INDUSTRIAL LAW - proof of membership of union - whether payment of union dues evidence of intention to become a union member - whether payment of union dues sufficient to attain membership of union - whether payment of union dues must be personally made - whether necessary for person to sign membership application form to become a union member

INDUSTRIAL LAW - interpretation of terms in union rules - meaning to be given to terms "members", "financial members" and "membership" when used in same rule - purpose of rule - whether application of defined meanings creates inconsistency

Workplace Relations Act 1996 (Cth) ss 187A, 195(1)(b) and 209.

Kingham v Ferguson [2001] FCA 537, (2001) 107 IR 403 referred to

Morris v Kanssen [1946] AC 459 referred to

Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited [1942] AC 154 referred to

McLean Bros and Rigg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835 referred to

Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 referred to

Forward v Merchant Service Guild of Australia (1987) 16 FCR 302 followed

Re Porter; Re Transport Workers Union of Australia (1989) 32 IR 87 followed

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833 referred to

Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146 cited

Edgar and Walker v Meade [1916] HCA 70; (1916) 23 CLR 29 referred to

Dawson v Westpac Banking Corporation [1991] HCA 52; (1991) 104 ALR 295 referred to

NZI Securities Australia Ltd v Poignand [1994] FCA 1219; (1994) 51 FCR 584 referred to

Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506 referred to

Fruit & Vegetable Growers Association Ltd v Kekewich [1912] 2 Ch 52 cited

Premier Gold NL v Hampson-Tindale (1994) 12 ACLC 931 cited

Young v Falkirk Football & Athletic Club Ltd (1993) G.W.D. 11-714 referred to

MARTIN KINGHAM, MARTIN O'MALLEY, KEVIN REYNOLDS and GREG SIMCOE v JOHN SUTTON, VIC FITZGERALD, ALBERT LITTLER, BILL OLIVER, LINDSAY FRASER, ALEX BUKARICA, PETER McCLELLAND, TREVOR ZELTNER, PAUL WATERS, ANDREW FERGUSON, WALLY TROHEAR, GARRY HOWCROFT, TONY BENSON, BEN CARSLAKE, JOE McDONALD, GEORGE WASON, TREVOR MELKSHAM and MARGARET BUCHANAN, INDUSTRIAL REGISTRAR

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

MARTIN KINGHAM, MARTIN O'MALLEY, KEVIN REYNOLDS and GREG SIMCOE

JOHN SUTTON, VIC FITZGERALD, ALBERT LITTLER, BILL OLIVER, LINDSAY FRASER, ALEX BUKARICA, PETER McCLELLAND, TREVOR ZELTNER, PAUL WATERS, ANDREW FERGUSON, WALLY TROHEAR, GARRY HOWCROFT, TONY BENSON, BEN CARSLAKE, JOE McDONALD, GEORGE WASON and TREVOR MELKSHAM

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

MARTIN KINGHAM, MARTIN O'MALLEY, KEVIN REYNOLDS and GREG SIMCOE

JOHN SUTTON, VIC FITZGERALD, ALBERT LITTLER, BILL OLIVER, LINDSAY FRASER, ALEX BUKARICA, PETER McCLELLAND, TREVOR ZELTNER, PAUL WATERS, ANDREW FERGUSON, WALLY TROHEAR, GARRY HOWCROFT, TONY BENSON, BEN CARSLAKE, JOE McDONALD, GEORGE WASON and TREVOR

1 This is an appeal from orders made on 20 August 2001 by a judge of the Court (Goldberg J). On that day his Honour discharged interlocutory orders, and a rule to show cause that he had granted to the appellants on 23 March 2001 and amended on 12 April 2001.

2 The rule to show cause was based on s 209 of the Workplace Relations Act 1996 (Cth) ("the Act"). It called upon the first respondents to perform and observe, in specified respects, the rules of the Construction, Forestry, Mining and Energy Union ("the organisation").

3 The appellants seek that the orders made by the primary judge be set aside and, in lieu thereof, it be ordered that the rules be performed and observed in specified respects or, alternatively and pursuant to s 209(7) of the Act, it be declared that certain rules of the organisation contravene s 195 and s 196 of the Act.

4 The litigation before the primary judge arose from an internal dispute in the organisation's Construction and General Division ("the Division"). The Division comprises State based branches. One of the appellants, Martin Kingham, is the secretary of the Victorian Building Unions Branch of the Division. He, and each of the other appellants, is a member of the Divisional Executive of the Division.

5 The first respondents are also members of the Divisional Executive. One of them, John Sutton, is the Secretary of the Division.

6 The second respondent, Margaret Buchanan, is a Deputy Industrial Registrar of the Australian Industrial Relations Commission. She is not under any obligation to perform or observe the rules of the organisation. She was made a party to the proceeding, before the primary judge, in order to enable the appellants to obtain interim relief restraining certification of alterations to the rules of the organisation. Ms Buchanan has not taken an active part in the litigation and did not appear on the appeal.

7 The internal dispute arose out of the fact that, in his role as Divisional Secretary, on 7 March 2001, Mr Sutton sent papers for a postal ballot to members of the Divisional Executive. The ballot concerned a proposal to alter the registered rules of the Division ("the Divisional Rules") in such a manner as to allow elections for Divisional offices to be conducted earlier, in each election year, than currently provided by the rules.

8 The Divisional Rules provide for an election of Divisional office bearers each fourth year. They envisage a one tier collegiate election to be conducted at a biennial meeting of the Divisional Conference. As the rules stood on 7 March 2001, nominations for the 2001 election to Divisional offices would open in late September 2001 and close in mid October 2001. The rule change, if adopted, would have allowed the Divisional Executive to fix an earlier date for the Divisional Conference and the election.

9 In conducting the postal ballot, Mr Sutton relied on rule 26 of the Divisional Rules. This is headed "VOTING OTHER THAN AT MEETINGS", and provides:

"(a) If the Divisional Secretary shall consider it advisable to submit any matter, including the imposition of a levy or the alteration, rescission or making of rules to a vote of Divisional Executive members at any time he may submit a resolution dealing with such matter to the members by letter, facsimile, telephone, telegram, verbally and/or any other means of communication or any combination thereof.

(b) A copy of such resolution shall be sent at the same time to each Divisional Branch Secretary.

(c) The votes on such resolution shall be returnable to the Divisional Secretary at such time as the Divisional President and the Divisional Secretary shall fix. The result of such vote shall be binding and enforceable in the same manner as a decision arrived at in meeting assembled.

(d) No amendment shall be allowed on any such resolution, but if it is negatived any member may request the Divisional Secretary to submit in a like manner a further resolution bearing on the same matter. In the event of the Divisional Secretary being requested to submit more than one such resolution the order in which same shall be submitted shall be in his absolute discretion.

(e) The Divisional Secretary shall keep a register of names and addresses of delegates to Divisional Conference.

(f) Divisional Branch Secretaries shall within fourteen days of the election of delegates to Divisional Conference notify the Divisional Secretary of their names and addresses."

10 Postal ballot papers were forwarded to members of the Divisional Executive on 7 March 2001. The ballot was to remain open until close of business on 14 March 2001.

11 On 9 March 2001, Mr Kingham wrote to Mr Sutton. He objected to the conduct of the ballot and asserted that rule 26 should be used only for urgent matters. However, by 9 March, a majority of the members of the Divisional Executive had returned their ballot papers to Mr Sutton with votes in favour of the proposal. As a consequence, Mr Sutton immediately requested the Industrial Registrar to certify the rule amendments.

12 Before certification could occur, on 12 March 2001, relevant officers wrote to Mr Sutton on behalf of four Divisional Branches, in Queensland, South Australia, Western Australia and Victoria. Each officer advised Mr Sutton of resolutions passed by the writer's Divisional Branch Management Committee calling for a referendum on a proposal that, from and including the elections due in 2001, certain Divisional offices - Divisional President, Divisional Secretary and two Divisional Assistant Secretaries - be filled by a direct secret ballot of all financial members of the Division. The effect of that proposal would be to substitute election to those four offices by an electorate of all eligible financial members of the Division for collegiate election by members of Divisional Conference.

13 On 13 March 2001, Mr Sutton wrote to Mr Kingham asserting the validity of the postal ballot. He also advised Mr Kingham that a Divisional Executive meeting had been called for 21 and 22 March 2001.

14 On 15 March 2001, Mr Kingham wrote to Mr Sutton requesting that the arrangements for the conduct of the referendum be placed on the agenda for the 21 and 22 March 2001 meeting of the Divisional Executive. Also on 15 March 2001, Mr Kingham sought a review by Divisional Conference of the postal ballot decision of the Divisional Executive to change the rules in respect of the timing of elections. The request for review was based on Divisional Rule 8(x)(g) which provides that:

"The Divisional Conference shall have power ...

(g) To confirm, over-rule or otherwise deal with decisions of the Divisional Executive or Divisional Branches of this Division."

15 On 16 March 2001, Goldberg J made an order restraining the members of the Divisional Executive from submitting the postal ballot rule amendments to the Industrial Registrar for certification, or otherwise giving effect to them: see Kingham v Sutton (No V 196 of 2001). Subsequently, the Industrial Registrar indicated she would not certify the rule amendments pending determination of a rule to show cause granted in that proceeding. On 21 March 2001, Goldberg J varied his order in such a manner as to allow the Divisional Executive to consider and, if thought fit, pass resolutions rescinding the resolutions adopted in the postal ballot and to propose similar resolutions at the meeting of 21-22 March.

16 On the first day of its meeting of 21-22 March, the Divisional Executive passed a resolution in the following terms:

"Divisional Executive determines that a meeting of the Divisional Conference is to be brought forward to May 8 or such earlier time as it can be practically organised and that the Divisional Secretary be authorised to take all steps necessary to facilitate such a meeting, including postal ballots of Divisional Executive, and that the Conference in question conduct the elections for Divisional Officer positions."

17 During the course of the meeting, on the afternoon of 21 March 2001, Mr Kingham tabled a petition said to be signed by approximately 8,700 financial members of the organisation. The petition sought a referendum on the subject matter of the resolutions by the four Divisional Branch Management Committees referred to at para 12 above. Goldberg J described what happened next, in para 13 of his reasons for judgment:

"Mr Kingham then moved two motions. The first motion was to establish a referendum committee to supervise the checking of the financial status of the signatories on the petition and to resolve, in the event that the petition was found to be requested by not less than ten per cent of the financial membership, that a referendum of all financial members then be held as soon as possible on the matter the subject of the petition. The second motion stated the question for the referendum and related to practical arrangements to enable the referendum to be held as soon as possible. The question was:

"Should the Divisional Executive of the CFMEU's Construction and General Division forthwith make all necessary rule changes so that, as from and including the elections due in 2001, the offices of Divisional President, Divisional Secretary and the two Divisional Assistant Secretaries must all be filled by direct secret ballot of all the financial members of the Division?"

(This question was in the same terms as the question contained in the resolutions sent by the four Divisional Branches to Mr Sutton on 12 March). As at 28 February 2001, there were 63,858 financial members of the Division and 44,616 unfinancial members of the Division. As at 31 March 2001, there were 66,439 financial members of the Division and 42,347 unfinancial members of the Division."

18 Subsequent developments were also recorded by his Honour:

"14 The motions moved by Mr Kingham were put and lost. A motion was then moved by Mr Sutton in relation to the petition that a request be made to him as the Divisional Secretary to obtain legal advice in relation to the issues raised by the petition, and the Divisional Executive's obligations in relation to it, and that he be instructed to cause an investigation into the signatures on the petition. That motion was passed.

15 On the next day, 22 March, a motion was moved and seconded to rescind the resolutions passed by the postal ballot which had concluded on 14 March, to amend the Divisional Rules to the same effect and to direct the National Secretary, or any other person authorised by him, to seek urgently the certification of the rule amendments. The resolution proposed was in the following terms:

"This Divisional Executive in meeting assembled:

1. Notes that proceedings have been commenced relating to the process of the rule change passed by postal ballot commencing 7 March 2001;

2. Wishes to avoid unnecessary and expensive litigation for no ultimate practical purpose;

3. Notes the amended form of the interim orders of the Court and, in particular, the amendment in effect allowing this Divisional Executive at this meeting to rescind the postal ballot changes and proposing anew those changes at this meeting.

Resolves

4. To rescind the resolutions amending the Divisional Rules adopted by postal ballot conducted by the Divisional Secretary commencing 7 March 2001, AND

5. To amend the Divisional Rules in the following manner:

[Detailed amendments were set out]

Further, the Divisional Executive directs the Divisional Secretary, or any person authorised by him, to seek urgently the certification of the above rule change in order that the Divisional Executive can act to overcome the paralysing effect that the current crisis is having upon the day to day operations of the Division, and to press upon the Industrial Registrar such urgency."

That motion was debated and carried. The effect of the rule amendments was to enable elections for positions on the Divisional Executive to be brought forward to a date earlier in the year.

16. Mr Kingham then moved a motion seeking to have the Divisional Executive resolve that a special Divisional Executive meeting be held within ten days, and that the Divisional Secretary (Mr Sutton) be directed to report the results of checking the national financial membership roll in relation to the petition to establish whether the four branches constituted a majority of the membership and whether the petition had been signed by not less than ten per cent of the financial membership. I take it that the motion was designed to have the petition implemented and carried into effect. That motion was defeated."

19 On 23 March 2001, the present proceeding was commenced. Goldberg J made interlocutory orders restraining the respondents from seeking certification of the rule amendments made at the meeting of the Divisional Executive. Pursuant to s 209, his Honour made a rule to show cause. The rule to show cause, as amended on 12 April 2001, sought the following relief:

"1. An order pursuant to section 209 of the Workplace Relations Act 1996 (Cth) ("the Act") that the First Respondents and each of them perform and observe the Rules ("the Rules") of the Construction Forestry Mining and Energy Union, Construction and General Division ("the Division") by treating as null and void and of no effect the resolution of the Divisional Executive of the Division passed on 21 March 2001 requiring that elections for the offices of Divisional Officers of the Division referred to in Rule 9.2 of the Rules be held at a Divisional Conference of the Division to be held on or before 8 May 2001.

2. An order pursuant to section 209 of the Act that the First Respondents and each of them perform and observe the Rules by forthwith referring for review by a Divisional Conference of the Division the resolutions of the Divisional Executive of the Division passed on 22 March 2001 to amend the Rules in relation to the calling and holding of biennial Divisional Conferences, the holding of elections and the taking up of offices after elections at Divisional Conference, and associated matters, referred to in paragraphs 31 and 32 of Kingham's affidavit ("the rule amendments").

3. An order pursuant to section 209 of the Act that the First Respondents and each of them perform and observe the Rules by refraining, by themselves, their officers, servants or agents, from submitting the rule amendments to the Industrial Registrar for certification, taking any other steps to have the rule amendments certified by the Industrial Registrar, or otherwise giving any effect to the rule amendments, until after the completion of the review by Divisional Conference referred to in order 2 above.

4. An order pursuant to section 209 of the Act that the first of the First Respondents ("Sutton") forthwith make all necessary arrangements for the holding of a referendum of the financial members of the Division as soon as possible on the following question:

'Should the Divisional Executive of the CFMEU's Construction and General Division forthwith make all necessary rule changes so that, as from and including the elections due in 2001, the offices of Divisional President, Divisional Secretary and the two Divisional Assistant Secretaries must all be filled by direct secret ballot of all the financial members of the Division?'

5. An order pursuant to section 209 of the Act that the First Respondents and each of them perform and observe the Rules by refraining from holding the elections for the offices on the Divisional Executive referred to in Rule 9.2 of the Rules which are due in 2001 until after the completion of the referendum referred to in order 4 above.

6. Alternatively, an order pursuant to s 209(7) of the Act that Rule 8(x)(g) and Rule 9.15 of the Rules, or the Rules as a whole, contravene s 195(1)(b)(iv) and s 196(a) of the Act insofar as they do not require the Divisional Executive to refrain from implementing or otherwise giving effect to any of its decisions of which a review by the Divisional Conference has been requested, until the outcome of such review.

7. Alternatively, an order pursuant to s 209(7) of the Act that Rule 8(x)(g) and Rule 9.15 of the Rules, or the Rules as a whole, contravene s 196(c) of the Act insofar as they do not require the Divisional Executive to refrain from implementing or otherwise giving effect to any of its decisions of which a review by the Divisional Conference has been requested, until the outcome of such review. Alternatively, an order pursuant to s 209(7) of the Act that Rule 10.1 of the Rules, or the Rules as a whole, contravene s 195(1)(b)(iv) and s 196(a) of the Act insofar as they**:**

(a) impose a requirement that a referendum may be requested, inter alia, by Divisional Branches representing a majority of members, including unfinancial members, of the Division; and

(b) provide that the referendum will comprise a ballot of all members, including unfinancial members, of the Division.

8. Alternatively, an order pursuant to s 209(7) of the Act that Rule 10.1 of the Rules, or the Rules as a whole, contravene s 196(c) of the Act insofar as they:

(a) impose a requirement that a referendum may be requested, inter alia, by Divisional Branches representing a majority of members, including unfinancial members, of the Division; and

(b) provide that the referendum will comprise a ballot of all members, including unfinancial members, of the Division.

9. Alternatively, an order pursuant to s 209(7) of the Act that Rule 10.1 of the Rules, or the Rules as a whole, contravene s 195(1)(b)(iv) and s 196(a) of the Act and/or s 196(c) of the Act, insofar as they do not require the Divisional Conference, the Divisional Executive, any other committee of the Division, and the members of the Division to refrain from taking any action in relation to the subject matter of a referendum, properly requested under the Rules, that would prevent full effect being given to the matter if the referendum ballot was carried."

20 In late March 2001, Mr Sutton acknowledged the request by Mr Kingham for a review by the Divisional Conference of the Divisional Executive's decision, at the meeting conducted on 21 and 22 March 2001, to make the rule alterations. Mr Sutton attempted to conduct the review by a postal ballot of members of Divisional Conference. However, on 9 May 2001, Goldberg J determined that any such review could be undertaken only at a meeting of Divisional Conference; it could not be undertaken by postal ballot: see Kingham v Ferguson [2001] FCA 537, (2001) 107 IR 403.

21 In late March 2001, the task of checking the signatures on the members' petition was commenced. Mr Sutton instructed Tom Roberts, the National Legal Officer employed by the organisation, to oversee this task. As the primary judge observed at para 26 of his reasons for judgment, "(t)he checking of the signatures on the petition took a considerable time to complete and a report by Mr Roberts to the Divisional Executive was not completed by Mr Roberts until 7 June 2001."

22 At para 31 of his reasons for judgment the primary judge made the following observations about the petition:

"On 7 June 2001, Mr Roberts completed a report to Mr Sutton of the outcome of the inspection of the petition. The respondents claimed that the inspection process established that only 5,257 financial members of the Division had signed the petition as this was the number of financial members for whom membership application forms (or cards) signed by the member had been located in the Union's records. The report disclosed that there were 8,615 signatures on the petition and that 7,376 signatories were verified as being the names of financial members. The parties agreed that adjustments needed to be made to this figure and it was agreed that 6,972 signatories to the petition were shown to be financial members, although application forms for membership could not be located in the Union's records for 1,715 of these signatories. The figure of 5,257 financial members represented 8.2% of the financial membership of the Division as at 26 February 2001 and 7.91% of the financial membership of the Division as at 31 March 2001. The figure of 6,972 financial members represented 10.92% of the financial membership of the Division as at 28 February 2001 and 10.49% of the financial membership of the Division as at 31 March 2001. The applicants had contended that the evidence disclosed that 6,985 signatories to the petition were financial members. The figure of 6,985 financial members represented 10.94% of the Division's financial membership as at 28 February 2001 and 10.51% of the Division's financial membership as at 31 March 2001. The figure of 6,985 financial members does not materially alter the percentage figures derived from the figure of 6,972 financial members. The applicants accepted the figure of 6,972 financial members for the purposes of the proceeding and I use the figure of 6,972 financial members for the purposes of these reasons."

23 At first instance, the parties requested the primary judge to resolve the issues raised by the rule to show cause by answering questions formulated by them. The questions formulated for his Honour's consideration are set out at para 44 of his reasons for judgment. It is not necessary for us to set them out; not all the issues contested before the primary judge were raised on appeal. The issues pertinent to the appeal are addressed below.

24 The appellants' submissions require consideration of two aspects of the Divisional Rules. The first concerns the question whether Divisional Conference has an obligation, as distinct from a power, to review decisions of the Divisional Executive. The second concerns the validity or otherwise of requests made to the Divisional Executive for the conduct of a referendum concerning the method of election of the senior Divisional officers. There were two purported requests: the resolutions of the four Divisional Branch Management Committee and the petition. The efficacy of each of these requests is in dispute.

25 The appellants submitted that Mr Kingham's 15 March 2001 request that Divisional Conference review the Divisional Executive's decision to make rule alterations had the effect of obliging Mr Sutton to call a meeting of Divisional Conference for that purpose; and obliging Divisional Conference to undertake the review.

26 Goldberg J did not agree. He held "the Divisional Conference is not under any duty to undertake a review of the action of the Divisional Executive. It may do so if it so resolves".

27 The appellants contended the primary judge erred in that conclusion. Their counsel referred to rule 9.15 of the Divisional Rules, the opening words of which provide that:

"The Divisional Executive shall, have and may exercise, subject to the review of its actions by Divisional Conference, the care, control, superintendence, management and administration in all respects of the affairs, business, Divisional funds and property of the Division and have and exercise all of the parts of Divisional Conference ..."

28 Counsel for the appellants argued that rule 9.15 gives Divisional Conference jurisdiction to review decisions of the Divisional Executive and, further, that Divisional Conference is obliged to conduct such a review upon request in any particular case. The first respondents do not dispute the former proposition. They do dispute the latter proposition.

29 Counsel for the appellants pointed to the phraseology of National Rule 15(iv). This refers to the National Executive of the organisation having certain powers "unless its actions are overturned by the National Conference". They submitted that Divisional Conference's power to review decisions of the Divisional Executive is a significant element of the control of committees of the Division: see s 195(1)(b)(iv) of the Act and note also s 187A(a).

30 We agree with Goldberg J that Divisional Conference is not obliged to accede to a request to review a decision of the Divisional Executive. Nothing in the Divisional Rules compels the Divisional Conference to conduct a review. We are unassisted by the reference to National Rule 15(iv). That sub-rule merely recognises that any action of National Executive which is overturned by National Conference will have no effect. It does not shed any light on the powers or obligations of the Divisional Conference. If Divisional Conference chooses to conduct a review, and then overturns a decision of the Divisional Executive, that decision, similarly, will be of no effect.

31 Our construction of rule 9.15 does not mean the Divisional Rules lack a mechanism for control of committees. The mechanism is the discretionary power of Divisional Conference to review decisions of the Divisional Executive, and other committees. The interpretation of the rules favoured by the primary judge does not offend either s 187A(a) or s 195(1)(b)(iv) of the Act.

32 As members have no right to insist upon review of decisions of the Divisional Executive, it follows the primary judge was correct in holding there was no implied restraint on the operation of the Divisional Executive's decision to alter the Divisional Rules, pending the requested review being considered by Divisional Conference. In the absence of Divisional Conference having an obligation to conduct a review, there would be no basis for implying a restraint on the power of Divisional Executive to implement a decision it had made.

33 Even if Divisional Conference was under an obligation to conduct a review, we do not think it would be appropriate to read into the Divisional Rules any implication of restraint in implementation. Under the rules, the Divisional Executive has wide powers. Subject to any review by Divisional Conference, it has "the care, control, superintendence, management and administration in all respects of the affairs, business, Divisional funds and property of the Division". The drafters of the rules must have expected the Divisional Executive to make decisions about a wide range of matters. They must have expected some of those decisions would require urgent implementation, if the Division was to operate efficiently. Moreover, delay in implementation might be expected, sometimes, to expose the organisation to financial loss. Against that background, it would be strange if the drafters had intended that a single member could, by a mere request for review, render inoperable a Divisional Executive decision.

34 We agree with a comment of Goldberg J, at para 57 of his reasons for judgment:

"It may well be that there will be decisions which, absent the limitation contended for, will be implemented before the Divisional Conference can decide whether or not to review a decision by the Divisional Executive, but that is a consequence of the particular structure of the rules adopted by the members of the Union. In some circumstances, a stay or restraint on the implementation of a decision of the Divisional Executive may be desirable pending a determination by the Divisional Conference to review the decision, but the fact that such a restraint is desirable is no justification for a court implying such a limitation on the ability of the Divisional Executive to implement its decision, unless the limitation is dictated by the proper construction of the Divisional Rules or relevant provisions of the Act."

35 It was submitted on behalf of the appellants that, if no implied restraint is found in the Divisional Rules, those rules impose conditions on members that are oppressive, unreasonable or unjust, in contravention of s 196(c) of the Act.

36 We do not agree. The lack of implied restraint results from the way the Divisional Rules are drafted. The content of the rules is fundamentally a matter for the organisation, subject to any relevant statutory provisions. We see nothing unjust, unreasonable or oppressive about the absence of an implied restraint on the implementation of a Divisional Executive decision pending a review which Divisional Conference, in its discretion, may or may not decide to undertake.

"(i) On a decision of a majority of Divisional Branches, or Divisional Branches whose membership constitutes a majority of the members of the division or on receipt of a petition signed by not less than 10 per cent of the financial members of the division, Divisional Executive shall take a referendum of the whole of the members of the division upon the matter or matters submitted by the divisional Branches or members. A decision reached by a majority of the actual votes recorded shall be binding on the Divisional conference divisional Executive and the members of the Division.

Divisional Executive may at any time by its own motion take a referendum of the whole of the members of the Division upon any matter it thinks fit.

(ii) The referendum referred to in this rule shall be conducted as follows:

Divisional Executive shall:

(a) Determine the question to be submitted to the members and the form of the ballot paper.

(b) Fix the times for the despatch and return of ballot papers and give the necessary instructions for printing of same.

(c) Appoint a Divisional Returning Officer and Divisional scrutineer in conjunction with Divisional Branch Returning Officers to conduct the ballot.

(d) No material other than that authorised by the divisional Executive shall be enclosed in the envelope in which the ballot paper is posted to the member.

(e) In all other respects the referendum shall be held as nearly as practicable in the manner provided for the holding of elections of Divisional Branch Officers."

38 Goldberg J explained the scheme of rule 10 in this way:

"... Divisional Rule 10 contains two stages at which the nature of the relevant membership of the Division is to be determined or identified. The first stage is a threshold which has to be crossed before a referendum is to be held. The second stage is the actual conduct of the referendum. The first stage requires a sufficient number of members to require a referendum to be held before the Divisional Executive is bound to hold the referendum. That threshold can be achieved in any one of three ways which are specifically identified. The first way is not dependent upon a calculation of numbers of financial members or numbers of all members, financial and unfinancial. It is simply achieved if a majority of Divisional Branches makes the decision that a referendum should be held. The second way the threshold is achieved is by the decision being made by any number of Divisional Branches whose membership (financial and unfinancial) constitutes a majority of the membership (financial and unfinancial) of the Division. The final way by which the threshold is achieved is by an alternative formulation, this time determined by reference to a percentage (ten) of financial members of the Division. Any one of these three groups is regarded as a sufficient support for a matter to be put to the financial members of the Division by way of referendum.

Once this threshold is achieved, then the referendum is to be held, but only of financial members."

39 "Member" and "financial member" are defined in rule 3. "Member" means "a member of the Construction and General Division". "Membership" has a corresponding meaning. The term "financial member" means "any member who has paid all subscriptions, fines, levies and dues in accordance with the rules of the Union and in relation to Construction and General Division is a member of this Division".

40 Not surprisingly, given the project driven nature of the construction industry, the evidence indicates large fluctuations in financial membership of the Division. For example, there was a financial membership difference of about 3,000 between 28 February 2001 and 31 March 2001. The evidence showed some members become unfinancial for significant periods of time, but then become financial or have their subscription arrears waived by their Branch committee.

41 The appellants submitted to Goldberg J, and also to us, that in rule 10(i) the words "members" and "membership" should not be given their defined meaning; rather, they should be read as meaning "financial members" and "financial membership" respectively. The reason for this submission is apparent from para 63 of the reasons of Goldberg J:

"Turning to the first limb of Divisional Rule 10 relied upon by the applicants (a decision of Divisional Branches whose membership constitutes a majority of the members of the Division), it was accepted by the applicants that if a majority of the whole of the membership (financial and unfinancial) was required for the purpose of this rule, the four branches would not have the required number. However, if the majority required was a majority of the financial members, the applicants contended that the four branches did have the required number because, as the branch resolutions were passed on or about 12 March 2001 and delivered to the Divisional Executive on or about that date, the 28 February 2001 figure of 63,858 financial members was the relevant figure for determining whether the four branches had a majority. On that date, the four relevant branches had a majority of the financial membership as follows:

* Victoria - 19,145 financial members

* Queensland Labour - 4,529 financial members

* South Australia - 2,327 financial members

* Western Australia - 6,056 financial members

This leads to a total figure of 32,057 financial members, which is in excess of half of 63,858 financial members."

42 Goldberg J rejected the submission that "members" should be read as "financial members" and "membership" as "financial membership". At para 64 of his reasons he said:

"The appearance of the words `membership', `members of the Division', `financial members of the Division' and `the whole of the members of the Division' in close proximity to each other in the one rule suggests that the different expressions have been deliberately chosen and that any difference in their meaning and connotation has been recognised and taken into account."

43 We agree with his Honour. Prima facie a defined term should be given its defined meaning. That meaning must yield in a case where its application would result in an absurdity, or where it appears from the context, or the policy apparently underlying a document, that the author did not intend the defined meaning to apply. However, we do not think that qualification applies to rule 10(i).

44 The argument to the contrary fastened on two aspects of rule 10(i). The first aspect is that the second way of achieving a referendum obligation (Goldberg J's "threshold") is by decision of "Divisional Branches whose membership constitutes a majority of members of the Division", whereas the third way of achieving that result is by a petition signed by not less than 10 per cent of the financial members of the Division. The second aspect of rule 10(i) is its reference to a referendum of "the whole of the members of the Division", when (it is said) only financial members may vote.

45 In relation to the first aspect, no doubt a different policy might have been adopted. However, the purpose of the three alternative threshold requirements seems to have been to limit the Division's obligation to conduct a referendum to cases where there is evident widespread concern about the issue proposed to be subjected to referendum. That purpose is understandable; referenda are expensive and potentially disruptive. Those responsible for rule 10(i) plainly thought it ought to be regarded as a sufficient indication of concern if a majority of Divisional Branches wished the referendum to be held. However, they appreciated there might be a significant disparity between the numbers of members attached to the various Branches, this presumably reflecting the disparity in the general population of the various States and Territories. So they thought it desirable to allow high-member Divisional Branches to have special influence in relation to the taking of a referendum. This might have been done by reference to their financial membership. However, except in obvious cases, that criterion would have required the Division to analyse the financial status of all members of the Division. That might be a large task. So it is understandable that it may have been thought sufficient to take total membership (financial and non-financial) as a sufficient gauge of relative Branch size. There is no inconsistency between that approach and insistence, in relation to the third alternative, that a petition of a percentage of members as low as 10 per cent should meet the more stringent test of financial membership.

46 The second argument of counsel for the appellants assumes that only financial members may vote in a referendum. Rule 10 does not say this. Rule 10(i) speaks about a "referendum of the whole of the members". The rule makes no distinction between financial and unfinancial members. If there is a relevant distinction, that is because of the operation of rule 10(ii)(e) which applies, "as nearly as practicable", the provisions governing elections of Divisional Branch officers. Those provisions are contained in rule 38. Rule 38(o) says: "All financial members as defined in this rule shall be entitled to vote for all positions". The words "as defined in this rule" take the reader to para (p). That paragraph provides a test of financiality, "as at 30th September in the year of the election", regardless of the member's financial position at the date of the ballot. However, that test cannot sensibly be applied to a referendum, which may occur at any time in the year. In that situation, as it seems to us, the better view is that paras (o) and (p) have no application to referenda; the word "members" should be understood in its defined sense, as a reference to all members, whether financial or unfinancial. That result contrasts with the position applying to national referenda, where the constituency is "the financial membership at the end of the calender month immediately preceding the holding of the referendum": see National rule 20(3). However, it is consistent with the greater tolerance to unfinanciality in relation to Divisional Branch ballots that is evident in Divisional rule 6(2).

47 We concede this greater tolerance is not apparent in the limitation of voting in Divisional Branch referenda to "financial members of the Divisional Branch". On any view, there is some inconsistency between different provisions in the Divisional Rules.

48 As it is not possible to reach a conclusion about this issue that avoids all difficulties and anomalies, the better course is to apply the defined meanings. It cannot be said they provide a result that is absurd or plainly not intended.

49 Our conclusion does not mean the referendum provisions are invalid. The nature and extent of the restrictions placed on unfinancial members is, subject to any specific provision contained in the Act, a matter of choice for the organisation. We do not think it can be argued that a choice, either way, as to whether or not unfinancial members shall be allowed to participate in a referendum, produces a result that is oppressive, unreasonable or unjust.

50 It follows from the foregoing observations that we agree with Goldberg J that the resolution submitted by the four Branches of the Division did not satisfy the second alternative method of triggering a referendum requirement. Although those four Branches had a narrow majority of the financial membership of the Division at 28 February 2001, they were not Branches "whose membership constitutes a majority of the members of the Division".

51 Counsel for the appellants also relied on the third alternative way of satisfying the threshold requirement provided by rule 10(i): "receipt of a petition signed by not less than 10 per cent of the financial members of the Division"." It is common ground that "financial members" here bears its defined meaning. The words refer to members who had paid all outstanding subscriptions, and any other debts, as at the date of the petition.

52 Goldberg J was not satisfied that the petition tabled by Mr Kingham on 21 March 2001 was signed by 10% of the financial members of the Division.

53 There were several steps in his Honour's reasoning. First, he examined Mr Roberts' report, whose conclusions were not in dispute. As stated at para 22 above, it was agreed by the parties that 6,972 of the signatures on the petition purported to be those of people who were established, mainly through Mr Roberts, to have been financial members at the time of the petition. If all those signatures were genuine, the petition was signed by not less than 10 per cent of the financial membership of the Division. This is so whether one took the relevant date as being 28 February 2001 (10.92%) or 31 March 2000 (10.49%). The former date seems preferable, being the end of the month prior to presentation of the petition. However, Mr Roberts had not been able to verify all 6,972 signatures. He did verify 5,257 signatures. Goldberg J was satisfied, by affidavit evidence, about a further 458 signatures. The addition of these figures left Goldberg J satisfied about 5,715 signatures. This was less than 10 per cent of the financial membership at either date.

54 Counsel for the appellants nonetheless submitted the petition was effective to trigger a referendum requirement. Goldberg J disagreed. He said:

"The applicants submitted that I should be encouraged to draw the inference that the signatures of the 1,715 signatories were signed by the persons whose names appeared opposite the signatures because 458 signatories had filed affidavits verifying that they had signed the petition. I am not prepared to draw that inference as there was also evidence that persons were asked to sign the petition without being required to produce any identification. There were also a number of signatures on the petition that were not relied upon by the applicants. There was no evidence that any system had been adopted or followed of verifying that the persons signing the petition were the persons whose names appeared opposite the signatures."

55 Counsel submitted to us that Goldberg J's approach was erroneous: his Honour should have applied the presumption of regularity in respect of the unverified 1,257 signatures. The appellants contended there was no positive evidence of the forging of any financial member's signature and the respondents had adduced no evidence to defeat the presumption of regularity. Alternatively, counsel said, the Court should read the words "signed by not less than 10 per cent of the financial members" as meaning "apparently signed" by that number of members. In support of that contention, counsel pointed to the time that had been required to verify the signatures on the subject petition. They argued that it could not have been intended by the drafters of rule 10 that such an elaborate process would be required. It would inevitably involve considerable delay; sometimes delay in instituting a referendum would defeat its purpose.

56 The first respondents submitted this situation is not covered by the presumption of regularity; anyway there was legitimate concern about the petition. They referred to evidence about how the petition came to be signed, including that signatories were not required to produce their "OK" cards and union membership numbers were, for the most part, later added to the petition by office staff.

57 We do not think the presumption of regularity applies to a case such as this. If it did apply, it would be rebutted, in relation to many sheets of the petition, by their form and the evidence of the circumstances surrounding their execution.

58 The essence of the presumption of regularity is that "official appointments were duly made and that official acts were duly performed"; see G.D Nokes, An Introduction to Evidence, 2nd ed 1956 at 64. The presumption is rebuttable and "may be displaced by a contrary inference from additional facts however established". (see Nokes at 61). A fact such as the lack of a system of checking or verifying the signatures on the petition against the names of financial members supports such a contrary inference.

59 As Wigmore, in Evidence in Trials at Common Law Vol 9, reveals at para 2534, the presumption of regularity is:

"...more often mentioned than enforced; and its scope as a real presumption is indefinite and hardly capable of reduction to rules".

It may be said that most of the instances of its application are found attended by several conditions; first, that the matter is more or less in the past and incapable of easily procured evidence; second, that it involves a mere formality or detail of required procedure in the routine of a litigation or of a public officer's action; third, that it involves to some extent the security of apparently vested rights so that the presumption will serve to prevent an unwholesome uncertainty; and finally, that the circumstances of the particular case add some element of probability."

60 Accepting, for instant purposes, the neutrality of the final consideration and the irrelevance of the second and third considerations, it can be seen that the first is controversial in the appeal. However, the better view is that the issue was capable, and remains capable, of being resolved by evidence which was procured in respect of 458 people who were in the same position as the 1257 whose signatures are in dispute. The 1257 at all material times were financial members of the organisation. The appellants were four State Branch secretaries of the organisation. The vast majority of administrative work associated with the enrolment of members and their continued financial position occurs at the Branch level. If the 458 signatures were capable of verification why not the 1257?

61 Furthermore, as it seems to us, it would have been a simple matter for those who instigated the petition to devise a system whereby signature collectors required signatories to produce their "OK" cards or some other form of identification. The collectors could then have made affidavits to the effect that each signature collected by them was made by a person whose claimed identity corresponded with a specified identity document. As the number of collectors was presumably relatively small, it ought not to have been a large task to assemble affidavits from each of them.

62 The presumption of regularity has a limited place in the area of industrial law to which s 209 of the Act applies. The whole point of an applicant seeking to enforce an obligation on a respondent to perform and observe the rules is to seek that something which should have been done under the rules is in fact done. If the presumption of regularity was applied too readily to this area of the law, it would tend to immunise from challenge anything done under alleged authority.

63 In any event, as Lord Simonds said in Morris v Kanssen [1946] AC 459 at 475:

"It is a rule designed for the protection of those who are entitled to assume, just because they cannot know, that the person with whom they deal has the authority which he claims. This is clearly shown by the fact that the rule cannot be involved if the condition is no longer satisfied, that is, if he who would invoke it is put upon his inquiries. He cannot presume in his own favour that things are rightly done if inquiry that he ought to make would tell him that they were wrongly done."

64 In this case, it is the appellants who seek to invoke the presumption of regularity. They are not people who "cannot know". It was they who organised the petition. It was they who failed to implement a system of checking the identity of those who had signed. It was the appellants who brought forward evidence proving the 458 signatures. No explanation was given as to why they could not do the same with respect to the remaining 1,257 signatures, or some significant proportion of them. As Branch secretaries in the organisation, the appellants are well placed to gather information from the 1,257 financial members whose purported signatures have not yet been verified. The respondents are certainly in no better position to do so.

65 Goldberg J was concerned about these matters. At para 128 he referred to "evidence that persons were asked to sign the petition without being required to produce any identification". He was also concerned about the existence of a number of "joke" signatures on the petition which were not relied upon by the appellants. His Honour said:

"There was no evidence that any system had been adopted or followed of verifying that the persons signing the petition were the persons whose names appeared opposite the signatures."

66 We do not doubt there may be circumstances in which it is appropriate to apply the presumption of regularity to industrial affairs. For the purposes of this appeal, it is not necessary to attempt any general statement about those circumstances. It is sufficient to say it obviously cannot apply to a situation where the evidence demonstrates a lack of regularity.

67 The appellants put an alternative argument, based upon the rule "that the law will presume in favour of honesty and against fraud"; and, in particular, "against the commission of a criminal act": see Broom's Legal Maxims (10th ed, 1939) at 643. As we understand the argument, it is that the affixing of a signature to the petition, being a signature that purports to be that of an actual member of the organisation but is not the signature of that person, is a criminal act; therefore, the law will not assume this to have been done but will, on the contrary, assume the signature to be genuine until the contrary is proved.

68 We do not doubt that, as a general rule, a person is presumed not to be guilty of fraud or wrongdoing until the contrary is proved. In the field of criminal law, this rule is often expressed by the words "presumption of innocence". However, it applies also to civil law, as was pointed out by Lord Wright in Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited [1942] AC 154 at 192. But the rule applies to a charge of fraud or wrongdoing against a particular person. We are not aware of any case in which it has been treated as providing a presumption that no wrongdoing has been carried out by any person.

69 The fundamental rule of our law is that, subject to particular statutory or common law exceptions, the burden of proof rests upon the party who asserts the existence of a particular fact. As the matter is put in Phipson on Evidence (13th ed, 1982) at para 4-05: "where a given allegation, whether affirmative or negative, forms an essential part of a party's case, the proof of such allegation rests on him". This burden was referred to by Viscount Maughan in Joseph Constantine Steamship at 174. But neither the statement of Viscount Maughan or that of Lord Wright was critical to their reasoning. The case was concerned only with a question about the doctrine of frustration of contract. And, as it happens, Viscount Maughan and Lord Wright agreed (and with the other members of the House of Lords) as to the fate of the appeal.

70 Before Goldberg J, it was a critical element of the appellant's case, for the making of orders compelling the respondents to hold a referendum, that Divisional Executive had received "a petition signed by not less than 10 per cent of the financial members of the division". Applying the usual rule, it was therefore incumbent upon the appellants to establish, by proof on the balance of probabilities or by an appropriate admission, that the document received in evidence by Goldberg J, and referred to by everyone as "the petition", was a document that had the characteristic of having been signed by the requisite number of financial members. No allegation of fraud or wrongdoing was being made against a particular person, no particular person's guilt or innocence was at stake. There was no occasion, in our opinion, for invocation of the presumption of innocence.

71 The presumption against fraud was referred to in McLean Bros and Rigg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835. In that case it was alleged that a chairman of a company sent a copy of a special resolution to the Registrar-General, when no such resolution had been passed. Under those circumstances, Griffith CJ (with whom Barton and O'Connor JJ agreed) said:

"The presumption against fraud may also be called in aid. Here was a duty to be performed, on failure to do which the company was liable to a penalty. If the chairman sent a document purporting to be a copy of such a resolution, and it was untrue that such a resolution had been passed, it was a fraud upon the law, whether it could be punished by criminal proceedings or not."

It will be noted this involved the question whether a particular person had committed a fraud against a statute.

72 We turn to counsel's submission that rule 10(i) should be read as if the word "apparently" appeared immediately before the word "signed". We agree that, in some cases, delay may defeat the purpose of the petition. But it is possible to exaggerate the inconvenience of checking the petition. First, a proper system of verifying signatories' identities will substantially reduce the individual checking process. Second, in a case where a petition is apparently signed by a large number of members, it may be immediately obvious that, whatever the extent of execution by unfinancial members, the signatories will comprise at least 10 per cent of the financial membership. In such a case the Divisional Executive might immediately decide to comply with the request of the petition, without tarrying to check the precise number of financial member signatories.

73 It must be remembered that a referendum is a costly process. A threshold of not less than 10 per cent of financial membership is not a high one. It seems reasonable to assume it was intended to be taken literally.

74 A further reason against implying insertion of the word "apparently" is that this introduces a subjective element in determining whether the petition triggers an obligation to hold a referendum. Who is to judge the apparent genuineness of the signatures? Presumably the Divisional Executive in the first instance. However, if the test is that the petition is apparently signed by not less than 10 per cent of financial members, on conventional principles the Court would be entitled to substitute its opinion about apparent execution for that of the Divisional Executive. The Divisional Executive would find its decision overturned, not because it erred in law or in relation to a matter of demonstrable fact but because of a difference of opinion upon a matter of impression. While such a situation may not be unprecedented, it is sufficiently unusual and undesirable to cause us to doubt it was intended by the drafters of the rule.

75 We summarise our opinion in respect of this issue in the following way. The appellants sought an order from the primary judge that the first respondents perform and observe the rules of the Division by conducting a referendum. However, the first respondents were obliged to do this only if they received a valid request for a referendum. Unless the Court is affirmatively satisfied that the petition was signed by not less than 10 per cent of the financial membership, it cannot use the petition as the basis for an order that the first respondents conduct the referendum. The onus lay on the appellants to prove, before the primary judge, that a pre-condition for the obligation to perform and observe the rules was satisfied. They failed to do so. They have not established that the primary judge erred in not finding the pre-condition proved. It follows the Court has no power to grant the relief sought by the appellants.

76 It was further submitted by the appellants that the Divisional Rules provided an implied restraint on the implementation of the Divisional Executive's rule alterations pending the outcome on the referendum. At para 75 of his reasons for judgment, Goldberg J said:

"...there was no provision in Divisional Rule 10 or any other rule which provided for the operation of the Rules of the Union or the Union's activities to be stayed or suspended during the process of the receipt, or following the receipt, of a petition until the question had been determined and implemented. There is little, if any, guidance in the Divisional Rules on this issue."

77 His Honour observed, at para 78, that the limitation contended for by the appellants "has the potential to interfere in a substantial way with the conduct, management and administration of the Division's affairs". He noted that "no limit was placed ... on the scope of the limitation either as to the time at which it would operate or on the subject-matter on which it would operate". At para 80 his Honour rejected the proposition that the rules, absent the implication contended for by the appellants, would be unjust. He commented that the implication "would have the potential to interfere significantly with the administration of the Division's affairs". He did not consider the absence of the implied limitation contended for by the appellants resulted in the Rules breaching any provision of the Act.

78 Given our view about the deficiency of evidence concerning the signatures on the petition, this issue does not presently arise. However, we indicate our agreement with Goldberg J's reasoning and conclusions on this issue.

79 Our conclusion that the evidence before Goldberg J did not show the petition was signed by not less than ten per cent of the financial members of the Division does not mean the Divisional Executive is absolved from further responsibility in relation to it. On the contrary, the Divisional Executive has a responsibility to conclude its investigation into the genuineness of the 1257 signatures whose status was left unclear at the hearing before Goldberg J. If that investigation establishes the genuineness of a sufficient number of those signatures to bring the total of accepted signatures to not less than 6386, (10% of the number of financial members of the Division at the end of February 2001) the Divisional Executive will be under an obligation to hold a referendum on the subject matter of the petition. No doubt the wording of the question would have to take account of the changed circumstances, the 2001 Divisional elections having now occurred. But the question of amendment is not moot; any amendment would affect the next election in 2005. The obligation to conduct a referendum would be enforceable in this Court.

80 By way of a notice of contention, the first respondents raised various complaints in respect of the judgment of the primary judge. They involved the following points:

* Can the subject matter of the proposed referendums be achieved without an alteration to the National Rules?

* Was it permissible for the Divisional Executive to delay the elections which were due to commence with the opening of nominations on 28 September 2001?

* Was it appropriate for the Divisional Executive to treat as financial members persons whose dues were paid by others; for example, their employers?

* Should the failure of the appellants to produce applications for membership forms in respect of the members who purported to make the 1,715 signatures lead to an inference being made against the interests of the appellants?: see Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298.

81 As the appeal fails, in our opinion, it is strictly unnecessary for us to deal with these contentions. It is generally more appropriate to leave issues for consideration in a case where their determination is essential. It is certainly unnecessary to deal with the second listed point, which is agreed now to be moot. Given that Goldberg J was satisfied by evidence that the 1715 named persons were in fact members of the Division (subject, in some cases, to the proper conclusion about the third issue), the fourth point is also moot.

82 However, the first point raises an important issue which may affect future decisions by officers and members of the organisation. As we have had the benefit of full argument on the point, it is preferable for us to deal with it.

83 It was submitted before Goldberg J, on behalf of the first respondents, that the subject matter of the referendum request was not capable of being achieved without an alteration to the National Rules of the organisation. It followed, so the argument ran, that there was no point in conducting the referendum. At para 90 of his reasons, Goldberg J rejected the submission. He said:

"I do not consider that an affirmative answer to the questions proposed in the referendum requires an alteration to the national Rules in order for it to be implemented."

84 Rule 17(iii)(e) of the National Rules provides that:

"Nominations for the position of Divisional Branch delegates of the Divisional Conference shall be called for by the Divisional Branch Returning Officer by notification in the union journal or in one daily newspaper circulating in the capital city in each Branch on or before the last day of August of every fourth (4th) year commencing as on and from the last day of August 1996.

Provided that such advertisement shall clearly indicate that the Divisional Executive and full time Divisional Officers are elected by and from members of the divisional conference, that the members of the Divisional Executive make up the National conference and that National Officers are made up of the principal officers of each Division."

85 Rule 18(ii) of the National Rules provides that:

"Every Divisional Executive shall be elected either:

(b) by direct ballot of the financial members of the Division."

86 Goldberg J observed that rule 17 of the National Rules does not deal with the conduct of elections for Divisional Executive officers. His Honour, correctly in our view, noted that rule 18 made provision for those elections and that the proviso in rule 17 must be read subject to rule 18. His Honour said at para 92 that:

"The inconsistency can only be resolved by construing the proviso as meaning that, if appropriate, the advertisement shall indicate that the Divisional Executive is elected by members of the Divisional Conference."

87 With respect, we agree with that approach and see no reason why National Rule 17 of the national rules requires amendment to enable the referendum question to be a live one of practical significance.

88 We also consider that National Rule 18(ii) does not require amendment for the referendum question to be other than a moot one. If some members of the Divisional Executive are directly elected their method of election is described by National Rule 18(ii)(b). If other members of Divisional Executive are elected by a one tier collegiate system of voting they will be elected by the method described in National Rule 18(ii)(a).

89 We consider for the foregoing reasons that the referendum requested, if held and voted upon in the affirmative, will not be ineffective to alter the method of election for divisional officers. As counsel for the appellants submitted, the Divisional rules govern the election of members of Divisional Executive. So much is clear from the opening words of National Rule 13(iii) which provide that:

"Persons elected as members of a Divisional Executive shall be elected in accordance with the rules of the Division."

90 The third point noted in para 80 above may also be important, having regard to the obligation of the Divisional Executive to continue to consider the petition. So we will deal with it.

91 It will be recalled that Goldberg J was satisfied that the 1,715 persons referred to at para 22 above were financial members. He was not satisfied about the genuineness of the signatures of 1,257 of them. At para 109 of his reasons for judgment, the primary judge held that, in the absence of evidence to the contrary, it could be inferred by the payment of union dues in respect of a person that such payment was made with that person's approval. Counsel for the first respondents challenged this. They submitted that, where union dues were paid by employers, the persons in respect of whom the payments were made did not become members. Counsel relied upon rule 7(v)(a) of the National Rules which requires the completion of a membership application form by a person seeking membership of the organisation. However, the concluding words of that sub-rule qualify that requirement. They provide that:

"For all purposes the payment of union dues in whole or in part shall be taken to be, without limiting the generality of the foregoing, a method by which a person intended to, and did in fact, in some way or other, apply for membership and/or evidences an intention to be or become a member."

92 We consider that rule 7(v)(a) of the National Rules permits a person to attain membership of the organisation, without signing a membership application form, provided that two conditions are satisfied: payment of union dues and an intention by the applicant to become a member. It does not matter who pays the dues. But the person must have intended to become a member. We agree with the following observations of Goldberg J, at para 109 of his reasons:

"... the rules do not deem a person to be a member of the Union in circumstances where the person has not done an act which binds the person to the Rules of the Union. It is a matter of evidence whether a person has bound himself or herself to the Rules of the Union. I consider it appropriate to infer from a payment of union dues to the Union in respect of a person that the payment is made with that person's approval or authority. That inference may be rebutted by evidence to the contrary, but it is for any person who alleges that such payment was made without such approval or authority to lead evidence to that effect."

93 No evidence was placed before the primary judge to rebut the presumption mentioned by Goldberg J.

94 Counsel for the first respondents submitted that National Rule 7 deals only with application for membership, as distinct from the admission to membership; rule 7(i) requiring an application for membership to be forwarded to the appropriate Division. They referred to Rule 30(i)(b) of the Divisional Rules which obliges Branch Committees of Management to consider the relevant forms and decide upon admission to membership. Counsel did not point to any rule which deals with the formal admission to membership of a person who has become a member by virtue of the payment of union dues. We have been unable to locate any such provision. However, the concluding words of National Rule 7(v)(a) must be given effect. They obviate the necessity for a formal admission to membership; otherwise they would serve no purpose. Rules which held "in limbo" applications for membership made by way of payment of dues would be contrary to s 261 of the Act: see Forward v Merchant Service Guild of Australia (1987) 16 FCR 302 at 304.

95 Counsel raised the possibility that a person not eligible to join the organisation would become a member by the payment of contributions. However, that could not occur. It is well settled that a person who is not eligible to join an organisation at the time of an application for membership cannot be admitted to membership: see Re Porter; Re Transport Workers Union of Australia (1989) 32 IR 87 at 94-95 per Gray J.

96 There is no substance in the third point of contention raised by the first respondents.

97 The appropriate order is that the appeal be dismissed.

I certify that the preceding ninety-seven (97) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Wilcox and Marshall.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

MARTIN KINGHAM, MARTIN O'MALLEY, KEVIN REYNOLDS and GREG SIMCOE

JOHN SUTTON, VIC FITZGERALD, ALBERT LITTLER, BILL OLIVER, LINDSAY FRASER, ALEX BUKARICA, PETER McCLELLAND, TREVOR ZELTNER, PAUL WATERS, ANDREW FERGUSON, WALLY TROHEAR, GARRY HOWCROFT, TONY BENSON, BEN CARSLAKE, JOE McDONALD, GEORGE WASON and TREVOR MELKSHAM

98 The background to and history of this matter are dealt with in detail in the judgment of Wilcox and Marshall JJ. In March 2001 disputes arose as to the means by which changes could be made to the rules concerning the elections of officers of the Construction & General Division ("the Division") of the Construction, Forestry, Mining and Energy Union. A decision of the Divisional Executive, on a proposal to alter the rules to allow elections to be held earlier in the year, was obtained by postal ballot. The applicants contended this was not a course which was open and that the Divisional Conference was obliged to review that decision following a request made by Mr Kingham, a member of the Divisional Executive and Secretary of Victorian Building Unions Divisional Branch. At about the same time as these events took place four Divisional Branches advised Mr Sutton, the Divisional Secretary, of resolutions passed requiring the holding of a referendum on the question whether the Divisional Executive should make rule amendments requiring the election of three officers by direct secret ballot of all financial members of the Division. A petition to the same effect was tabled by Mr Kingham at the meeting of the Divisional Executive on 21 March 2001. The first respondents (whom I shall refer to as "the respondents") contend that neither the resolutions nor the petition fulfilled the requirements of the rules and the Divisional Executive was therefore not obliged to conduct a referendum.

99 As to the first issue raised by the appellants, his Honour the primary Judge, Goldberg J, held that there was nothing in the rules which created a right in any person to have the Divisional Conference review a decision of the Divisional Executive. Rule 9.15 of the Divisional Rules provides that the exercise by the Divisional Executive of its powers are subject to review by the Divisional Conference. This rule was relied upon by the respondents as creating an obligation, on the part of the Conference, to review the Executive's actions upon request, although the question whether this applied to any request which was made was left largely unresolved in argument. His Honour observed that there was no mechanism provided by the rules to deal with requests. In his Honour's view the language of Divisional Rule 9.15 left it to the Divisional Conference to determine whether to review. It was under no duty to do so. I respectfully agree. It would follow that there can be no implied restraint on the power of the Divisional Executive to give effect to its decision pending a review as requested, as the respondents contended. It would not seem to me necessary to consider whether that is the case where the Divisional Conference has not yet determined whether to review.

100 A number of issues concerning the holding of a referendum arose for his Honour's consideration. The question whether the Divisional Branches' resolutions were effective for the purpose of requiring the Divisional Executive to hold a referendum turned largely upon the construction of r 10(i) of the Divisional Rules:

"(i) On a decision of a majority of Divisional Branches, or Divisional Branches whose membership constitutes a majority of the members of the Division or on receipt of a petition signed by not less than 10 percent of the financial members of the Division, Divisional Executive shall take a referendum of the whole of the members of the Division upon the matter or matters submitted by the Divisional Branches or members. A decision reached by a majority of the actual votes recorded shall be binding on the Divisional Conference Divisional Executive and the members of the Division. ..."

Rule 20 of the rules of the CFMEU ("the National Rules") is in similar terms.

101 It was argued by the appellants before his Honour that the four Divisional Branches' membership constituted a majority of the members of the Division. The appellants however accepted that if this part of the rule referred to both unfinancial and financial members, the four branches would not have the required number. Their argument depended upon the reference to "members" and "membership" in the first part of the rule being read as referable to financial members. His Honour rejected that construction. His Honour gave the terms their defined meanings. I agree that his Honour was correct in that approach for the reasons given by Wilcox J and Marshall J. The fact that the rule goes on to refer to financial members only as being eligible as petitioners is explicable. There is not an obvious inconsistency with the earlier part of the rule.

102 Substantial argument was addressed to the alternative method undertaken for the calling of the referendum, namely the petition. (A number of documents containing the names of persons said to be members and their signatures are collectively described as "the petition"). When the petition was tabled at the meeting on 21 March 2001, Mr Kingham put a motion to establish a committee to check the financial status of the signatories to the petition. The motion was lost. Instead, the Divisional Executive resolved to seek legal advice in relation to the Divisional Executive's obligations with respect to the petition. On 28 March 2001 a physical examination of the documents was commenced. On 2 April Mr Sutton instructed the National legal officer and another person to oversee the process of checking not only the financial status of members, but also whether there was an application for membership relating to that person in the Division's records, and whether the signatures were genuine. This process was undertaken until 7 June 2001.

103 These actions, on the part of the Divisional Executive, occurred in the background of the appellants having applied to the Court, on 22 March 2001, for orders requiring the respondents to show cause why orders should not be made requiring them to perform and observe the rules of the Division. In particular, an order was sought requiring the respondents to forthwith make all necessary arrangements for the holding of a referendum of the financial members of the Division on the question set out above.

104 There were 8,615 signatures on the petition. The report commissioned by the Divisional Executive advised that 7,376 of the persons named were financial members. The parties further adjusted this figure to 6,972. These adjustments took account of signatures which were obviously frivolous and any duplications. The figure reached was a little more than the requisite ten per cent of financial members. The report of the investigation was to the effect that application forms for membership could be found only with respect to 5,257 of those persons. The other 1,715 petitioners were shown as financial members in the various records of the Division but no application forms completed by them could be found. His Honour was satisfied that the 1,715 persons should be regarded as financial members of the Division. The respondents challenge that finding. In their submission, proof of payment of dues does not amount to proof of membership. Further, the evidence disclosed that some payments had been made by persons other than the applicant for membership. In those cases, it was submitted, a conclusion that the person intended to become a member was not possible.

105 Rule 7(v)(a) of the National Rules tells against the respondent's argument. It provides, in relevant part:

"Notwithstanding anything elsewhere contained in the Rules of the Union no application for membership of the union shall be void or irregular only for the reason that the form of application is not fully completed or completed at all, or that some other form of application is used, or any other procedure under the Rules has not been complied with provided that the person intended to, and did in fact, in some way or other, apply for membership and the Union treated the person as a member...For all purposes the payment of union dues in whole or in part shall be taken to be, without limiting the generality of the foregoing, a method by which a person intended to, and did in fact, in some way or other, apply for membership and/or evidences an intention to be or become a member".

106 His Honour held that the rule does not require a completed application form as a precondition to membership. Under the rule a person may be a member despite a form not being completed. What is necessary is that the person intended to become a member and payment of union dues is evidence of that intention. His Honour also held that the rule could be construed to refer to payments by that person or to a payment being made on their behalf and that such an approach was consistent with other methods of payment referred to in the Divisional Rules. It has not been shown that his Honour was in error in these respects. It follows that the appellants were not obliged to produce applications for membership before a person could be counted as a member.

107 Additionally, as his Honour observed, the 1,715 persons were treated as members in the records of the union. This might be sufficient to give rise to a presumption - to the effect that the correct procedures relating to applications for membership had been followed. Later in these reasons I deal with the question of a presumption which might apply in connexion with the signatures on the petition. A similar argument was not however raised on the topic of membership and it is not necessary to deal with it further.

108 The lack of production of signed application forms was said to have another significance in the respondents' argument. This was so because, it was contended before his Honour and on appeal, the appellants were obliged to prove, to his Honour's satisfaction, that ten per cent of financial members had in fact signed the petition. That required their signatures to be verified in some way.

109 The appellants produced evidence from 458 of the 1,715 signatories in question, to the effect that they had completed application forms for membership and signed the petition. Their numbers were not sufficient to take the number of persons whose signature had been verified to over ten per cent. A question which arises on this appeal is whether that was necessary to be shown.

110 The questions, for his Honour's determination, did not include one as to whether the Divisional Executive had been obliged to call a referendum when the petition was received by it, or whether it remained obliged to call it on the basis of the facts shown about the number of financial members who had apparently signed the petition. His Honour recorded that the parties joined in formulating questions which included the following:

"D. On the true construction of the rules of the Union insofar as they are binding on members of the Construction and General Division:

...

3. Does the Divisional Executive have the right and/or power to determine whether a signature on a petition is the signature of a member and determine whether the requirements of Divisional Rule 10 have accordingly been met?

4. Has the petition been signed by ten per cent of the financial members of the Construction and General Division?"

111 His Honour addressed the questions posed and answered that numbered D3 in the affirmative. So far as concerned D4, his Honour was not satisfied that the applicants had made out their claim that ten per cent of the financial members of the Division had signed the petition. His Honour considered that, since the applicants had asserted those facts, they were required to establish them by admissible evidence and they had not done so.

112 On the hearing of this appeal the appellants submitted that his Honour ought to have determined that the requisite ten per cent of financial members had signed the petition and, in doing so, ought to have applied a presumption of regularity.

113 The question, whether a presumption is to be applied to the signatures on the petition, does not appear to have been expressly raised before his Honour. Indeed, the approaches taken by the parties and the questions they posed appear to have somewhat confused the evidentiary issue. The appellants apparently took it upon themselves to adduce evidence from 458 persons, although they explained this approach as providing support for the application of a presumption that persons shown as signatories had in fact signed the documents. That is, to an extent, borne out by the written submissions. It has not been shown that the appellants, by their conduct at the hearing before his Honour, bound themselves to prove each signature. To the contrary their written submissions rely upon the petition as prima facie proof and contain the assertion that the respondents are therefore required to adduce evidence to the contrary. They did not identify a particular presumption which was said to apply to the facts of the case. Instead they relied upon s 48 of the Evidence Act 1995 (Cth) to prove the contents of the petition. His Honour ruled, correctly in my view, that the section did not apply and the matter was not further pursued on appeal.

114 The argument now advanced by the appellants does arise in connexion with the value of the petition as evidence, an issue which was raised before his Honour. His Honour determined that the appellants were obliged to go further than reliance upon the signature appearing in the petition alongside the name of the financial member. This is not a case of a fresh issue being raised upon appeal: as to which see most recently Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833 [38] per Allsop J). The respondents were clearly alerted to the extent of the reliance the appellants placed upon the petition and were content to have the matter determined by reference to whether the burden of proof was discharged. In that process the respondents had adduced evidence of the investigation into the petition. The reports contained no reference to doubts being held about the veracity of the 1,715 signatures. The matter was dealt with as a legal question. The argument relying upon presumptions of regularity was raised and addressed in argument on the appeal. It would seem to me just in the circumstances that the appellant now be permitted to further develop the argument it advanced before his Honour.

115 The maxim that everything is presumed to be rightly and duly performed ("omnia praesumuntur rite esse acta") is regarded as both fundamental to law and of wide application: Morris v Kanssen [1946] AC 459, 475. It applies to acts of an official or public nature: see Wigmore Evidence in Trials at Common Law, Vol 9, Chadbourn Revision, 1981 at para 2534; Phipson on Evidence 15th ed. 2000 at para 4-28; Broom's Legal Maxims, 6th ed. 1884 at p. 899. As Lord Simonds observed in Morris v Kanssen (at 475) it is illustrated in the law of agency by the doctrine of ostensible authority and its application to the law relating to corporations is similar. As his Lordship there observed "The wheels of business will not go smoothly round unless it may be assumed that that is in order which appears to be in order". This is reflected in the "indoor management rule" of corporations: see Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146, 171. There would not seem to me to be any bar to the application of the same principle to the business of unions, given that they are organisations of a public nature, governed by rules and registered under the Workplace Relations Act 1996 (Cth) (see generally Edgar and Walker v Meade [1916] HCA 70; (1916) 23 CLR 29, 43-44).

116 It is necessary however to consider what is here sought to be proved by means of a presumption of regularity. In one sense the members of the Union are undertaking a procedure provided by the rules. A difficulty in the application of the presumption, it seems to me, is that what is sought to be established is the singular fact that the individual named signed the petition. This does not involve questions of authority or inferences to be drawn from other acts. The other cases to which the appellant referred, Dawson v Westpac Banking Corporation [1991] HCA 52; (1991) 104 ALR 295 and NZI Securities Australia Ltd v Poignand [1994] FCA 1219; (1994) 51 FCR 584, involved presumptive proof of a prior act having been performed (see also Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506, 514 as to when the presumption may be drawn in such circumstances).

117 Perhaps closer to the facts of this case is the presumption of the law in favour of honesty and against fraud. It has been regarded as coming under the general presumption referred to above: Broom's Legal Maxims at p. 901 and the cases therein cited. Like that presumption, it is rebuttable. There being no presumption of fraud or wrongdoing it must be distinctly alleged and proved: Joseph Constantine Steamship Line Ltd v Imperial Smelting Corp Ltd [1942] AC 154, 192. It would follow, in my view, that the onus of proving any of the signatures to be false would be upon the first respondents.

118 In any event it would seem to me, with respect, that an approach which focuses only upon evidentiary matters might overlook a consideration of what the rules of the Division, and in particular Rule 10(i), have to say about what the parties must do or establish.

119 On a plain reading of the rule, the Divisional Executive is obliged to act "on receipt of a petition..." (emphasis added). This would not suggest to me that it was intended that it then take some months to undertake investigations to determine if the signatures were false or not. It is true that the petition is also required to be signed by the requisite number of members, but there is nothing in the rules which requires the petitioners to have their signatures verified in some way. As his Honour found, it was not necessary to a conclusion that they were financial members that they had signed an application form. On the other hand, the Union and the Divisional Branches were in a position to require members to sign an application form and otherwise identify themselves (:Divisional Rule 4(i); National Rule 7(i)) and then to maintain this information as part of their records. In these circumstances it seems to me quite unlikely that the rules contemplated that the members were to take further action to prove their petition. The Union or Divisional Branches were more likely to be in a position to check signatures. In my view, upon receipt of a petition the onus is clearly on the Divisional Executive to hold a referendum or challenge the petition. In this latter respect I do not doubt its ability to challenge the fact of membership of a person named, or a signature as false, on proper grounds, and that a short period may be necessary to check the status of the person against the records. .

120 The provisions of s 187A(a) and (b) of the Workplace Relations Act 1996 (Cth) would also appear to be relevant to any question of construction of the rules. They provide that the objects of Part IX, which deals with registered organisations, include these objects:

"(a) to encourage the democratic control of organisations; and

(b) to encourage members of organisations to participate in the organisations' affairs".

121 It would not seem to me to be consistent with these objects to read the rules in such a way that the petition of members was not required to be acted upon for a period and to require the members to undertake the burdensome task of verifying the substantial number of signatures necessary.

122 Rule 10(i) is similar in its terms to articles or statutory provisions which allow a proportion of shareholders of a corporation to requisition an extraordinary general meeting (see s 249D(1) Corporations Law, which reduced the number of holders of paid up capital necessary to call a meeting from ten to five per cent). The cases and texts contain numerous observations to the effect that a Court will be reluctant to interfere with the shareholders' right to requisition a meeting and will not impede their reasonable efforts to call a meeting. (See eg Halsbury's Laws of England, Vol 7(1) at para 662 and the cases therein cited including Fruit & Vegetable Growers Association Ltd v Kekewich [1912] 2 Ch 52, 57). They confirm that the directors of a company are bound to give effect to a requisition. Their duty arises "once a requisition of shareholders properly delivered ... has been received ...": Premier Gold NL v Hampson-Tindale (1994) 12 ACLC 931, 935.

123 There do not appear to be many decided cases dealing with the requirements of the requisition itself, namely that the requisition be in writing and signed by the members making it (and see s 249D(2)(c)). This may reflect the fact that such issues do not often arise. This may be understandable. It has been held that the shareholders making the requisition be identified in the notice: Young v Falkirk Football & Athletic Club Ltd (1993) G.W.D. 11-714, noted in Palmer's Company Law, Vol 2, 25th ed. at para 7.406. A similar requirement might apply in the case of unions so that each person's status as a financial member might be checked against the union records. It does not appear to have been suggested in cases or commentaries that the signatures appended must be proved in some way as a pre-condition to directors calling the meeting.

124 There remains one further issue concerning the petition raised by the respondents' notice of contention. It was submitted before his Honour, and on appeal, that an order should not be made requiring a referendum to be held since the question, if answered in the affirmative, would not be effective to alter the method of election without an alteration to the National Rules of the Union and the Divisional Conference or the Divisional Executive do not have the power to alter the National Rules.

125 The change referred to in the referendum question is to the method of election of certain of the officers of the Divisional Executive. Presently Divisional Rule 9.2 provides that members and officers of the Divisional Executive are to be elected by or from the Divisional Conference. The question sought to be put to a referendum was:

"Should the Divisional Executive of the CFMEU's Construction and General Division forthwith make all necessary rule changes so that, as from and including the elections due in 2001, the offices of Divisional President, Divisional Secretary and the two Divisional Assistant Secretaries must all be filled by direct secret ballot of all the financial members of the Division."

126 The election of persons to the Divisional Conference, which is the supreme governing body of the Union (National Rule 13 and Divisional Rule 8(i)), is conducted separately from the election of persons to the Divisional Executive. National Rule 17 provides the procedures for the election of delegates to the Divisional Conference. The method is by direct ballot of the financial members of each Divisional Branch: National Rule 17(i). The ballot is a secret postal ballot: 17(iii)(a). National Rule 17(iii)(e), to which the respondent's argument is addressed, requires that nominations for the position of Divisional Branch delegates of the Divisional Conference be called for in an advertisement. The rule requires that the advertisement

"...clearly indicate that the Divisional Executive and full time Divisional Officers are elected by and from members of the Divisional Conference, that the members of the Divisional Executive make up the National Conference and that National Officers are made up of the principal officers of each Division."

127 If the method of election of some of the officers of the Divisional Executive is altered in the way proposed, this advertisement would not be accurate. To be accurate it would need to inform members that the four Divisional Executive Officers in question are elected by direct ballot of the financial members of the Division and the remaining members and officers of the Divisional Executive are elected by the Divisional Conference. Both methods are permitted by National Rule 18, which deals with the Divisional Executive elections and provides that the composition and manner of election of that body is to be provided by the Divisional Rules.

128 His Honour, Goldberg J, did not consider that any amendment would be necessary to National Rule 17 if the Divisional Rules dealing with the election of the Divisional Executive were altered. National Rule 17 does not itself specify how those elections are to be conducted. It is concerned with the election of the Divisional Conference. In his Honour's view subrule (iii)(e) of that rule should be read as requiring an advertisement which reflects the true position under the Divisional Rules as to how the Divisional Executive is elected. I respectfully agree. The respondents have not shown his Honour's approach to be in any way erroneous.

129 In my respectful view his Honour was in error in one respect, namely, in holding that the appellants needed to prove, and failed in proof of, the validity of the signatures. I would allow the appeal in part and make orders requiring the Divisional Executive to forthwith hold a referendum on the question.

I certify that the preceding thirty-two numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel .