In the matter of the Conciliation and Arbitration Act 1904 and in the matter of an application pursuant to section 171C of the said Act by the Australian Building Construction Employees and Builders Labourers Federation [1978] FCA 26

April, 1975 and a further $4 for the period beginning

the firnt day of September, 1975 AND THE COURT BY MAJO).ITY

having satisfied itself that the order hereinafter appearing would not do substantial injustice to the Organisation or to any member or creditor of the Organisation or to any

person having dealings with the Organisation THE COURT RV

1. That the imposition of the said levy of $8 payable

as to $4 for the period beginning 1 April, 1975 and

as to a further $4 for the period beginning 1 September,

That notwithstanding the validation of the said levy, the continuous financial membership of any member of the Organisation shall not he or be deemed to be interrupted or otherwise affected for any purpose by reason of such person's nonpayment or late payment of the said levies or either of them.

That notwithstanding the validation of the said levy, no person who is or was at any time a member of the Organisation and who has before the date of this Order failed to pay the whole or any part of the said levies or either of them, shall be liable to pay to the Organisation any part of the moneys so unpaid by him and this Order may be pleaded in any Court as a

Leave to apply is reserved to either party on 48 hours

ete Rene anes a mtaceliine at drt tae aetnn eee itatenw nant ironeen en rtererenn an teeth - - - tneenhntetat

This is an application by the Australian Building Construction Employees and Builders Labourers Federation (the Union) pursuant to s.171c of the Conciliation and Arbitration Act ("the Act") for a determination of the question whether an invalidity has occurred in the management ot the organisation and for consequential orders. Mr. M. Einfeld Q.C. and Mr. M. Moore appeared for the Union and Mr. R.J. Turner for Brian Victor Rix. Mr. Rix wes an applicant for an inquiry into an irregularity in a ballot in July, 1977 to which reference is made later in this judgment.

Mr. Rix was served by direction of the Court. He was successful in his application and an order made for a new ballot which has not yet been concluded. He 'among others opposed the levy and the group for a long period denied the legality of the levy and refused to

therefore was at arms length with many of the present

controllers of the union. His attitude as expressed

validation providing nothing was done in it which would affect the position of a candidate who had previously 'been ruled ineligible to contest an election by reason of late payment of the levy. Mr. Rix may fairly be regarded as an opponent of the levy and we attach significance to the attitude he adopted and have had regard to it in the decision in this matter. By direction of the Court, copies of the application were served on each branch of the union. In addition, by direction of the Court, an advertisement in the following terms was inserted in a metropolitan daily circulating in each of the capital cities of States where there were branches and a daily newspaper circulating in Newcastle and Canberra:

"AUSTRALIAN BUILDING CONSTRUCTION EMPLOYEES AND BUILDERS LABOURERS FEDERATION

An application for validation of the levy imposed in April and September, 1975 will be heard by the Federat Court of Australia at Law Courts Building, Sydney on Thursday, 9th March, 1978 at 10.15 a.m. Copies of the application may be inspected at the

Se aateteeteatel office of the Union or at the Registry of the court.

In addition, by direction of the Court, the branches were advised when the hearing was ad'journed

and notice given to them of the date, time and place

of the adjourned hearing. The decision of the Court

_'that the levy had been invalidly imposed was widely

circulated and indeed appears to have been reported to branch meetings. It is, we think, of significance that no members or group of members sought to appear on the hearing. The evidence before us consisted of two affidavits of Mr. Wallace, Federal Treasurer and Victorian Assistant Secretary of the Union. In addition, minutes of various branches relating to the endorsement and documentary evidence of samples of pamphlets advising members of tae levy were before us. In this case the affidavit contained material which was clearly hearsay evidence, bat the Court admitted the affidavits. Our action in so doing was affected

by the circumstances of the particular case and it should not be assumed that hearsay evidence will be admittzd in all cases. Having admitted the hearsay evidence, we think it clear that it has probative value (Walker v. Walker 57 C.L.R. 630) and we have so treated it.

The Union is now an organisation of employees registered under the Act. Prior to 27 June, 1974 the Union had been registered as an organisation of employ- ees but on that date the Australian Industrial Court Geregistered it. It then continued as an association until 1976 when it sought and was eventually, on 7 October, 1976, granted registration as an organisation.

application arises from the manner in which that levy was imposed. The imposition of the levy took place while the Union was an association before it was reg- istered as an organisation but the section clearly extends to an association in those circumstances.

The validity of the imposition of the levy came before the Court in January of this year ina judgment given by J.B. Sweeney J. on 23 January, 1978 in an inguiry into an election for offices in the union in July of 1977. The relevant rules provided that the federal Council had power to impose a levy. They further provided that if the Federal Council adopted a resolution which had not appeared on the agenda puper for the Federal Council circulated as require@ to the branches then the resolution could take effect only after endorsement by a majority of the branches. The resolution imposing the levy which had not appeared on the agenda paper was carried

unanimously by the Federal Council and thereafter was

considered in various ways by six of the seven branches.

On an examination of the facts however the Court found

' in the case referred to that only two branches had

endorsed the resolution, four others had considered

it in various ways but had neither endorsed nor rejected

then found that the levy had not been validly imposed.

The levy was one of $4 for each of two periods ending in 3l March, 1976. 'The effect of non-payment of the levy was that members became unfinancial and rem- ained unfinancial until the levy was paid. Unfinancial members are deprived of some benefits under the rules of the Union, including the right to nominate for office and to vote at elections.

In the application now before us, the con- clusions reached by J.B. Sweeney J. have been accepted and indeed the invalidity rel.ed on is the failure 'to comply with the rules in having the Federal Council resolution so endorsed,

The material before us discloses that the Federal Secretary, Mr. N. Gallagher, kept in touch with the branches and sought info~mation from them about the branches' actions relating to the resolution imposing the levy. The endorsement necessary was that of a general meeting of members and meetings appear to have taken place monthly. By reason of his in- quiries Mr. Gallagher was ultimately informed by each of the State Secretaries that the levy had been en- dorsed by his branch, The officers of the Union appear to have accepted the advices from the State Secretaries and thereafter proceeded to advise members of the levy and to collect. The fact of the levy was widely circulated and was publicised in various pam- phlets and newsletters issued by the branches of the

union. In addition, job meetings were held in a large

number of places at which discussions took place concerning the levy and its purposes. Examples were given to us of some of the publications to which reference has been made and it is clearly not a case where the levy was sought to be hidden from members

or there was anything clandestine in the actions of the officers or committee of manageme it. This is a union where there is each year a considerable turnover of members and on material before us has since 1973 varied between 19 and 31 percent. Ti.e levy was collected Ievom members who were members at any time during the period of its application from 1 april, 1975 to 31 March, 1976, It appears from such material that the vast majority of members at those times have paid the levy. The total amount paid was $173,480.95. It appears that in addi- tion to the members working in the industry at any given time there is a percentage of members who secure employment in some other industry or are unemployed. They do not generally resign from the Union and remain nominal book members. The estimate given us was that almost all persons actively engaged in the industry during the period when the levy was payable had paid it and some proportion unidentifiable of those had since left the industry or become unemployed. Some thousands of new members have joined the organisation

since that time but they have not been required to pay

We accept that this is a case where the officers acted in good faith. It is not a case where there was a defiance of the rules or a determination to govern disregarding the rules. We think that it was part of the duty of Mr. Gallagher as Federal Secretary to examine the actions which had been taken by the branches in the endorsement of the resolution of the Federal Council particularly when such a large sum of money was involved. Had he done this it jvould have been quite clear that in some of the branches, although the matter had been reported on to both com- mittees of management and the members, there had bem no endorsement. There was clearly negligence on the part of Mr. Gallagher, but we do not think that this is conclusive. We are concerned with the interests of the organisation and it should not be penalised for the negligence of an officer.

Considerable problems arise for the Union if the levy is not validated. Very large sums of money have been expended for the purposes of the levy. It was submitted on their behalf that in the circumstances a member who had paid the levy would be entitled to sue the Union to recover it. We do rot find it necessary to determine this question.

In addition, difficulties will arise in the future in determining the amount of contributions owing

by persons who were members during this period and if

the Union, for example, is suing to recover contributions

it may well be that the payments made in respect to the levy must be set off against other amounts due. Either of these events could well mean that a member who defaulted in his obligations under the rules was in a substantially better position than a member who paid and continued to pay contributions in accordance with the rules. If it were necessary for the Union to refund the amount of the levy, very considerable difficulties would arise in doing so. The money has been spent and the Union in the first place would be embarrassed at having to raise an equivalent sum. Machirery difficulties such as loss of address, removal

and failure to notify a change of address would also

Subject to questions of consideration of injustice to members and other persons, we think it a case where a remedy of the position is desirable. Section 171c forms part of a group of sections under Part IXA headed "validatiig Provisions for Organisations". The sections include s.171B validating certain acts done in good faith even though invalid for reasons set out in the section; s.171D providing for the reconstitution of a branch or a part of a branch of an organisation; s.171E providing for certain persons to be treated as members even if not validly admitted and s.171F providing that on the expiration of four years acts done by a collective body of an organisation

shall be deemed to have been done in compliance with

the rules. Section 171G allows certain of the sections to be declared by the Court to be applicable.

It is clear that the group of sections con- stitute an attempt by the legislature to provide methods whereby the legal and effective functioning of organ- isations can be secured and to end the difficulties which have arisen in arbitral jurisdictions where there has been a failure on the part of organisations properly to comply with the rules.

Allen v. Townsend 7 A.L.R. 261. 'he Court there said

give the court a wide jurisdiction to do what justice

and commen sense require to remedy the situation which arises when an invalidity occurs in union management,

the objectives of the Concsi1ation and Arbitration Act. 1904-1975 and considerations of fairness

and justice. One of the objectives of the Act, underlined by the enactment of Part IXA therectf, is the encouragement of the effective managemctnt of registered organisations in matters within their legitimate competence.

Wrere it is just and reasonable so to do they should be relieved from frustrations which arise merely from the failure in the observance of some formal requirement." This latter passage we would emphasise does not in any way limit the jurisdiction of the Court to

cases where there has been a mere failure in the observ-

ance of some formal requirement. It is trite law that

the Australian arbitration system depends on the exist- ence and functioning of organisations and the objects of the Conciliation and Arbitration Act set out in s.2 emphasise this. Conciliation and arbitration set out

as objects in s.2(b) and s.2(c) are impossible unless

there are functioning representative bodies of employees

and objects 2(e) and 2(f£) emphasise the importance of

the encouragement of these bodies and their democratic \

In considering whethe: it is appropriate to exercise the wide jurisdiction given to us, we must Clearly have regard to the objects of the Act. We arc satisfied that orders made with a view to enabling an organisation to function and operate effectively and legally will assist in achieving these objects and it will be appropriate to make such an order if the Court can satisfy itself thet such an order would

not do substantial injustice to the organisation or

to any member or creditor of the organisation or to

In the circumstances of this case we think it is necessary only to consider the position of members. No creditor would be prejudiced in any way nor does there appear to be any person having dealings with the organisation who would be affected by the

The orders sought ultimately were in the following terms:

1. That the imposition and collection of each of the said levies be and the same is hereby validated.

2. That notwithstanding the validation of the said levy, the continuous financial member- ship of any member of the organisation shall not be or be deemed to be interrupted or otherwise affected for any purpose by reason of such person's non-payment or late payment of the said levies or either of them.

3. That notwithstanding the validation of the said levy no person wno is or was at any time a member of the organisation and who has before the date of this order failed to pay the whole or any part of the said levies or either of them, shall be liable to pay to the organisation any part of the moneys so unpaid by him and this order may be pleaded in any court as a defence to any claim for such moneys.

The effect of such orders will be that pursuant to Order (2) there will be no interruption to the con- tinuous financial membership of any member and by reason of Ordec (3) that no member pas: or present who has not paid the levy will be required in the future to do so.

_It seems to us that if these orders are made no injustice can possibly occur to any member.

A further consideration is whether it lies within the power of the Union to correct the problems which have arisen itself without recourse to s.171lc.

It is true that as from November, 1978 s.171B may afford

an answer to any allegation of invalidity, but we can

We think it clear that, just as a rule may not impose a retrospective obligation to pay contribu- tions, so a levy may not be imposed retrospectively and that the rule dealing with levies does not authorise the imposition now of a levy for the period 1 April,

1975 to 31 March, 1976. Any attempt then to impose the levy now would fail. The most that could be done would be to impose a levy in the same amount payable in the future and to exempt from payment all those persons who had already paid it. This however seems a clumsy method and would leave unsolved the position of the persons who were members during the period of collection of the levy whether they paid the levy or not and whether they are still members of the Union or not.

Since we are of the view that it is not clearlv within the power of the Union to correct the problem and being satisfied that no substantial injustice would be caused to the members by the making of the Order, we make

OR ae A ne i NE Re SA oh Dm an en naa SA hen in een nn tb estate nena

IN THE FEDERAL COURT OF AUSTRALIA N. S. W. No. 4 of 1978 INDUSTRIAL DIVISION

IN THE MATTER OF THE CONCILIATION ARBITRATION ACT 190

IN THE MATTER OF THE AUSTRALTA™ BUILDING CONSTRUCTION E-:PLOYER*.

an organisation of employees register under the said Act

THE AUSTRALIAN BUILDING CONSTRUCTION EMPLOY &ES AND BUILDERS LABOURERS FEDERATION = - - SOSOSOCSSS

{This is an application for an order under s. 171 C of the Conciliation and Arbitration Act (the Act). As I am unable to agree with the decision of the Court I shall confine myself to setting out the reasons why, in my view, the material at present before the Court does not justify the making of the orders sought. It will be necessary to briefly explain how the application was heard on two occasions.

This matter initially came before the Court on 9 March 1978 (the earlier hearing) when Mr. Einfeld Q.C.

appeared with Mr. M. Moore for the applicant Federation.

Mr. Turner announced an appearance for Brian Victor Rix, who was an applicant in proceedings under s. 159 of the Act (the 8. 159 proceedings) in which judgment was given by J. B. Sweeney on 23 January 1978. Mr. Turner stated that his client's interes was only to 'ensure that any order made by the Court in the presen: matter would not affect the rulingin the s. 159 proceedings and that he intended to make no submissions in relation to this matter. After asking to be excused from further attendance, Mr. Turner remained in attendance throughout the hearing but took no active part in the hearing by way of calling evidence, cross-examination or address, nor did he take any objection in respect of any of the material' placed before the Court. Section 171 C was inserted in the Act in 1974. In Rv. Joske (1976) 10 A.L.R. 385 Mason and Murphy JJ. said (at p. 400) :- we... it is for the court to develop and elaborate criteria regulating the discretion, having reg:rd to the benefits which may be expected to flow from the making of an order under sub-s. (2)(a) and the impact which such an order will have on the interests of persons who may be affected." As those criteria have not yet been developed, Mr. Einfeld was asked at the earlier hearing to put submissions as to what were the proper criteria in dealing with an application under s. 171 C. He stated that he would do so but on the resumed hearing said that he had decided not to make any such submissions. "As the Court has heard no argument from the applicant or from any other person as to the proper criteria to be

applied, I have not formed any concluded views as to what

criteria are appropriate in considering an application under

s. 171 C. Prima facie it would appear that in order to obtain an order under the section an applicant has to do more than merely show that (a) an invalidity exists, and (b)"such an order would not do substantial injustice to the organisation or to any member or creditor of the organisation or to any person having dealings with the organisation." The section appears to contemplate that in some cases the order may do some (less than substantial) injustice to members or other persons and presumably the Court, before making an order which might have such an effect, would need to be persuaded that some good reason existed for making the order. Again, prima facie, it would appear that the Court would not make any such order unless satisfied (1) that the invalidity in question was not due to any defiance of the requirements of the rules by the officers concerned and (2) that those officers have acted bona fid? in all material respects.

In the absence of any argument as to the appropriate criteria, I shall simply consider whether the evidence presented on behalf of the applicant has established the case which the applicant itself sought to make. The way in which the case for the applicant was put was stated by Mr. Einfeld as follows :-

--Secretaries, communicated to Mr. Gallagher and to others, that the Branch had endorsed the resolution

At the initial hearing Mr. Einfeld relied on the affidavit of Norman Alexander Wallace, affirmed 27 February 1978.

The applicant accepted and also sought to rely upon the findings

in the reasons for judgment in the s. 159 proceedings. However it was pointed out from the bench that, whilst he could rely upon the findings in the reasons for judgment in so far as

they were findings against the present applicant (e.g. to establish the existence of the invalidity as part of its case), he should place before the Court properly admissible evidence, such as the minutes of various meetings, in order to establish any necessary facts in the presert proceedings instead of seeking to rely upon findings in the s. 159 proceedings which were in favour of the present applicant. At the same time it was indicated to Mr. Einfeld that the fact that his application was virtually uncontested (and 'as a result objections to the admissibility of evidate were unlikely) did not relieve the Court of its responsibilities under the Act.

Members of the Court also drew Mr. Einfeld's attention to various matters requiring evidence. For example at the earlier hearing J. B. Sweeney J. said :-

In an apparent attempt to supply this information a further affidavit by Norman Alexander Wallace, affirmed and filed on the day of the resumed hearing, stated (but on a hearsay basis) that the rule in the s. 159 proceeding had been reported to members at Branch meetings but had "not been the subject of

discussion at Branch Meetings in any other context other than

in Queensland .. .". The affidavit then quoted part of the

minute of the General Meeting of members of the Queensland

Branch on 7 February 1978 which extract included the following :- "Brother T. Smith asked what was the situation regarding the Federal Levy, the Secretary replied and said that his opinion, the decision of the Judge, has been that as 1t was an administrative error and application should be made, and the court would make it legal" (sic).

It should perhaps be mentioned that the last three lines cf the

portion of the minutes set out above cannot be reconciled with

the following passage from the reasons for judgment of

J. B. Sweeney J. in the s. 159 proceedings (at p. 25) :-+ "A further question seams to me to arise whethei it would be appropriate for action to be taken under s. 171 in respect of the levy. I have formed no opinion as' to this, either as to my jurisdiction so to do or the propriety."

Another matter raised from the bench at the earlier hearing was the need for proper evidence that the members of the Federal Council had a belief shat the resolution imposing the levy "was subsequently endorsed at general meetings of the Victoriar, South Australian, Western Australian, Queensland, Tasmanian and A.C.T. Branches of the Federation" as claimed in paragraph 11 of the affidavit of Norman Alexander Wallace atfirmec 27 February 1978. On this aspect it was pointed out to Mr. Einfeld from the bench that the material in the affidaw't was hearsay. It was also pointed out that the Court should know what was the basis of the alleged belief, i.e. the detailed facts which it was claimed had led to the alleged belief.

Mr. Einfeld replied "Certainly we can fill that out" and a

little later agreed that he would need evidence as to "the

bona fide of the federal council in acting on the belief that

there was an endorsement (i.e. of the levy by the Branches)

In these circumstances Mr. Einfeld applied for an adjournment of one week to enable him to have prepared "all this material". That adjournment was granted. The hearing resumed on 16 March 1978 when Mr. Einfeld tendered a further affidavit of Norman Alexander Wallace, sworn that day (the later affidavit) together with a number of exhibits thereto including minutes of various meetings. However, despite the fact that counsel's attention had already been

drawn one week earlier to the need for admissible evidence

(as distinct from hearsay), in my view the later affidavit upon which Mr. Einfeld sought to rely failed to supply the necessary evidence on a proper basis.

The normal way of placing such evidence before tne Court would have been by filing an affidavit by each member of the Federsl Council (a) stating what his belief was at the material time as to whether a majority of the Branches had endorsed the Federal Council decision on the levy, and (b) setting out the information known to him at that time upon which his belief was based. This was the course followec in respect of Norman Alexander Wallace (paragraphs 13 and 14 of his later affidavit) but was not done in respect of any of the other members of Federal Council.

Instead of such affidavits being prepared and frled during the week's adjournment, the curious course followed was that the Federal Management Committee on 15 March 1978 carried a resolution which, inter alia, endorsed as "true and correct" paragraph 11 of the earlier affidavit containing the inadmissible

evidence which Mr. Einfeld at the earlier hearing had already

eo erate ere nine RON ee ae eae et eel Recreate emer

hearsay is "true and correct" does not meet the difficulty -

it is a mere assertion unsupported by oral evidence or affidavit.

N. Gallagher, V. Dobinson, W. Morgan, K. Reynolds, R. Owens, N. Wallace, S. Black and P. O'Dea refers to its previous resolution to seek validation under s. 171 C of the Conciliation

and Arbitration Act of the imposition and collection of the Federal Rehabilitation levy

of $8 being made up of two $4 levies for the six monthly terms commencing 1st April, 1975 and 1st October, 1975. Federal Management Committee ratifies and declares that application is made

by the Australian Building Construction Employces and Builders Labourers' Federatzon under s. 4171 C of the Act to seek 'such validation and related orders. Federal Management Committee ratifies, endorses and adopts the action of the Federal Treasurer in making the affidavit filed in the said proceedings and sworn by him on the 27th February, 1978. In particular the Federal Management Committee endorses as true and correct (and in accord with the recollection and belie*s of those four firstnamed of its members who weze members both of the Federal Council and the Federal Management Committee) paragraph 11 of

'It was at all material times believed by the Federal Council of the Federation that tre resolution referred to 1n paragraph 9 of

this my affidavit was subsequently endorsed at general meetings of the Victorian, Sout1 Australian, Western Australian, Queenslard, Tasmanian, and A.C.T. Branches of the Fedsration. Consequently, steps were taken through the Branches to collect each instalment of the said levy, and it was 1n fact collected from almost all of the members of the Federation who were in active employment as builders labourers between April 1975 and June 1976'.

affidavits and give such evidence in the proccedinzs on behalf of the Australian Building Construcv1on Employees and Builders Labourers! Federation a3 1s necessary to place relevant evidence before the Court"

As I have indicated, the resolution is no evidence at

all as to what each member of Federal Council believed. Further,

it says nothing whatever as to the information known to each member of Federal Council and upon which such belief (if held) was based. In view of what had been said at the earlier hearing and in view of the adjournment of the matter for one week at Mr. Einfeld's request to enable him to put the matter in order, 4 find it most surprising that this course should have been followed instead of filing further affidavits or calling witnesses. \

One possible explanation of the course followed is that the members of Federal Council (other than the depenent Wallace) were not prepared to give evidence (a) that at the material time they believed that tie levy had been endorsed by General Meetings of a majority of the Branches, and (b) setting out the information known to them at the time and uron which any such belief was based. No alternative explanation of the failure to place such evidence before the Court was offered either by counsel or by Norman Alexander Wallace who gave oral evidence in the proceedings. Accordingly I am left withcut admissible evidence from those persons who know the facts on a matter central to the very way in which the case was put for the applicant.

Paragraph 14 of the later affidavit of Norman Alexander Wallace deposes to his sincere belief that the resolution imposing the levy "had been endorsed by all the Branches with the exception of New South Wales" and I accept his evidence as to his belief but that belief was expressly

based upon a statement to him by "N. Gallagher, General

Secretary of the Federation that he spoke to all State Secretaries after their respective Branch meetings following the imposition of the levy and each of the State Secretaries informed Mr. Gallagher that the levy had been endorsed by his Branch". The affidavit as to the statement by N. Gallagher to the deponent Wallace is admissible evidence of the basis foi the belief by Wallace.

However, it is not admissible evidence as to the truth of the contents of the statcment by N. Gallagher to the deponent, i.e. it is not admissible evidence (i) that N. Gallagher "spoke to all State Secretaries after their respective Branch meetings" or:(ii) that "each of the State Secretarics informed Mr. Gallagher that the levy had been endorsed by his Branch", Further, there is no material at all before the Court (even inadmissible evidence) as to what the General Secretary himself believed.

There is no admissible evidence from any source that the General Secretary was ever told by each State Secretary that a General Meeting of the Branch had "endorsed" the levy purportedly imposed by the Federal Council. After the adjournment to enable the necessary material to be properly presented before the Court the only material on this issue put before the Court was hearsay. Further, it is not inherentiy probable that any such belief was held by each State Secretary in respect of the Branches in New South Wales, South Australia, Western Australia, Tasmania and the Australian Capital Territory. No meeting was held of the New South Wales Branch and in the other four Branches the members in general meeting not only did not endorse the levy (as found in the s. 159 proceedings)

but, on the material now before the Court, may well have bcen

unaware that they had the right to even consider whether to endorse the levy or not. As J. B. Sweeney J. said in his judgment (p. 16) in the s. 159 proceedings, the resolution of the South Australian General Meeting was consistent with various possibilities including "a belief that the Branch and its member were bound by the decision and had no right to confirm or otherwise". It may be that the General Meetings in the other three Branches similarly believed that they "were bound by the (Federal Council) decision and had no right to confirm or otherwise", This possibility cannot be ignored on the present state of the material before the Court as there is evidence of the way in which the members were misled in the two Branches (Victoria and Queensland) which were held in the s. 159 proceedings to have endorsed the levy at a General Meeting -

In Victoria, where Mr. Gallagher the General Secretary was also State Secretary, a newsletter authorised by Mr. Callagh could only have misled them into believing that the levy nad already peen authoritatively decided upon. The newslet*er, issued on behalf of the Victorian Branch before the General Meeting scheduled for 10 December 1974, said :-

'to recover some of the exnense involved. This Levy applies to all Federation members".

It will be seen that the newsletter referred to the matter of

the levy as having been "decided" and further stated that "This

Levy applies to all Federation members". This statement in my view is misleading in that it would be likely to lead the members to believe that they were bound by the decision of Federal Council and had no right to confirm or reject it.

In Queensland an attempt at a General Meeting to rescind the endorsement was ruled out of order by the Chairman on the express basis that "the Fedvral Management Committee had the right to impose levies under Rule 8", The relevart

minutes show that at the Queensland General Meeting on 28 January 1975 there was

"put forward a further notice of motion that this meeting rescind the '8.00 lcvy imposed by the Federal Management Committee and endorsed by this

both of these motions would be dealt with at the next general meeting".

At the next general meeting (on 25 February 1975) when that notice of motion was reached the Chairman ruled the notice ~f motion out of order in the passage which I have just quotec. A motion of dissent from the Chairman's ruling was moved and defeated. At the next Queensland General Meeting on 25 March 1975 there was a further attempt to raise the question of the Federal levy. It was -

been previously dealt with on a number of occasions

The Court does not know whether the General Secretary was ever informed by the Queensland Branch Secretary or any other Queensland Branch official of the notice of motion given at the

o General Meeting on 28 January 1975 that the levy resolution should

rescinded. The absence of any evidence as to whether this was

known to the General Secretary is material because he sent to all Branches (by letter dated 6 February 1975) an "open letter to all members of the Federation". That letter included the following passage s-

If at the time of sending the letter the Geners Secretary had knowledge of the Queensland notice of motion then such an open letter would appear to have been misleading but there is no evidence on this aspect - another illusvration of the unfortunate dearth of evidence. Two persons know what conversations (if any) the Queensland State Secretary had with the General Secretary on the subject of whether the "evy had been 2ndorsed by a General Meeting of the Queensland Branch. They are the Queensland State Secretary and the General Secretary and no oral evidence or affidavit from either was placed before the Court.

Further material as to the misleading of the members is that the Branches to wnom the General Secretary's open letter was sent apparently included the A.C.T. Branch in which, at a General Meeting on 25 February 1975, there was an unsuccessful attempt to have the matter of the levy circulated to the members. A motion was moved and seconded that "the question of a $4.00 subscription rehabilitation levy

be circulated to all B.L. in A.C.T. and discussed on a next

General Meeting". That motion was lost. It is atleast

possible that the members of the A.C.T. Branch at that meeting were misled by the General Secretary's open letter into accepting his misstatement that "This has been endorsed by all states at their general monthly meetings, and applies to all members of the Federation. The levy will last for two terms". Any such belief might well have discouraged members from voting in favour of the motion that "the question of a $4.00 subscriptior. rehabilitation levy be circulated to all B.L. in A.C.T. and discussed on a next general meeting".

The open letter to members from the General Secretary, dated 4 February 1975, to which T have referred was quite wrong in asserting that the levy "has been endorsed by all states at the general monthly meetings, and applies to all members of the Federation. The levy will last for two terms". Further, there is co evidence at all before the Court that at that time - or at any other time - the General Secretary believed that statement to be true. This was not an error in an unimpocant matter. It went directly to the financial obligations of members and that in turn affected the rights of members under the rules including the right to stand for office. The importance of the matter is illustrated by the fact that in the s. 159 proceedings it was submitted on behalf of the Federation "that the nomination of B. V. Rix was invalid because Rix and his two nominators were not financial members of the Federation" by reason of their failure to pay the levy now under consideration.

way in which a levy may be imposed are of very considerable

importance. They are plainly consistent with the general policy of the rules of vesting the supreme control of the Federation - both in general and particularly in money matters - in the members. I adopt what was said by

J. B. Sweeney J. in his reasons for judgment in the s. 159 proceedings (at pp. 4 - 5 of the typed copy) :-

is vested in the members of the union. Subject thereto, that supreme control is to be exercised

on behalf of the members by the Federal Council, which has very important general powers in add341io0n to the specific power to impose levies in Rule €(m).. » - . . Agenda papers are to be prepared and stbmittec to the Council. Each branch of the Federat'on

rules then provide that delegates to the Federa Council must vote in accordance with the instructions of their branch on all matters contained in the agenda paper.

did not appear on the agenda paper and hence a resolution of the Federal Council itself would

is placed on Rule 8(4) which reads 'Federal Corrcil, when assembled, may arrive at a decision which is not on the agenda, suci1 decision to be endorsed by the majority of the branches'.

There must then be a d>cision, imposing a levy, reached by the Federal Council when assembled

and such decision must be endorsed by the najority of branches for it to be effective and operate'.

The provisions of Rule 8 are reinforced, as far as the expenditure of money is concerned, by Ruie 16 which as far as material provides as follows :-

2. Before any money 1s passed by the Federal Council or Management Committee for special purposes the proposal to expcnd such sum shill

be placed before the different Branches of the Federation by sending a notice in writing to cach branch secretary, stating the nature and reason

The respective Branch Secretaries shall thereupon convene meetings of their respective

"Branches for the purpose of rejecting or endorsing the said proposal.

Such meeting is to be convened within fourteen (14) days of receipt of the said notice.

; The decision of the majority of the Branches shall be the direction to the Federal Council or Management Committee as to the manner in which to act in respect of such proposal.

3. This rule shall not epply to the disbursement of the ordinary expenses connected with or irciiental to the conduct, management, administration of th2 ordinary affairs of the Federation or of the respective Branches thereof".

In addition Federal Rule 25, so far as material, provides as follows :-

"25. Control of Federal Council and Management Committee by members.

In addition to any other method of control of tie Federal Council and the Management Committee by members the following provisions shall be observed :

shall report their activities and proceedings t. members by <-

(c) reporting tc branch meeting followin: Federal Council. The General Secretary shall take sucn

The duties of the General Secretary also include the followirg (Federal Rule 11 (c)):- "(c) He shall conduct and file all corresponderce, 'make minutes of all resolutions passed and other business transacted at any meeting". Mr. Einfeld was asked at the carlicr hearing to

examine "the rules in general" in putting his case to the Court

and his attention was drawn to Rule 25 in particular, but he

failed to do so on the resumed hearing. Looking at the rules

without the benefit of any argument it appears that there was

a duty on the General Secretary to ensure that the Branch

members in the General Meetings of the Branchcs were given the

opportunity to consider the Federal Council resolution as to

the levy with a view to thet matter being decided in accordance

with the views of a majority of the Branches. The later

affidavit exhibits "correspondence ("NW4") between the General

Secretary and the Branch secretaries of the Federation relating

to the levy". On my examination of that correspondence there

is nothing to suggest that the General Secretary took any steps

to ensure that the members in General Meetings of the Braiches

were given that opportunity to confirm or reject the levy.

The statement in paragraph 13 of the later aff:davit is admissible evidence of the information upon which Norman Alexander Wallace based his belief. It is not admissible evidence that the General Secretary in fact "spoke to all State Secretaries after their respective Branch meetings following the imposition of the Levy".

Nor is it admissible evidence that "each of the State

Secretaries informed Mr. Gallaghor that the levy hed

There is no other evidence before the Court that "each of the State Secretaries informed the General Secretary that the levy had been endorsed by his

It would not have been correct for the State Secretaries of any of five Branches (i.e. the Branches other than Victoria and Queensland) to have informed the General Secretary that the levy had been endorsed at a General Meeting of his Branch.

There is no evidence of "a belief formed by the State Secretaries that the Branch had endorsed the resolution and the levy". On the evidence at present before the Court it appears unlikely that the five Branch Secretaries would all have held a belief that a General Meeting of the Branch had endorsed the levy.

There is no evidence that the General Secretary believed that the levy had been endorsed by a majority of the Branches.

each Branch with a view to deciding whether to endorse

be prepared to make any order of validation as sournt.

In any event I do not consider that any sufficient reason has been advanced as to the need for an order under s. 171 C, a matter with which Mr, Einfeld said on the earlicr hearing that he would deal. It is true that 1t was formally ; submitted by Mr. Einfeld "that if this Court does not make a validating order the Federation could be successfully sued for the amounts". However that submission was not advanced as part of the case put by the applicant and was only made in answer ts a specific question from the bench at the end ol Mr. Einfeld's address on the resuned hearing. It was not elaborated upon in any way. , It is unsupported by any evidence that any member or former member is suing or has threatened to sue the Federation for the return of any of the amounts of money in payment of the invalid levy. On the contrary the later affidavit contained the following parasraph:- "31. I have made enquiries among elected offi :1als of the Federation 1n each State and to the besu of my knowledge there have been no legal proccediugs brought against the Feleration or any of its officials, by any menuber of the Federation for refunding of the levy". In his address Mr. Einfeld submitted that "people have pce.c the levy apparently not under protest in any meaningful serise. They have not sought to get it back or sought to have it cet aside".

_, Further, it does not appear to me that any aifficulty will arise by reason of the Federation suing to recover contributions and being met with an attempted set off of the levy payment against other amounts due. I base that view

upon the evidence of Mr. Wallace, the Federal Treasurer of the

"No person has ever been prosecuted for arreurs. It is not our policy .. . It is our policy not to sue",

Accordingly in my viow the material fails to estublis any sufficient reason as to why an order should be made and, as I have already said, in the absence of argument on the matter, I am disposed to the view that an applicart under 8. 171 C has to satisfy the Court not merely that an inytiid.ty has occurred and that an order would not do substantial injustice within the meaning of the section but also that there is some good reason why an order should be made.

In my view the application should be adjourned on the ground that the applicant has failed to make out a ccse but leaving it open to the applicant to have the matter :c- listed for further hearing if it desires to place further material tefore the Court.

In the circumstances °" do not express any opin.ca as to whether orders in the form sought are within the Court's

power and, if so, whether they are appropriate orders to mek