National Meat Association of New South Wales and Anor [2008] NSWIRComm 33

FILE NUMBER(S): IRC 2056 of 2007; IRC 1293 of 2007

CATCHWORDS: Registered organisation - Application for determination of invalidity - Invalidity found in relation to a failure to hold elections in State registered organisation - Invalidity found in the management or administration of the organisation - Orders proposed to cure invalidity - Factors warranting exercise of discretion to make orders - Court satisfied that orders proposed would not do substantial injustice to the members of the union or any creditor of the union or any person having dealings with the union - Declaration made - Orders made.

LEGISLATION CITED: Industrial Relations Act 1996

CASES CITED: Liquor, Hospitality and Miscellaneous Union, New South Wales Branch [2006] NSWIRComm 244 Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151.

APPLICANT (IRC 2056 of 2007) Mr G P Johnston National Meat Association of New South Wales

APPLICANT (IRC 1293 of 2007) LEGAL REPRESENTATIVES: Mr M Grimson Industrial Registrar

RESPONDENT (IRC 1293 of 2007) Mr G P Johnston National Meat Association of New South Wales

Application by National Meat Association of New South Wales for a determination of the question of an invalidity under s 288 of the Industrial Relations Act 1996

Reference by the Industrial Registrar to the Industrial Court of New South Wales pursuant to s 249(1) of the Industrial Relations Act 1996, clause 31 of the Industrial Relations (General) Regulation 2001 and ss 445 and 521 of the Industrial Relations Act 1991 as preserved by sub-section 282(3) of the Industrial Relations Act 1996.

[2008] NSWIRComm 33 1 By their application of 12 November 2007, the National Meat Association of New South Wales (the "NMA"), Neil Roberts and Peter Hummerston sought a declaration that invalidities had occurred in the management and administration of and elections in the NMA and consequential orders pursuant to s 288 of the Industrial Relations Act 1996. 2 The National Meat Association of New South Wales is registered as a 'State Organisation' under Pt 3 of Ch 5 of the Act. Mr Roberts is the last elected President of the NMA and Mr Hummerstan is one of two last elected Vice-Presidents.

3 During the course of the hearing of the application, Mr G.P. Johnson, who appeared on behalf of the NMA, was granted leave to amend the orders sought in the application. As a result of that amendment the final orders sought by the NMA were in the following terms:

The Court orders that: A. On the facts before it, the Court determines, declares and orders that invalidities have occurred in the management or administration of and elections in the National Meat Association of New South Wales ('the union'). B. That upon the basis of such invalidities, the Court, being satisfied that the orders made herein do not do substantial injustice to the union or to any member or creditor of the union or to any person having dealings with the union, orders: 1. That Messrs B. Ashton, G. Edmonds, P. Hummerston, N. Roberts, R Stapleton, J. Woolridge,, C. Wright, and T. Wright continue in office to enable and allow the facilitation and calling and holding of a General Meeting of members, and 2. Messrs Hummerston and Roberts continue to hold the office of Secretary and President respectively for the purposes outlined in order 1 above, and 3. If such General Meeting decides upon dissolution of the union, all or any of the aforesaid named persons be allowed to take any necessary steps associated with such dissolution resolutions in accordance with rules of the union and the legislation. 4. That the actions of the union in filing audited accounts for the years ended 31 December 2004 and 2005 be validated. 5. That the union takes the necessary steps to file audited accounts for the years ended 31 December 2006 and 2007. 4 This is an unusual application because the applicants sought the aforementioned orders so as to commence a series of processes that would, if successful, dissolve the NMA. If the orders are made by this Court, the relevant officers of the NMA propose to call a General Meeting of the members of the organisation to consider resolutions which, if carried, would lead to the dissolution of the organisation and the concurrent registration of a related federal organisation as a State Organisation. Unless there is a validation order made those future intended processes cannot be undertaken, as there will not be officers (or governing bodies) capable of bringing forward those initiatives.

5 The NMA has been in existence in some form or another since early last century and has been a vital entity under New South Wales jurisdiction in the meat industry. It presently has some forty members. In the last seven years the NMA has been involved in various matters before the Commission and in many industrial and non-industrial issues representing members. It has also been a party concerned in various state awards. The NMA is not regarded as a branch or division of any related federal organisation. It is a distinct albeit related entity to the federal organisation termed the Australian Meat Industry Council. It is expected that on dissolution of the NMA that the Federal Organisation will become registered under the relevant state statutes. 6 The catalyst for the application was a report filed on 10 August 2007 by the Industrial Registrar to the effect that the NMA had failed to comply with its registered rules and relevant statutory requirements. That report was the subject of Matter No 1293 of 2007. While the report concerned only a failure to hold elections, the evidence adduced with this application, provided a full ventilation of the relevant invalidities which also included the failure of the NMA to lodge financial returns for certain years and its failure to fulfil certain ancillary management and administrative obligations.

Legislation 7 S 288 of the Industrial Relations Act provides that: 288 Commission may make orders in relation to consequences of invalidity (1) An organisation, a member of an organisation or any other person having a sufficient interest in relation to an organisation may apply to the Commission for the determination of the question whether an invalidity has occurred in: (a) the management or administration of the organisation, or (b) an election or appointment in the organisation, or (c) the making or alteration of the rules of the organisation.

(2) On an application under subsection (1), the Commission may make such determination as it considers appropriate.

(3) If, in a proceeding under subsection (1), the Commission determines that an invalidity of a kind referred to in that subsection has occurred, the Commission may make such order as it considers appropriate: (a) to rectify the invalidity or cause it to be rectified, or (b) to negative, modify or cause to be modified the consequences in law of the invalidity, or (c) to validate any act, matter or thing rendered invalid by or because of the invalidity. (4) Where an order is made under subsection (3), the Commission may give such ancillary or consequential directions as it considers appropriate. (5) The Commission must not make an order under subsection (3) without satisfying itself that such an order would not do substantial injustice to: (a) the organisation, or (b) any member or creditor of the organisation, or (c) any person having dealings with the organisation. (6) The Commission may determine: (a) what notice, summons or rule to show cause is to be given to other persons of the intention to make an application or an order under this section, and (b) whether and how the notice, summons or rule should be given or served and whether it should be advertised in any newspaper. (7) This section applies: (a) to an invalidity whenever occurring (including an invalidity occurring before the commencement of this section), and (b) to an invalidity occurring in relation to an association before it became an organisation.

Submissions and evidence of applicants 8 The current registered rules of the NMA, which were certified on 28 May 1996 provide for the NMA's overall management and administration. The rules relevantly provide as follows: i) Elections of a Committee every 3 years. The organisation may apply to the Industrial Registrar to appoint a person to conduct elections other than the person referred to in the Act: Rule 26 ii) The election of an Executive Committee every 3 years from the members of the Committee: Rule 27 iii) The management affairs of the NMA to be vested in the Executive Committee or the officers of the Executive Committee subject to, inter alia, General meetings: Rule 28 iv) The Executive Committee shall meet at least once a year: Rule 38 v) There shall be General Meetings of members: Rule 49 vi) A General Meeting of members may be called by the President, Executive Committee, Committee or by a general meeting of members: Rule 50 vii) The keeping of proper accounting records, preparation of accounts, appointment of auditor and auditing of accounts: Rules 65 to 68. viii) For By-Laws of the Country Meatworks Association of New South Wales including elections and meetings: Schedule One to the Rules. ix) The dissolution of the organisation: Rule 84 9 The applicants led evidence, by affidavit, from the President, Neil Roberts and the Vice-President, Peter Hummerston. That evidence disclosed that the NMA had failed to comply with the aforementioned Rules or steps required of the organisation under the Act as follows: a) No elections had occurred since 2001. b) General meetings had not been called. c) There had not been conducted annual meetings and elections of the Country Meatworks Association, as prescribed in the By-Laws of the NMA since at least 2002. d) The annual audited accounts for the period ended 2004 and 2005 were filed late. 10 It was submitted that these failures constituted invalidities in the management and administration of the NMA as well as elections in the organisation all of which had occurred since 2002.

11 The evidence deposed by the President and Vice President of the NMA, as to why the invalidities had occurred, explained that they were the result of inaction by the organisation and its officers because of substantially changed industry circumstances and out of date rules, and the absence of the NMA's executive officer due to ill health. Transitional arrangements concerning industrial bodies in the meat industry had meant that the attention of the officers in the NMA had been focused on establishing and organising the functions of the Federal Body, the AMIC, and this had caused the processes and functions of the NMA to 'get away' from its officers in recent years.

12 The applicant submitted that the Court should exercise its discretion to make orders which would rectify the invalidities of the NMA. The reasons given included that: a) In the meat industry, there was a body of employers who were still dependant on state industrial instruments and required representation under the state system through the NMA. b) The evidence had disclosed that the invalidities did not arise from deliberate acts or an attempt to mislead. They had occurred because of inadvertence on the part of the officers of the NMA who were not full time officers. In addition, the person who had primary responsibility for ensuring that the NMA complied with its rules, its Executive Director, had been absent through illness. It was also apparent that the amalgamation and organisation of the federal body had been the priority of the NMA's officers at the expense of the NMA's functions. c) Necessary steps had now been put in place to remedy matters. d) To not make the orders would be inconsistent with the objects of s 3(d) Industrial Relations Act concerning proper representation of industrial interests and hardly satisfactory. It would leave a void which would be undesirable and would not be in the best interests of some employers in the industry. e) To cancel the NMA would not be appropriate as the organisation continued to play an active role in the industrial sphere.

13 The applicant submitted that, on the evidence, there were no issues where a substantial injustice to any party arose. A notice had been served to NMA members and there had been no replies of note nor any objection to the NMA's present desired course. Nor were there any creditors to whom substantial injustice would be done or any other person or organisations who had a relevant interest. Consideration 14 The principles applicable to s 288 applications are found in Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151 where the Court stated (at [25]): 25 The provisions of s288 of the Act require the Court to firstly consider whether an invalidity has occurred, in a relevant respect, in an organisation before considering whether any orders should be made pursuant to s288(3). In particular, the Court is required to determine whether an invalidity has occurred in relation to the matters described in s288(1)(a), (b) or (c). These requirements represent, in my view, the jurisdictional prerequisites to the making of any orders pursuant to subss288(3) and (4). 15 Further applicable principles for applications of this nature were dealt with in Liquor, Hospitality and Miscellaneous Workers' Union, New South Wales Branch [2006] NSWIRComm 244, where the Court stated (at [13]): ...Having considered these authorities, the applicable principles can be summarised as follows:

(a) Section 288 of the Act requires the Court to firstly consider, as a jurisdictional prerequisite, whether an invalidity has occurred in relation to the matters described in s288(1)(a), (b) or (c) of the Act;

(b) the terms of s288(3) encompass any order rectifying the invalidity declared by the Court, negating and modifying the consequences in law of the invalidity and validating acts so that, in an appropriate case, the circumstances arising from the invalidity can be "put right" and the legal consequences of those circumstances changed;

(c) the discretion residing in the Court to declare such an invalidity is wide;

(c) in considering whether to exercise that discretion, the Court must have regard to the objects of the Act and orders that are made to enable the organisation to function and operate effectively and legally will assist in achieving these objects, in particular, the object in s3(d) of the Act. Other relevant factors include the circumstances in which the invalidity arose and the actions taken upon becoming aware of the invalidity;

(d) the discretion conferred under s288(3) of the Act is extended by the provisions of s288(4) which permits the Court, in circumstances where an order is made under s288(3), to give such ancillary or consequential directions as it considers appropriate; and

(e) the discretion of the Court is, however, constrained by s288(5), which prevents the Court from making an order pursuant to s288(3) unless the Court first satisfies itself that such an order would not do a substantial injustice to the organisation, any member or creditor of the organisation, or any person having dealings with the organisation.

16 In accordance with these principles the Court must resolve, on the application, before it: i) if there has been any invalidity. ii) whether the Court should exercise its discretion to make orders pursuant to s 288 of the Industrial Relations Act . iii) whether those orders would do substantial injustice to the organisation, members or creditors or person having dealings with the organisation. Has there been an invalidity?

17 It is plainly open on the evidence before the Court, for a finding to be made that invalidities had occurred in the management and administration of and the holding of elections in the NMA. 18 Since 2001 the NMA has failed to conduct elections for the Executive Committee and office bearers or conduct other elections, as and when required, in accordance with the Association's rules. 19 Further, the NMA has not lodged duly audited financial accounts for certain years and has failed to call or conduct meetings required under its rules since 2002. 20 Pursuant to s 288(2), of the Act, the Court determines that invalidities have occurred in the management and administration of the NMA and the elections within the NMA. Should the Court exercise its discretion to make orders pursuant to s 288(3)? 21 The making of declarations as to the existent of invalidities pursuant to s 288(1) establishes the jurisdictional basis upon which the Court may then proceed in the exercise of its discretion to make orders pursuant to s 288(3).

22 The authorities make clear that s 288(3) of the Act provides the Court with a wide discretion to determine the circumstances under which orders would be made to rectify the invalidities declared by the Court.

23 The following factors are relevant to the exercise of the Court's discretion in this matter: a) there were unfortunate circumstances and events that precluded the holding of elections during 2004 and thereafter. The NMA lost its executive officer due to ill health in 2002. Additionally the consuming administrative arrangements concerning the amalgamation of the federal industrial organisation affected the operation of the NMA, due to the dual membership of the NMA office holders. b) the invalidities did not arise because of mala fides of persons within the NMA. The Court considers that the NMA has pursued this application openly and has addressed the invalidities in good faith. c) on any scenario, the members of the NMA will continue to require representation of their industrial interests under the Act. There is a case for continuing representation of these bodies through the NMA or any new organisation which might replace it. d) to grant the orders sought by the applicants would be consistent with the objects of s 3(d) of the Industrial Relations Act as it would encourage the proposed application/registration (or part thereof) of a federal organisation as permitted. It would also encourage the participation in industrial relations by the NMA. e) it is likely that rectification of the invalidities would also allow those responsible within the NMA to call a general meeting and enable them to proceed in an effective and legal manner to implement actions to dissolve the organisation and re-register an appropriate organisation. 24 In view of these considerations, subject to dealing with the requirements of s 288(5), I consider that it is appropriate for the Court to make orders in this matter addressing the invalidities declared by the Court. The NMA has acted honestly in connection with the invalidities, the invalidities arose from inadvertence and addressing the invalidities would allow the NMA to function effectively and legally. Appropriate orders would also achieve the objects of the Act, in particular, the object contained in s 3(d) to encourage the responsible management of representative bodies of employees.

25 As to the form of the orders that the Court may make, the words of s 288(3) are sufficiently wide to encompass any order rectifying the invalidities declared by the Court and negating and modifying the consequences in law of the invalidities. In the present context, it is appropriate to deal with all aspects of the invalidities and, accordingly, it is appropriate for the Court to make orders: a) rectifying or causing to be rectified the invalidities found to have occurred. b) negating, modifying or causing to be modified the consequences in law of the invalidities found to have occurred by way of the determination under s 288. c) validating all acts, matters or things rendered invalid because of the invalidities found to exist pursuant to s 288.

26 To make orders of that nature would be appropriate in this case because to do so would 'put right' the invalidities so as to allow the orderly functioning of the NMA so that it can hold a General Meeting to discuss resolutions regarding its dissolution and re-registration Would the orders do a substantial injustice to the organisation, any member or creditor of the organisation, or any person having dealings with the organisation?

27 As required by s288(5), the Court must, before making any orders under s288(3), satisfy itself that such an order would not do a substantial injustice to the organisation, any member or creditor of the organisation, or any person having dealings with the organisation. 28 The Court is satisfied that no such injustice would arise in this case. In particular, the Court finds that there are no persons with financial interests or affected by any financial transaction that would suffer substantial injustice because of the proposed orders. The Court is satisfied that there are no proceedings outstanding or actions pending against the NMA and that those having any interest in the proceedings have been made aware of them. ORDERS

29 In all the circumstances, I consider that orders and directions shall be made pursuant to s 288(3) and (4). I have for the most part accepted the orders proposed by the NMA, save for the making of an order which will ensure the conduct of elections in the event that the officers of the NMA are unsuccessful in carrying the proposed dissolution resolution. 30 In Matter No 1293 of 2007, the Industrial Registrar conceded that, if a determination to cure any invalidities was made by the Court, then it would be appropriate for those proceedings to be dismissed. I shall make orders accordingly. 31 Accordingly, the Court makes the following orders effective from the date of this judgment: In Matter No 2056 of 2007

A. On the facts before it, the Court determines, declares and orders that invalidities have occurred in the management or administration of and elections in the National Meat Association of New South Wales ('the union').

B. That upon the basis of such invalidities, the Court, being satisfied that the following orders made do not do substantial injustice to the union or to any member or creditor of the union or to any person having dealings with the union, orders:

That Messrs B. Ashton, G. Edmonds, P. Hummerston, N. Roberts, R Stapleton, J. Woolridge,, C. Wright, and T. Wright continue in office to enable and allow the facilitation and calling and holding of a General Meeting of members, and

Messrs Hummerston and Roberts continue to hold the office of Secretary and President respectively for the purposes outlined in order 1 above, and

If such General Meeting decides upon dissolution of the union, all or any of the aforesaid named persons be allowed to take any necessary steps associated with such dissolution resolutions in accordance with rules of the union and any relevant legislation.

In the event that the General Meeting declines to make resolutions that would dissolve the union, the union shall hold elections within one month thereof in accordance with rules of the union and the Industrial Relations Act 1996.

That the actions of the union in filing audited accounts for the years ended 31 December 2004 and 2005 be validated.

That the union takes all necessary steps to file audited accounts for the years ended 31 December 2006 and 2007.

1. The proceedings in Matter No IRC 1293 of 2007 are dismissed by consent effective from 22 February 2008.

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