Krantz, Harry David v Federated Clerks Union of Australia [1985] FCA 421

HARRY DAVID KRANTZ v. FEDERATED CLERKS' UNION OF AUSTRALIA GRAY J. 24TH MAY, 1985

& vy S IN THE FEDERAL COURT OF AUSTRALIA ) a & 1 } y SOUTH AUSTRALIA DISTPICT REGISTRY ) vo fl ) eee INDUSTRIAL DIVISION ) S.A. No. T4_of 1984

On 21st December 1984 the Court delivered judgment in this matter. It was held that the rules of the Federated Clerks

Union of Australia failed to make the provisions required by 5s.

133A of the Conciliation and Arbitration Act 1904. Pursuant to

the power given by s. 140(6) of that Act, the matter was

adjourned to give to the organization an opportunity to alter its

rules. Subsequently, the matter was further adjourned on two

There is before me an affidavit of Terrence William

• 2 ~ Sullivan sworn on 15th May 1985, in whach evidence is given of var1cus amendments made to varicscus rules of the organization, those amendments having been certified by the Industrial

Registrar pursuant to s. 133(4) of the Act om 29th April 1985.

Dr. Jessup, on behalf of the organization, has submitted to me that amongst those amendments to the rules are new provisions, which have the effect of overcoming the defect which the Court found to exist in the rules of the organization, in its jucegment given on 21st December 1984. Mr. Heywood-Smith on behalf of the applicants in the proceeding does not dispute that the rule amendments do overcome the defect which was found to exist. He contends, however, that the organization has taken advantage of the adjournment to alter its rules ina number of respects, and that some of the amendments which have been so made themselves raise other difficulties of compliance with 5s. 140(1) of the Act. In particular, Mr. Heywood-Smith desires to draw attention to a number of features of the amendments which he says made provisions which are in contravention of s. 140(1)(c) of the Act, in that they impose on members of the organization conditions, obligations or restrictions which, having regard to the objects of the Act and the purposes of the registration of

organizations under the Act are oppressive, unreasonable or

I am required to rule as ta whether such an attack on

the rule amendments is permissible in these proceedings, or as to whether, the amendments having become part of the rules of the

organization, anyone who wishes to challenge their validity under

s. 140 15 now obliged to apply for a Rule to Show Cause under

sub-s. (2) of that section and to mount a fresh challenge.

There is very little in the way of authority that has been drawn to my attention on this question. Mr. Heywood-Smith has referred to the decision of the late J.B. Sweeney J. in

Luckman v. Australian Postal and Telecommunications Union (1978)

28 A.L.R. 392. At page 400 and the following pages of that report, Sweeney J. considered amendments which had been made to various rules of the union there under consideration, during an adjournment granted under s. 140(6) of the Act. In each case his Honour found that the challenges to the particular amendments failed and that he was satisfied that those amendments did make proper provision. It should be pointed out that that case differed from the present in that the effect of his Honour's earlier reasons for judgment, which led to the adjournment, was that certain provisions of the rules of the Australian Postal and

Telecommunications Union were found, themselves, to be in

contravention of the Act. In the present case, as I have said, the contravention consisted of a failure adequately to make a provision required by the Act. All that Sweeney J. was called upon to do was to look at specific rules and decide whether the alterations made to them had removed their disconformity with the Act. I have to look at all of the amendments made for the

purpose of seeing whether the defect which I found to exist has

At page 402 in the report of Luckman's case, however,

Sweeney J. did draw attention to other features of the amendments

"During the course of my examination of the rules it appeared that the effect of the amendments made was that there was no power in the members to remove members of

committees. This was not one of the matters in controversy argued before me, but I have drawn the attention of the parties to this. I am informed that

steps are being taken to amend the rules to provide for this power.

Io make no comment at allas to the validity or propriety of what is proposed to be done in the amendments other than those made to the seven rules attacked, but I felt it proper to record it, that the

attention of the Registrar might be directed to this question when he 21s considering the certification of any

amendments to these rules. In addition, the deletion of © 40 may make it necessary

to consider the power to remove branch officers and members of the State Executive and in the light of the new r 56 the provisions of rer 7(d), (e) and (f) will require further consideration. These, however, are not part of the matters in controversy between the parties at this time and they are matters proper for the

certification of the rules comes to him." As appears from that passage the rule amendments ir that case had not been certified under s. 139(4) of the Act by the time the Matter came back before his Honour. In the present case the rule amendments have been so certified. This means that the industrial Registrar must have performed his function under s. 139(4) of considering whether the amendments were contrary to the provisions of the Act. The passage that I have referred to from Luckman's case does indicate that the court there was unwilling to travel outside the matters in controversy between the parties

an considering rule amendments made during an adjournment.

Mr. Heywood-Smith has argued very persuasively that

there are matters of convenience to the Court and to the parties,

and matters of the cost and continuance of litigation which are

very relevant to the consideration of what I should do. He points out that 1f a new Rule to Show Cause is obtained, the Court which hears it will find it necessary to investigate factual matters which have been investigated previously in the proceedings before mé. He contends that the expense of leading evidence of the same matters all over again would be unjustified and that I should therefore lock at the form of amendments in the light cf the evidence which I have heard. He also draws attention to the problems of costs on both sides of the proceedings, and to the actions which have been taken by the organization in the past with respect to costs of proceedings, by

Some argument occurred with reference to 0. 33 R. 5 of

the Federal Court Rules, as to whether the application of that

rule may not save a considerable amount of costs in subsequent proceedings, by allowing the evidence led in these proceedings to be read again in those proceedings. Hut whatever view is taken of O. 33 R. 5 it would not lead to an entire saving of the costs

These matters are very weighty. On the other hand it seems to me that I have to take account of the difficulties which are inherent in trying to judge all of the amendments made to the rules, by reference to all of the provisions in s. 140(1), in the absence of a new proceeding. Clearly this was a matter which

Sweeney J. declined to do in Luckman's case. It 15 also a matter

which seems to me to be productive of potential difficulties.

• 6 - Section 140(1)(c) was not raised in relation to any of the rules

in the proceeding originally before me. In that sense the case

I do foresee considerable difficulties, if I were to hold that the Ccurt should look at all rule amendments made during an adjournment period, for the purpose of determining at large, and without the notification of grounds which is inherent in the Rule to Show Cause procedure, whether they comply or fail

For these reasons I regard it as the better view, on balance, that the Court should confine itself to the question Whether the defect which was perceived in the rules at the time of the original application has been overcome, and if it has, the remainder of the Rule to Show Cause should be discharged. Any challenge to any provisions, which are contained in the amendments to the rules, can be brought forward by the existing parties or, indeed, by any other member who wishes to challenge

I order that the remainder of the Rule to Show Cause he

t this and tne 5 25 are a true copy of the Judyment herein of his Honour