the Court in relation to the filing of any objections. The notice specified the date that the matter was to be heard by the Court and that copies of the application could be obtained from lawyers acting for the applicant organisation. Ms Bryks deposed that, as at 10 August 2011, no person had contacted the applicant's solicitors requesting details of the application: indeed, no objections or evidence in support of objections had been filed at the time of hearing. 8In Ms McIntyre's affidavit it was deposed that, in early April 2011, a letter was sent to all members of the applicant organisation informing them of the application, including its nature and effect. All members were asked to sign a statement attached to that letter recording their decision not to oppose the order should that be their view. The evidence was that the existing members of the applicant organisation had all signed that letter indicating that they did not oppose the application. The applicant has confirmed that although, from time to time there are creditors, they are paid within their trading terms: nor were any other parties able to be identified who might be affected by this application and the orders sought. In light of this evidence, I am satisfied that the making of the orders sought would not do substantial injustice to the organisation, any member or creditor of the organisation or any person having dealings with the organisation. 9In dealing with this application under the provisions of s 288 of the Act, the Court has been guided by the jurisprudence established over a number of years in relation to such applications and has applied the principles most recently and conveniently set out in the judgment of the President, Boland J, in The Master Builders' Association of New South Wales (No 3) [2010] NSWIRComm 39. 10Two further matters require consideration. Firstly, during the course of the hearing it was asserted on behalf of the applicant organisation that the May 2010 election of office bearers was a valid election. A search of the organisation's registry file, however, showed that in March 2010 a certificate of exemption had been granted pursuant to the provisions of s 446 of the Industrial Relations Act 1991 (Repealed) as applied by cl 31 of the Industrial Relations (General) Regulations , permitting the appointment of a returning officer to conduct an election for the office bearers of President and two Vice-Presidents for 2010. There is no evidence that there were nominations called for in writing as required by the rules. Further inspection of the Registry file disclosed no written request for the conduct of an election pursuant to the continued provisions of s 444(1) of the Industrial Relations Act 1991. In any event, such a request would have to be made by the organisation and on the authority of the organisation through the actions, direct or indirect, of the office bearers. At the time that the exemption was granted in 2010 there were no validly elected officer bearers of the applicant organisation who were able to make such an application. The Court raised this possible further invalidity during the course of submissions. It was accepted on behalf of the applicant organisation that, if there was or there was a possibility of such a further invalidity, that invalidity should be rectified in the current proceedings. It seems to the Court, in all the circumstances, that is an appropriate course. 11The second matter concerns the operation of s 286 of the Industrial Relations Act . Under that provision, after four years from the doing of an act by a person purporting to act as a collective body of an organisation and purporting to exercise power conferred by or under the rules of the organisation or acts by a person holding or purporting to hold an office or position in the organisation and purporting to exercise power conferred by or under the rules of the organisation or where there is an election or purported election, the act or election is taken to have been done in compliance with the rules of the organisation. 12A similar provision to s 286 of the Act appeared in the Conciliation and Arbitration Act 1904 (Cth). In relation to this provision, Gray J sitting in the Industrial Division of the Federal Court of Australia, in Geneff v Peterson (1986) 19 IR 40 at 76 referred to the operation of the provision in the following terms: In my view, s 171F, which is a remedial provision, should be allowed a generous area in which to operate. It would be unwise to adopt a narrow construction of the requirement that an act, to be validated, must be done in the purported exercise of the power conferred by or under the rules of an organisation or branch. The purpose of the section is to relieve organisations of the burden of having their past administration examined in minute detail, and involve invalidities having continuing consequences. For these reasons, in most cases, an act done by a purported governing body or purported official will held to fall within the section. 13Adopting the approach of Gray J in Geneff v Peterson , s 286 would operate to validate the purported election of office bearers and their actions in the applicant organisation in the years 2004, 2005 and 2006 but would not operate to validate the 2007 election that was held on 5 December 2007. Operating on the basis that the 2004, 2005 and 2006 elections and actions of the purported officials are validated by the operation of s 286, the orders made by the Court should validate the elections held in 2007, 2008, 2009 and 2010 and actions taken by the purported officials in those years.