Koc v Diamond

Federal Court of Australia|2022-02-17|Before: Snaden J

The application be dismissed as against the 21st respondent, Mr Robert Hayden.
Mr Tom Brown, Mr Farren Campbell and Mr Darren Galea be joined as, respectively, the 24th to 26th respondents to the application.
The application for interlocutory relief contained within the originating application of 16 February 2022 be dismissed.
There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

SNADEN J: 1 The Australian Rail, Tram and Bus Industry Union (the "Union") is an employee organisation registered as such under the Commonwealth Fair Work (Registered Organisations) Act 2009 (the "FW(RO) Act"). Like all such organisations, it operates pursuant to rules that have force - and that may be enforced - pursuant to that act. Those rules (the "Rules") make provision for the manner in which the various executive and administrative functions of the Union are discharged. In particular, they provide for the division of those functions throughout various "branches" and "divisions", and for the management of those functions by various executive organs (to which more particular reference will shortly be made). 2 Of particular relevance presently is the existence within the union of a Victorian "branch". That branch spans a number of "divisions", one of which is known as the Tram and Bus division. The applicant is the Secretary of that Victorian branch division. The respondents collectively comprise the executive body known under the Rules as the Union's "National Executive". When context requires, references hereafter to that body should be read as references to the respondents. 3 The National Executive, in laymen's terms, sits at, or nearly at, the apex of the Union's executive decision-making hierarchy. It is answerable only to the Union's "National Council", which ordinarily meets once every two years. The National Executive's functions are broad; but they include the hearing and determination of misconduct charges that are laid against "National Office Bearers" in accordance with the Rules. The Rules separately establish a "Branch Executive" for the Union's Victorian branch (hereafter, the "Branch Executive"), which assumes similarly broad functions, albeit limited to the operation of that branch. 4 By correspondence dated 2 October 2021, a member of the Union laid charges of "gross misbehaviour" against the applicant. Those charges (hereafter, "the Charges") were purportedly laid under r 69 of the Rules, to which attention shall shortly turn. 5 Between 2 October and 9 December 2021, a number of resolutions were passed by the Union's Branch and National Executives in relation to the Charges. Two, in particular, assume present significance. On 29 October 2021, the Branch Executive resolved to refer the Charges for determination by the National Executive. On 9 December 2021, the National Executive passed a resolution purporting to schedule a hearing in relation to the Charges, and directing the applicant to provide it (or its members), by Friday, 18 February 2022, with any "submissions and witness statements" upon which he wished to rely in defence of them. That resolution followed a resolution of the Union's National Council on 10 November 2021, by which that body purported to endorse the Branch Executive's referral of the Charges to the National Executive (and, perhaps more relevantly, to schedule a special meeting of the Union's National Executive to facilitate their determination). 6 By the present application, the applicant contends that the National Executive intends to hear and determine the Charges in a manner or manners that are contrary to the requirements of the Rules. He moves the court for interlocutory relief under s 164(4) of the FW(RO) Act to prevent the National Executive from proceeding as has been foreshadowed. 7 For the reasons that follow, I am not persuaded that relief in that nature should be granted. The interlocutory application will, therefore, be dismissed.

Evidence 8 The application for interlocutory relief came before the court on Thursday, 17 February 2022. The applicant read, without objection, an affidavit affirmed on 16 February 2022 by his solicitor, Ms Antonia Sakkas. 9 At the outset of the hearing, counsel for the respondents drew the court's attention to the fact that the 21st respondent was no longer a member of the National Executive; and that, in addition to the remaining named respondents, he acted for three other individuals who are but who were not named as respondents. With the consent of all concerned, I indicated that I would make orders dismissing the application as against the 21st respondent and adding the three other National Executive members as the 24th to 26th respondents.

Preliminary matter 10 The application for interlocutory relief came before me in my capacity as duty judge. It was brought on for hearing quickly at the request of the applicant. To their credit, all of the respondents were represented and did not object to the matter being brought on for hearing at such short notice. 11 As I indicated to senior counsel for the applicant during the hearing, the matter ought to have been commenced much earlier than it was. The applicant has known for more than three months that the Charges would be heard by the National Executive. For more than two months, he has known about the schedule that has been put in place to bring the matter to conclusion, including the requirement that he provide material in his defence by Friday, 18 February 2022. Although, in November, he challenged the National Executive's assumption of power to determine the Charges, it was not until Friday, 11 February 2022 that he sought (at least formally) an undertaking that the National Executive not proceed with the hearing of the Charges. It was not until Wednesday, 16 February 2022 - two days prior to the deadline of which he was advised in December 2021 - that he filed the present application. 12 All the same, the applicant came before this court laying claim to urgent interlocutory relief. The court was informed that the delay was a function of some confidential discussions, which, for obvious reasons, were not particularised. That being so, I should constrain any expression of frustration. Nonetheless, the present urgency ought not to have been allowed to get to where it did. In the minds of other duty judges, that alone might have been reason enough not to hear the matter with anything like the expedition that has occurred (or, for that matter, at all). In light of the representations made by senior counsel for the applicant, I shall indulge no further irritation.

Relevant principles 13 The applicant's claim for interlocutory injunctive relief arises under s 164 of the FW(RO) Act, which provides as follows (by subsections that, for some reason, are not entirely consecutive): 164 Directions for performance of rules Application for order directing performance of rules (1) A member of an organisation may apply to the Federal Court for an order under this section in relation to the organisation. Note: For the meaning of order under this section, see subsection (9). (2) Before making an order under this section, the Court must give any person against whom the order is sought an opportunity of being heard. (3) The Court may refuse to deal with an application for an order under this section unless it is satisfied that the applicant has taken all reasonable steps to try to have the matter that is the subject of the application resolved within the organisation. Court may make interim orders (4) At any time after the making of an application for an order under this section, the Court may make any interim orders that it considers appropriate and, in particular, orders intended to further the resolution within the organisation concerned of the matter that is the subject of the application. (5) An order under subsection (4) continues in force, unless expressed to operate for a shorter period or sooner discharged, until the completion of the proceeding concerned. Definition (9) In this section: order under this section means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules. 14 Inherent in the applicant's case is a contention that the National Executive proposes to operate in contravention of the Rules insofar as it intends to hear and determine the Charges. It is to that process that the applicant seeks to put a stop, including on an interlocutory basis. Various of the Rules assume present significance and it is convenient to replicate them. 15 Rule 69 is headed "general obligations of office bearers and action in relation to misconduct". It provides: (1) A person holding an Office within the Union shall carry out his/her role in an honest, competent and diligent manner. He/she shall abide by these Rules and the policies and decisions of the Governing Bodies of the Union. (2) A person holding an Office who has been found guilty in accordance with the procedures set out in this Rule of a breach of his/her obligations as an Office Bearer may be reprimanded, warned, temporarily suspended from office for a period of not more than twelve months, fined an amount not exceeding $100.00 or, subject to Sub-Rule 69(3), removed from office. (3) A person holding an Office within the Union may be removed from office, only if he/she has been found guilty in accordance with this Rule, of a misappropriation of the funds of the Union, a substantial breach of these Rules or gross misbehaviour, or gross neglect of duty or has otherwise ceased to be eligible to continue to hold Office under these Rules. For the purposes of this Rule, a "substantial breach of these Rules" includes a persistent refusal or failure to abide by the obligations imposed by these Rules including those obligations imposed by Sub-Rule 69(1). (4) Any member, including an Office Bearer, wishing to invoke the preceding Sub-Rules against a person holding an Office, shall detail in writing the conduct or circumstances alleged to justify disciplinary action and forward that written charge to the National Secretary in the case of National Office Bearers and to the Branch Secretary in the case Branch Office Bearers, who shall forward a copy to the person against whom the charge is made. When the National Secretary or the Branch Secretary, as the case may be, forwards the written charge to the Office Bearer, that Office Bearer shall be requested to advise the National Secretary or the Branch Secretary, as the case may be, within seven days whether he/she admits to or denies the charge and/or whether he/she wishes to make any comment thereon. (5) Where the National Secretary or the Branch Secretary is the person against whom the charge is made, then the charge shall be forwarded to the National President or the Branch President, as the case may be, who shall take the actions that would otherwise be taken by the National Secretary or the Branch Secretary under this Rule. (6) At the next Ordinary or Special Meeting of the National Executive in the case of National Office Bearers and the Branch Executive in the case of Branch Office Bearers, the charge and any reply made by the person against whom the charge is made, shall be considered and the Executive may resolve: (i) that the person charged shall be called upon to show cause to the Executive why he/she should not be disciplined; or (ii) that no further action be taken. (7) If the charge is to be proceeded with, the person charged shall be called upon to attend before the National Executive or the Branch Executive, as the case may be, at a stated time and place to show cause why he/she should not be disciplined. The person charged shall be given at least twenty-one days' notice of the time and place of the hearing. At least fourteen days before the hearing, the person laying the charge shall provide the Office Bearer with particulars of the charge reasonably sufficient to enable him/her to know the nature of the allegations made against him/her and the circumstances alleged to justify disciplinary action. (8) An Office Bearer who has been charged may, by resolution of the National Executive or the Branch Executive, as the case may be, be directed not to carry out some or all of the duties of his/her Office pending the hearing and determination of the charge. (9) At the hearing, the person laying the charge and the person charged: (i) shall be heard in person if he/she or they so desire; (ii) may submit a written statement; (iii) may call witnesses; (iv) may examine and cross-examine witnesses; (v) may present evidence relevant to the charge. (10) No person shall be present at the hearing of the charge other than the person charged, the person laying the charge, the members of the National Executive or the Branch Executive, as the case may be, and any witnesses called, provided that any witnesses called may only be present while such witness's evidence is being taken. No person other than members of the National Executive or the Branch Executive, as the case may be, shall be present after the hearing of the charge while the Executive is deliberating upon its decision in relation to that charge. (11) Where the member laying the charge or the person charged is a member of the National Executive or the Branch Executive, as the case may be, then that person shall take no part in the deliberations of the Executive and shall absent himself/herself during the Executive's deliberations. (12) The National Executive or the Branch Executive, as the case may be, shall determine whether or not the charge has been proven and subject to Sub-Rule 69(3), determine the appropriate penalty. (13) An Office Bearer who is found guilty pursuant to this Rule, shall have a right of appeal to the National Council in the case of a decision by the National Executive and to the Branch Council in the case of a decision by the Branch Executive. The appeal may be against the finding of guilt and/or the penalty imposed. (14) An appeal right shall be exercised within fourteen days of receipt of written advice of the decision of the Executive by notice in writing to the National Secretary or the Branch Secretary, as the case may be, or, where the National Secretary or the Branch Secretary is the person charged, to the National President or the Branch President, as the case may be. In hearing such appeal, the Council shall follow the same proceedings and accord the Office Bearer the same rights as are provided for in this Rule in relation to the hearing of the matter by the Executive. (15) A Branch Office Bearer shall have a further right of appeal from the Branch Council to the National Executive, whose decision shall be final. 16 Rule 3 contains the following relevant definitions: "Office" means all positions specified in these Rules as National Offices or Branch Offices. "Office Bearer" means a person holding an Office. … "National Offices" means the Offices specified in Sub-Rule 31(1). … "Branch Offices" means the Offices specified in Parts X to XV. 17 Parts X to XV of the Rules contain provisions specific to individual branches. In the case of the Union's "Victorian Branch", relevant provisions are contained within Part XIV. Rule 161 (which falls within that part of the Rules) nominates the various offices that qualify as "Branch Offices" in that branch. Among them are the offices of "Branch Divisional Secretaries", one of which is held by the applicant. 18 Rule 31 identifies the Union's "National Offices". Among them are the representatives of "National Divisional Committee[s]". Rule 9 is headed "governing bodies and other committees". It establishes (amongst other bodies) "National Divisional Committees", the membership of each of which includes relevant "Branch Divisional Secretaries" (of which the applicant is one). Rule 40(2) of the Rules provides to materially similar effect. 19 As the secretary of the Tram and Bus Division of the Union's Victorian Branch, then, the applicant is (at least arguably, if not obviously) the holder of both a "National Office" and a "Branch Office". That reality assumes some significance. 20 In Briant v Martin [2020] FCA 1009, [19]-[22] (Snaden J), I made the following observations about the legal principles that govern the court's consideration of matters such as this one: The parties were more or less aligned as to the principles that the court must apply in considering whether or not to grant interlocutory relief in a case such as this one. By her written submissions favouring a grant of interlocutory relief, the applicant contended as follows (references omitted): The power to make the order under s 164 and 164A is a function of the conferral of the jurisdiction on the court. The court can make interim orders 'that it considers appropriate': ss 164(4). The section does not import the law governing the grant of interlocutory injunctions. One purpose of an interim order under s 164 reflects that of interlocutory injunctions, namely to maintain the status quo to enable[ ]the court to do justice at trial. However, there may be little difference in practical application between the usual test for interlocutory injunctions and the statutory test. What is likely to occur at trial, if the evidence remains the same, is relevant in determining if relief should be granted. It will only be [in] rare cases that a court, satisfied there has been a failure to perform or observe the rules, will deny relief to remedy the contravention. I adopt that statement of principle. To it I should add only one qualification: namely, that it will be rare for the court to be "satisfied", on an interlocutory basis, that there has been a failure to perform or observe an organisation's rules. Necessarily, that is a question that lies for determination at the trial stage. At the interlocutory stage, the court's attention is as to whether or not there is a prima facie case that there has been a failure to perform or observe an organisation's rules. In Johnston v Cameron [2002] FCA 948, [98]-[100] (Weinberg J), this court made the following observations about the principles to be applied in an application for interlocutory relief under a legislative predecessor of s 164 of the Act: There is authority for the proposition that the usual test for interlocutory injunctions, namely, that there be a serious question to be tried, and that the balance of convenience favour the grant of such an injunction, may not be applicable under s 209: McGee v Sanders (No 2) [1991] FCA 554; (1991) 32 FCR 397 at 402-403 and Adlam v Noack (1998) 90 IR 31 at 34-35. In the former case, Gray J concluded that s 209(4) required the Court to do justice as best it can when confronted by an application for interim orders. In the latter case, von Doussa J observed that one of the primary considerations in determining whether or not to make interim orders "must be the efficient and effective working of the Union pending the final resolution of the proceedings". There seems to me to be little difference, in practical application, between the usual test for interlocutory injunctions, and the test propounded for use under s 209. For the sake of convenience I propose to adopt the traditional language associated with the usual test, though bearing in mind the need to apply that test with some flexibility. Respectfully, I agree. As his Honour did on that occasion, I shall employ "the traditional language associated with the usual test" but I shall do so conscious of the qualifications thereupon to which the authorities refer. 21 Those observations apply with equal force to the present matter.

The case for interlocutory relief 22 The applicant submits that the National Executive has no power under the rules to determine the Charges. That, in turn, is said to reflect his status as the holder of a Branch Office. Rule 69, he says, maintains a consistent demarcation between the National Executive and Branch Executives: the former is responsible for determining charges brought against the holders of "National Offices" and the latter is responsible for determining charges brought against the holders of "Branch Offices". As he is, so he contends, the holder (or primarily the holder) of a "Branch Office", it should follow that the Charges may only be heard and determined by the Branch Executive, not the National Executive. 23 That logic is impeccable save in one respect. As has already been traced, the applicant is - or, at least on the evidence as it now stands (untested as it is), appears very much to be - the holder of both a Branch Office and a National Office. If that is so, r 69(6) of the Rules would seem to vest in the National Executive a power to determine the Charges. 24 Nonetheless, the applicant maintains that r 69 gives effect to a very clear and consistent demarcation as between national and branch-level bodies. The submission is elegant enough: pursuant to that demarcation, an "accused" official could only be stripped of a "National Office" by a national body (National Executive or, on appeal, National Council) and, concomitantly, could only be stripped of a "Branch Office" by a branch-level body (Branch Executive or, on appeal, Branch Council). Here, because the applicant holds a National Office only by reason of his holding his Branch Office, the only office from which he could legitimately be removed for reasons of misconduct is that Branch Office, which is a course upon which only a branch-level body is authorised by the Rules to embark. 25 However elegant, I do not consider that argument likely to succeed. True it is that the Rules appear not to countenance the possibility - indeed, the obvious, structural necessity - that some of the Union's officials will simultaneously hold both National and Branch Offices. Nonetheless, the demarcation to which the Rules give effect concerns only the identity of the body that is authorised to process charges laid against an official. Once identified, there does not appear to be any restriction, in r 69 or elsewhere, upon the sanction that that body might impose. It is conceivable that that was (and that evidence might be led to establish that it was) the intention animating the demarcation that r 69 appears quite clearly to establish; but the words that are employed do not obviously give effect to that. I consider (albeit on only a prima facie case basis) that the better construction is that the National Executive and National Council are empowered to mete out sanctions to the bearers of "National Offices". There is no obvious reason why that couldn't include removing them from any Branch Office that they hold. That is particularly so where, as here, that would be the only way to remove them also from their National Office. 26 If there is a prima face case that the National Executive lacks power under the Rules to determine the Charges, it is not a strong one. On the contrary, it seems ambitious.

Balance of convenience 27 The applicant presses for urgent interlocutory relief in order that he might be relieved of the need to comply with the requirements of the National Executive's resolution of 9 December 2021 (above, [5]). One such requirement was that he should provide to the National Executive, by Friday, 18 February 2022, such material in his defence to the Charges as he wishes to advance. In support of the present application, the applicant sought to explain (via the evidence of his solicitor) that he has various, pressing matters to which he must attend as Branch Divisional Secretary; and that the requirements imposed upon him, if not set aside, would curtail his capacity to do so. That capacity, he explained, is already stretched on account of other staff within the Branch Division presently being on leave. 28 The applicant sought to elaborate on the pressing matters from which he would be distracted were the National Executive's directions to stand undisturbed. One such matter concerns an ongoing investigation into allegations of financial misdealing involving one of the respondents. That investigation was the subject of curiously fulsome particulars, which it is unnecessary here to repeat. 29 Plainly, if it transpires at trial that the determination of the Charges falls (or, as the case may be, fell) beyond the regulatory competence of the National Executive, then the steps that the applicant takes in defence of them will be steps that he ought not to have been required to take (at least not by that body). There is, undoubtedly, at least a measure of inconvenience in leaving those requirements undisturbed. 30 However, even if it does transpire that the National Executive is the wrong forum within which to ventilate the Charges, it would not follow that the Charges would or should proceed unventilated. It seems hardly controversial to observe (though it could not be guaranteed) that, if events required it, the Charges would likely revert for hearing and determination by the Branch Executive. Were that to occur, it seems far more likely than not that the applicant would need to advance before that body much the same material that he has been invited to advance before the National Executive. In that sense, then, the inconvenience inherent in the court's declining the present application will likely be limited, at least to some degree. 31 Inevitably, the efforts to which the applicant is put in complying with the directions of the National Executive will divert him from other tasks, including what are undoubtedly important matters requiring his attention. Relevant though that consideration plainly is, there is no evidence to suggest that any of those matters is so pressing or urgent that it couldn't be attended to at some later point. 32 True it is that there would be no strong prejudice to the respondents were interlocutory relief to be granted in favour of the applicant. Indeed, the delay in hearing and resolving the Charges in the manner presently contemplated is the only apparent prejudice that they would suffer. Nonetheless, in the present circumstances, the absence of strong prejudice against the respondents is not sufficient to incline the court to exercise its discretion to grant interlocutory relief in favour of the applicant. 33 I do not accept that such inconvenience as might attend the rejection of the present application should suffice to incline the court in the contrary direction. All the more is that so given the weak prima facie case upon which the application rests.

Conclusion 34 I am not persuaded that the court's discretion to grant interlocutory relief of the kind here sought should be exercised. The application for interlocutory relief contained within the applicant's originating application of 16 February 2022 is, therefore, dismissed; and the matter will be referred to the court's national operations registrar for allocation to a docket judge. 35 The respondents pressed for an order that the applicant should pay their costs of the interlocutory application. They did so in spite of s 329(1) of the FW(RO) Act, which constrains the court's ability to grant such an order to circumstances in which (relevantly) a matter has been instituted without reasonable cause. This is not such a case. The fact that the applicant has not succeeded is not sufficient to establish a want of reasonable cause. The matter involves the exercise of discretion, which calls not for any determination that the applicant does or does not have a case to press; but, rather, an impressionistic assessment of whether his case might warrant success at trial and whether the interests of justice warrant relief at this juncture. The respondents cannot clear the hurdle that s 329(1) poses. No order as to costs will be made. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Snaden.

SCHEDULE OF PARTIES VID 73 of 2022 Respondents Fourth Respondent: JAMES JOSEPH STYLES Fifth Respondent: WILLIAM LEKKAS Sixth Respondent: LEANNE HOLMES Seventh Respondent: PHIL ALTIERI Eighth Respondent: KEITH MCMAHON Ninth Respondent: TRENT HOWARD Tenth Respondent: GREG TATNELL Eleventh Respondent: VICTOR MOORE Twelfth Respondent: PETER ALLEN Thirteenth Respondent: ALEX CLAASSENS Fourteenth Respondent: RIC BEAN Fifteenth Respondent: JOSHUA ISAAC DEKUYER Sixteenth Respondent: CRAIG MCKINLEY Seventeenth Respondent: DARREN BRETT PHILLIPS Eighteenth Respondent: JOHN ANDERSON Nineteenth Respondent: DAVE ESQUERIA Twentieth Respondent: NOEL MORRIS Twenty-first Respondent: ROBERT HAYDEN Twenty-second Respondent: CRAIG TURNER Twenty-third Respondent: DAVID BABINEAU Twenty-fourth Respondent TOM BROWN Twenty-fifth Respondent FARREN CAMPBELL Twenty-sixth Respondent DARREN GALEA

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