Mills v Dunham [1997] FCA 1182 | Case summary

REASONS FOR JUDGMENT BRANSON AND MARSHALL JJ. This is an appeal from the judgment of Wilcox J of 19 August 1997 pursuant to leave granted by his Honour on 25 August 1997 under s 421 of the Workplace Relations Act 1996 ("the Act"). The matter before the trial judge was an application under s 218 of the Act for an inquiry in relation to an election for an office in an organisation. Wilcox J found that the Returning Officer in the election had wrongly rejected the nomination of David Hickson as a candidate for the office of New South Wales State Secretary of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ("the Union"). The appellant is the Australian Electoral Commission ("the AEC"), one of whose officers, Lee Jones, conducted the election the subject of the inquiry. The first respondent is Mr Hickson. The second respondent is the Union and the third respondent is Paul Bastian who was declared elected unopposed when Mr Jones rejected Mr Hickson's nomination. There was no appearance by Mr Bastian when this appeal was called on for hearing. Upon the Court being satisfied that Mr Bastian had received proper notice of the appeal and the date and time fixed for its hearing, the appeal proceeded in his absence. BACKGROUND FACTS Pursuant to the rules of the Union, elections for the office of State Secretary of a Branch of the Union are required to be conducted every four years. The rules also provide for candidates in an election for that office to be nominated by ten members. See rule 2 Part A subrules 4(b) and (e). Nominations for election to the office of State Secretary closed on 4 March 1997. Prior to that date, by letter dated 25 February 1997, Mr Hickson lodged a nomination form with Mr Jones. The nomination form contained the names of ten nominators and included Mr Hickson's acceptance of his nomination. The nomination form was as prescribed under the rules. On 5 March 1997 Mr Jones wrote to Mr Hickson advising him that his nomination for the office of Branch Secretary was defective because one of his nominators was not a financial member of the Union. That nominator was Mark O'Brien. Mr Jones advised Mr Hickson that unless he produced evidence to the contrary within seven days he, Mr Jones, would be "obliged" to reject the nomination. On 7 March 1997 Mr O'Brien paid all of his outstanding contributions to the Union. Mr Hickson responded on 11 March 1997 by letter to Mr Jones' letter of 5 March 1997. He alleged that Mr O'Brien was a financial member but enclosed "without prejudice" a nomination from a substitute nominator. The second nomination form was completed by Robin Rahill. Mr Hickson did not sign this form. On 12 March 1997 Mr Jones inquired with Mr O'Brien's employer, the State Rail Authority, as to whether it had made payroll deductions from his wages. Mr Jones was not satisfied that the deductions had been made. By letter dated 18 March 1997 Mr Jones rejected Mr Hickson's nomination. He advised that the nomination was rejected because Mr O'Brien was not a financial member as at the close of nominations. The nomination, he said, was defective and only capable of being remedied if Mr O'Brien was proved to be financial as at the close of nominations. He stated that the defective nomination was not able to be remedied by substituting an unfinancial nominator with another nominator after the close of nominations. Also on 18 March 1997 Mr Jones declared Mr Bastian elected unopposed as State Secretary of the Union. On 1 April 1997 the application for an inquiry pursuant to s 218 of the Act was filed. THE UNION RULES The rules of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ("the Rules") contain in rule 2, provisions concerning election and voting. The election of a State Secretary is governed by rule 2 Part A sub-rule 4 which, so far as is here relevant, is in the following terms: "(4) (a) Each State Returning Officer shall, once each four years, conduct an election for each of the offices of:- ... State Secretary, and ... (b) A member may be nominated as a candidate under this sub-rule if the member:- (i) has been a member for a continuous period of not less than 3 years immediately preceding the closing date for lodging nominations and, during the period of 12 months immediately preceding the closing date for lodging nominations was not unfinancial for a period longer than 3 months; (ii) is a financial member of the Union in the State at the closing date for lodging nominations; and (iii) was, during the period of 12 months immediately preceding the closing date for lodging nominations: (1) employed as an employee in a trade or calling or branch thereof in or in connection with which the Union is registered; (2) unemployed on account of illness, incapacity or inability to obtain employment; or (3) engaged in a full-time office in the Union after having been elected or temporarily appointed thereto. (c) ... (d) ... (e) The required number of nominators for positions under this sub rule are ten." Sub-rule 8 is concerned with nominations. Relevantly it provides: "8. (a) A nomination under this Rule shall be in writing on the form prescribed in paragraph (b), be signed by the nominee and by the required number of nominators and be forwarded to the Returning Officer at the place determined by him/her in accordance with paragraph (b) so as to reach him/her no later than the date determined by him/her as the closing date for lodging nominations. (b) The prescribed form of the nomination shall set out the name of the office, the number of nominators required and the period and place determined by the Returning Officer for lodging nominations. (c) ... (d) A nominator for offices under this Rule shall be a financial member of the Union and, having regard to the office in question, a member in the relevant State, Region, Zone or Division at the closing date for lodging nominations." Rule 2 Part A sub-rules 9 to 12 impose duties on the Returning Officer in relation to the election process. It is necessary to set out the terms of sub-rules 10 and 11: "10. Where the Returning Officer finds a document purporting to be a nomination of a person as a candidate at an election under this rule is defective, the Returning Officer shall:- (a) notify the person by notice in writing sent by telegram, facsimile or other means whereby the notice can be delivered to the candidate as soon as practicable of particulars of the defect or defects; and (b) advise him/her that if he/she remedies the defect or defects he/she should so advise the Returning Officer by notice in writing forwarded to the Returning officer at the place determined by him/her under this rule so as to reach him/her no later than 7 days after the date of sending the notice referred to in the previous paragraph. 11. (a) Where at the expiration of the closing date for lodging nominations or, in the case where the Returning Officer has under sub-rule (10) notified a person of particulars of a defect or defects in his/her nomination as a candidate, at the expiration of seven days after the sending of the notice referred to in paragraph (10) (a), only one candidate is nominated for election to the office, the Returning Officer shall declare that candidate elected unopposed to the office by issuing a statement in writing to the National Council or State Council as the case may be to this effect. (b) Subject to paragraph (a), the Returning Officer shall conduct a secret postal ballot for the office in accordance with the succeeding provisions of this rule and may, subject to the rule, give such directions and take such action as he/she considers necessary for ensuring the secrecy of the ballot and for ensuring that no irregularities occur in or in connection with the ballot." Rule 35 of the Rules is concerned with financial membership. Sub-rule 1 of rule 35 provides as follows: "1. Unless otherwise specified in these Rules a member shall not be financial whilst in arrears with the payment of any contributions, fines, or levies such having to be paid by the last day of the quarter in which they fall due; once so paid the member again becomes financial." Sub-rule 2 of rule 35 contains special provisions, not here relevant, to cover circumstances in which a member has authorised deduction of his or her contribution to the Union from his or her salary or from an account at a financial institution. Rule 2 Part A sub-rule 10, which is set out above, may be assumed to have been included in the Rules to ensure that such rules comply with s 197 of the Act. Section 197, so far as is here relevant, provides as follows: "(1) The rules of an organisation: ... (c) shall provide that, if the returning officer conducting an election finds a nomination to be defective, the returning officer shall, before rejecting the nomination, notify the person concerned of the defect and, where practicable, give the person the opportunity of remedying the defect within such period as is applicable under the rules, which shall, where practicable, be not less than 7 days after the person is notified; ... (2) ... (3) ... (4) The reference in paragraph (1)(c) to a nomination being defective does not include a reference to a nomination of a person that is defective because the person is not qualified to hold the office to which the nomination relates." It is to be noticed that s 197(4) of the Act does not in terms proscribe a rule which would give a Returning Officer the power to allow the remedying of a defect in a nomination which arises because the person nominated is not qualified to hold the relevant office. It simply provides that the rules of an organisation need not provide that the Returning Officer shall give the person concerned an opportunity to remedy such a defect. REASONING OF THE TRIAL JUDGE Wilcox J at 8 described "the evident purpose" of sub-rule 10 as being: "... to provide the nominee an opportunity to remedy the deficiency, thereby saving the nomination from rejection. To that end, the Returning Officer must notify the nominee 'as soon as practicable' of particulars of the defect or defects, and allow a period of seven days for remediation. The implication is that, if the defect is remedied within that time, the nomination is to be treated as redeemed and allowed to stand." His Honour noted the relationship between the relevant sub-rule and the Act and predecessor provisions. He then examined conflicting authorities which dealt with similar provisions in other rules. Wilcox J first examined the judgment of J B Sweeney J in Re Election for Office in Australian Building Construction Employees and Builders Labourers Federation (1978) 30 FLR 252 in which the provisions of reg 146AE(2) of the Conciliation and Arbitration Regulations were examined. Regulation 146AE(2), at the material time, provided as follows: "(2) Where the Returning Officer finds that a document lodged at the place and within the period determined by the Returning Officer under regulation 146AC and purporting to be the nomination of a person as a candidate for an election for an office within an organization is not a nomination in accordance with the provisions of sub-regulation (1), the Returning Officer shall, if practicable, give notice to the person, as soon as practicable, by telegram of the reasons why the document is not a nomination in accordance with those provisions and, where the person is eligible for election for the office under the rules of the organization, the Returning Officer shall, in the telegram, notify the person that his nomination as a candidate for the election may be lodged at that place - (a) within a period of 7 days after the date of sending the telegram; or (b) where, under the rules of the organization, a defective nomination may be remedied within a period of longer than 7 days after the close of the period for lodging nominations - within that longer period." J B Sweeney J held that a Returning Officer had correctly rejected a nomination of a candidate for office in the Australian Building Construction Employees and Builders Labourers Federation ("the Federation") because one of the nominators of that person was not qualified under the rules to nominate him. The candidate was advised by the Returning Officer of the defect in his nomination. He arranged for another nomination form to be provided to the Returning Officer. This nomination was also rejected as one of the nominators was not a continuously financial member of the Federation for the requisite period under the rules. No further opportunity was given to the candidate to remedy the further defective nomination. J B Sweeney J held at 256 that: "... the reference to documents lodged at the place and within the time under reg. 146AC is a reference to the first nomination only. The intention of the regulation is to afford a candidate one opportunity of remedying a faulty nomination, but he is not entitled to have seven days' notice given to him in which to remedy any subsequent nomination which may also be faulty. If the construction were otherwise, a position could well be reached where a candidate lodged a series of faulty nominations and had to receive a period of seven days after each in which to lodge a further nomination. The ballot could thus be extended over a very considerable period. It is true that in this case by reason of the fact that the returning officer examined the nomination paper prior to the closure that the second nomination was lodged at the place and within the period which had been determined by the returning officer, but this was accidental. If the returning officer followed a normal course of not examining the nomination papers until nominations had closed then a second nomination paper could not be lodged within the period fixed by the returning officer under reg. 146AC. To interpret the regulation as asked would give it quite a capricious result, depending on the accident of when the returning officer examined the nomination. I am satisfied no irregularity arose through the returning officer not advising of the rejection of the second nomination prior to 18th July, 1977." Wilcox J at 10 observed that J B Sweeney J ".. did not consider nomination by an unqualified person to be an irremediable defect falling outside the terms of reg 146AE." His Honour then examined the judgment of J B Sweeney J in Re Application by Shahid Naqvi (26 March 1981, unreported). In Naqvi a predecessor provision of the rules relevant to this appeal imposed the following obligations on a Returning Officer: "Where any defective nomination occurs, to notify the member concerned of the defect and, where practicable, afford such member the opportunity of remedying same, such to be done no later than 7 days after having so notified." The first issue in Naqvi was whether Mr Naqvi was a financial member of the union and thus eligible to nominate for office. The second issue was whether, if Mr Naqvi was unfinancial, he should have been given the opportunity to become financial. J B Sweeney J held that Mr Naqvi should have been given the opportunity to remedy any defect in his nomination. As Wilcox J at 12 said: "The significance of Naqvi is simply the attitude of J B Sweeney J to the rule: his readiness to read it expansively and treat it as providing a generous opportunity to remedy a defect." His Honour then referred to two judgments of Keely J in which an approach at odds with that taken by J B Sweeney J was evident. The first of those was Re Australasian Meat Industry Employees Union (19 July 1988, unreported)("the AMIEU case"). The relevant rule in the AMIEU case was not materially different from the sub-rule in question in this appeal. Keely J held that a nomination which was defective by reason of the unfinanciality of a nominator was not capable of being remedied. His Honour held that a candidate who was unfinancial was not able to pay contributions so as to remedy his unfinanciality as at the date of close of nomination and that "for essentially the same reasons, it is too late for a person to become a nominator at that time". In other words, Keely J held that a nominator who was not eligible to nominate a person for office could not be substituted by a new nominator after the time for the acceptance of nominations had expired. Similarly in Re Hall (1994) 58 IR 19, Keely J held at 21 that where a "... purported nominator is a person who ... is not qualified to nominate a person for the office in question" the nomination is "fundamentally flawed" and incapable of being remedied. As Wilcox J observed, Keely J's judgment in the AMIEU case on this issue was based on a concession by counsel which appears to have been incorrectly made and the judgment in Re Hall applies the provisions of s 197(4) to the position of a nominator rather than the nominee which is the subject of the sub-section. The trial judge also observed that Keely J's approach to the relevant rules regarding remedying a defect in a nomination caused by an unqualified nominator was a restrictive one in circumstances where a liberal approach should be applied to construction of such rules. He also identified policy reasons why the approach of J B Sweeney J should be preferred. COMPETING CONTENTIONS The AEC, supported by the Union, contended that the having of ten nominators who are financial at the close of nominations is a qualification to hold the office of State Secretary. These parties further contended that such qualification, if not held as at the close of nominations, cannot be achieved thereafter; a nominator cannot, so it was argued, by the making of a payment after the close of nominations, become a nominator who was financial at the close of nominations. It follows, on this argument, that it would not be practicable, within the meaning of rule 2 Part A sub-rule 10, to give the person concerned the opportunity of remedying the defect. The AEC and the Union put a similar, but alternative, contention as follows: "The financial status at the relevant time under the rules of a registered organisation of a person nominating for office or nominating another person for office is a condition precedent to the ability to do either of those acts. The rules of the organisation are mandatory; either a person has a legal right to perform certain acts under the rules or he or she does not. The non-existence of the right at the relevant time is not a mere 'defect' that can be subsequently cured." The first respondent contended for a wide construction of the word "defect" in rule 2 Part A sub-rule 10 of the Rules, and further submitted that the question of whether it would be practicable within the meaning of sub-rule 10 to give the person concerned the opportunity to remedy a defect is to be answered by considering whether it is possible for action to be taken within the allowed period of seven days to make good the nomination. The first respondent further contended that the question of whether a person is qualified to hold an office is to be decided by reference to matters personal to the nominee, and not by reference to matters relating to the formalities of the nomination process, such as the financial status of one of his or her nominators. CONSIDERATION The issue before the Court is the proper construction of rule 2 of the Rules and in particular sub-rules 4 and 10 of Part A of rule 2. There was no challenge by any party to the validity of rule 2 of the Rules. It was accepted that rule 2, on any of the constructions contended for in this case, meets the requirements of s 197 of the Act. Consequently, there has been no cause to apply the settled canon of construction "that where a clause is ambiguous a construction which will make it valid is to be preferred to one which will make it void." (Mills v Dunham (1891) 1 Ch 576 at 590 cited by Isaac J in Amalgamated Society of Engineers v Smith (1913) 16 CLR 537 at 566). The proper construction of s 197 of the Act is not an issue before the Court on this appeal. The AEC and the Union nonetheless sought to call in aid s 15AB of the Acts Interpretation Act 1901 (Cth) for the purpose of placing before the Court certain explanatory memoranda concerning the Industrial Relations Bill 1988 (Cth). Whilst consideration could, no doubt, have been given to such material had the Court been faced with the task of ascertaining the meaning of s 197 of the Act, the Court was not faced with such a task. The Court refused to allow such explanatory memoranda to be relied on. Rule 2 of the Rules is to be construed having regard to its apparent purpose as disclosed by the words of the rule read in the context of the Rules as a whole. As Gibbs J, with whom Stephen J agreed, pointed out in R v Holmes; ex parte Public Service Association of New South Wales (1977) 140 CLR 63 at 73, union rules - "... should not be subjected to the same meticulous scrutiny as a deed carefully prepared by lawyers, and should not be restrictively construed." See also Re An Election in the Australian Colleries' Staff Association (NSW Branch) (1990) 26 FCR 499 at 502 (Lockhart J); and Re Election for Office in Transport Workers Union of Australia, Western Australia Branch (1992) 40 IR 245 at 253 (French J) and Re Keily; Re Transport Workers Union of Australia (1992) 42 IR 4 at 6 - 7 (Keely J). Where the wording of the rules of an organisation allows, such rules are to be construed in favour of eligibility for election to office, rather than against it (Re Carter; Re Federated Clerks Union of Australia, Victorian Branch (No. 1) (1989) 32 IR 1 at 27 (Gray J)). The crucial provision of rule 2 of the Rules for present purposes is rule 2 Part A sub-rule 8(d). It is convenient to set this paragraph out again: "(d) A nominator for offices under this Rule shall be a financial member of the Union and, having regard to the office in question, a member in the relevant State, Region, Zone or Division at the closing date for lodging nominations." It may be observed that the punctuation of sub-rule 8(d) suggests that the phrase "at the closing date for lodging nominations" qualifies the words "a member of the relevant State, Region, Zone or Division" only; were the intention of the paragraph that such phrase should also qualify the words "a financial member of the Union", a comma after the word "Division" would be expected. However, as no party contended for sub-rule 8(d) to be so construed we put this, as it seems to us, preferable construction, to one side. The question of when a member of the Union is a financial member is to be determined by reference to rule 35 of the Rules. Rule 35 is set out above. It provides that a member shall not be financial "whilst in arrears" with the payment of any contributions etc. The implication of the words "whilst in arrears" is that a payment, when made, rectifies the past lack of financiality. This implication is strengthened by the final words of rule 35. Moreover, such a construction of rule 35 is supported by authorities in which the concept of financial membership has been analysed. In Lovell v Federated Liquor and Allied Industries Employees' Union of Australia (1978) 22 ALR 704 Smithers J, with whom in this regard Evatt J agreed, construed a requirement of a rule that certain persons were to be "financial members for twelve calendar months immediately prior to nomination" as directing attention to the situation which will exist at the moment before nomination. His Honour said at 731: "The question to be asked is: 'Is the candidate today a financial member for twelve months immediately prior to this date?' If he has then paid all dues payable by him and has been a member for 12 months the answer must be in the affirmative. At that stage the candidate is financial in respect of every moment of that 12 months. It is not to the point that during that 12 months there might have been periods when he was not financial." See also Leveridge v Shop Distributive and Allied Employees' Association (1977) 17 ALR 145 and Re Stapleton (1983) 50 ALR 293. The conclusion that rule 35 of the Rules is to be construed as providing for appropriate payments to rectify past lack of financiality is supported by the language of rule 39 of the Rules which is concerned with "Benefit Payments and Legal Aid". Rule 39 provides that to be eligible for benefits under the rule "... a member must be financial in accordance with Rule 35." However, rule 39 goes on to provide that: "If unfinancial a member may obtain benefit from the date that he pays contributions, fines and levies to the end of the quarter in which his claim is made. No claim shall be granted for the period prior to the date of payment." The plain purpose, in our view, of the above provision is to negate for the purpose of rule 39, the usual rule that upon the payment of all outstanding dues, a member becomes financial in respect of the whole period to which those dues are attributable. Wilcox J did not determine the issue of Mr O'Brien's financial status on the closing date for lodging nominations. On the approach which his Honour took it was unnecessary for him to do so. It is convenient for the purpose of analysing the true import of the Rules to make the assumption that Mr O'Brien was not financial on that day, and we make that assumption. On that basis it is to be concluded that, as at the closing date for lodging nominations, namely 4 March 1997, Mr O'Brien, as a nominator, did not satisfy the requirements of rule 2 Part A sub-rule 8(d) of the Rules. However, within three days of that date, Mr O'Brien paid all of his outstanding contributions. On 7 March 1997 Mr O'Brien became financial, to use the words of Smithers J in Lovell's Case, "in respect of every moment" for which such contributions were paid. That is, on 7 March 1997, Mr O'Brien was a financial member of the Union in respect of the closing day for lodging nominations. We turn to consider rule 2 Part A sub-rule 10 of the Rules. Sub-rule 10 has an operation "[w]here the Returning Officer finds a document purporting to be a nomination of a person as a candidate ... is defective". It is not disputed that the nomination form lodged by Mr Hickson was "a document purporting to be a nomination of a person as a candidate". The issue to consider is whether the nomination form was "defective" within the meaning of sub-rule 10? The word "defective" is a word in ordinary usage. It has not been suggested that sub-rule 10 is used in any special or technical sense in The Macquarie dictionary relevantly defines "defective" as "having a defect; faulty; imperfect". The same dictionary relevantly defines "defect" as follows: "1. a falling short; a fault or imperfection. 2. want or lack, esp. of something essential to perfection or completeness; deficiency." Nothing in the above definitions, in our view, suggests that a distinction is to be drawn between something which is merely defective and something which is fundamentally flawed. Nor do the above definitions suggest that a defect is to be confined to matters of formality as opposed to matters of substance. We do not doubt that a document which purported to be a nomination of a person as a candidate under rule 2 Part A sub-rule 8, but which was signed by a number of nominators less than that required by the Rules, would be a "defective" nomination within the meaning of sub-rule 10. We conclude that a document which purported to be such a nomination, and which was signed by the required number of nominators, albeit that one of them was, at the closing date for nominations, not financial, would also be a "defective" nomination within the meaning of sub-rule 10. We therefore conclude that sub-rule 10 required the Returning Officer to notify Mr Hickson of the defect in his form of nomination and further to advise him that if he remedied the defect he should so advise the Returning Officer as required by sub-rule 10(b). The use of the word "or" in the second line of sub-rule 11 reinforces the point that nominations do not necessarily have to be free of defects as at the close of nominations to be valid. In a circumstance in which a Returning Officer has given a notification and provided advice in accordance with sub-rule 10, in our view, sub-rule 11 has the effect that the validity of the relevant document purporting to be a nomination is to be determined at the expiration of seven days after the sending of the notice referred to in sub-rule 10(a). On that day, in our view, Mr O'Brien was properly to be regarded as a "financial member of the Union ... at the closing date for nominations" within the meaning of rule 2 Part A sub-rule 8(d) of the Rules. In view of the approach which we have taken to the proper construction of rule 2 of the Rules, it is not strictly necessary for us to give consideration to whether, as the AEC and the Union have contended, "having 10 nominators who are financial at the close of nominations is a qualification to hold the office of State Secretary". We consider it appropriate, however, to state that we reject the above contention. We accept the submission made by counsel for Mr Hickson that the qualifications to hold the office of State Secretary are those matters personal to a candidate specified in sub-rule 4(b) and (d). Having the required number of nominations is, in our view, a matter which goes to the validity of the nomination of the candidate; it does not go to his or her qualification to hold office. We express no view, however, on whether the practical effect of rule 2 Part A sub-rule 4(b)(ii) of the Rules is that a candidate for election must be a financial member of the Union in the State on the closing date for nominations; that is, on whether a failure to comply with that sub-rule may be later rectified. We draw attention, however, to significant differences in the wording of sub-rule 4(b) and sub-rule 8(d). In our view the appeal should be dismissed. Since writing the above, we have had the advantage of reading in draft form the reasons for judgment of Northrop ACJ. We are in general agreement with what his Honour has said regarding the appropriate procedures to be adopted in election inquiries under the Act. However, we would not wish to fetter the discretion of a judge conducting such an inquiry, as to whether an organisation should be made a party. There will, in our view, be occasions on which it may be desirable that an organisation be heard not only on the question of the validity of its rules but also upon the issue of their correct interpretation. I certify that this and the preceding thirteen (13) pages are a true copy of the Reasons for Judgment herein of the Honourable Justices Branson and Marshall.

Mills v Dunham

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