Re Australian Building Construction Employees and Builders Labourers Federation [1978] FCA 1

23 JANUARY, 1978 J.B. SWEENEY J. REASONS FOR JUDGMENT

These are two inquiries into elections held in the Australian Building Construction Employees and Builders Labourers Federation ("the Federation"). The elections are those for the offices of General Secretary and for Trustee and Federal Vice-President. In each case application was made to the Registrar pursuant to s.159 of the Act who, being satisfied as required under s.160, referred the matters to the Court. Mr. Enderby Q.C. and Mr. Manser appeared for the three applicants and Mr. Ryan for the Federation and for each of the successful candidates.

The first application is by Mr. B.V. Rix. It appears that Mr. Rix lodged on 7 July, 1977 a nomination for the position of General Secretary which admittedly was in time. The Returning Officer did not reject this

It is now submitted that the nomination was_ not valid because, at the time of nomination, Mr. Rix and his two nominators were not financial members. Their financial standing depends on questions arising | as to a levy purported to be imposed in November, 1974,

same office on 8 July, 1977. 'This nomination was rejected

,by the Returning Officer on the ground that it was not

'lodged within time. It is now further submitted that the nomination was invalid because Rix and the two nom- inators were not financial members of the Federation, Regulation 146AE(ii) was obeyed in dealing with this nomination in respect of the first ground but not the

The second inquiry is one sought jointly by Mr. Reginald Mason and Mr. Noel Olive who nominated for the positions of Trustee and Federal vice-president respectively. Their nominations were forwarded on

8 July, 1977 and it is submitted that they were not received in time. It is further submitted that the nominations were invalid because each nominator and each of the persons nominated was unfinancial within the Federation by reason of the date of payment of the levy to which reference has already been made. Both Olive and Mason were advised by the Returning officer

of the rejection of their nomination on the ground that

This being an inquiry into an election, all parties are entitled to raise issues as to irregularities, whether these matters were raised or were before the Registrar or not. Consequently they involve considera- tion of the rules concerning elections and of the rules concerning the imposition of levies and the financial status of members.

The organisation was de-registered on 21 June, 1974 and thereafter was a voluntary associa- tion. It was registered on a fresh application on 7 October, 1976.

I deal first with the question of the finan- cial status of the three applicants and their nominators. The, rules require that a person nominating for one of the relevant offices and his nominators must at the point of nomination have been continuously financial within the Federation for a period of two years.

The financial standing of these persons dep- ends on the view taken of the validity of the impos- ition of a levy in November, 1974. At the time when the levy was imposed, the Federation was de-registered as an organisation but it was functioning as a voluntary association with the same rules as it had had previously. These rules (Rule 8(m)) give power to the Federal Council "to impose levies upon any one or more Branches or upon the members or any specified category of the

members or any one or more Branches or of the Union.

Provided that no member shall be liable to pay levies" to an amount of more' than $20 in any one year",

Under the rules, the supreme control of the union is vested in the members of the union. Subject thereto, that supreme control is to be exercised on behalf of the members by the Federal Council, which has very important general powers in addition to the ,Specific power to impose levies in Rule 8(m). The Federal Council is to meet at least once in November of each year and on other occasions when specific powers for it to be called together are exercised. The rules contemplate the election of delegates from each branch, the number of delegates from each branch being in approximate relationship to the number of menbers in the branch. Agenda papers are to be prep- ared and submitted to the Council. Each branch of the Federation is to receive a copy of the agenda paper. The rules then provide that delegates to the Federal Council must vote in accordance with the instructions of their branch on all matters contained in the agenda paper.

It is common ground that the question of a levy did not appear on the agenda paper and hence a

be sufficient to impose the levy. Reliance is placed

on Rule 8(4) which reads "Federal Council, when assembled,

May arrive at a decision which is not on the agenda,

such decision to be endorsed by the majority of the branches".

There must then be a decision, imposing a levy, reached by the Federal Council when assembled and such decision must be endorsed by the majority of branches for it to be effective and operate.

;was a meeting of the Federal Council on 26 November,

It was submitted that the meeting was invalid because delegates from the New South Wales Branch were

not present and that in addition a copy of the agenda

• was not forwarded to the New South Wales Branch. The

evidence on this latter aspect is slight. There is evidence that a copy was despatched, addressed to the executive and members of the New South Wales Branch at tremises at Trades Hall, Sydney. It is claimed that these premises at the time were occupied by a

Ge facto New South Wales branch of the Federation and not by the de jure branch. In addition, Mr. Owens, the then secretary of the New South Wales Branch, gave evidence that he did not see the agenda. There is no evidence before me showing why New South Wales delegates were not present. I am not prepared to hold on this evidence that the meeting of 26 November, 1974 was not a meeting of the Federal Council or that proceedings were invalidated by the absence of New

South Wales Delegates. At the Federal Council meeting

a quorum was clearly present. It was moved at the meeting

"hat after considering the financial position of the Federation brought about by the inter- vention into New South Wales, this Federal Council immediately place two $4.00 levies on all members (not honorary, retired members)

for the periods beginning the lst April 1975 and the lst September 1975. If branches having administration problems in collecting such levy, they shall immediately advance to the Federation the approximate amount expected to be collected for such levy."

An amendment was moved in the following terms; "That a $4.00 levy called the Federation Rehabilitation Fund be imposed on all members of the Federation. This levy shall be imposed for two terms commencing with the terms starting lst April 1975. Because of the need for immed- date finance, the victorian Branch shall make an

' immediate advance payment of $30,000 to this fund, to be repaid during the currency of the

levy." it appears that the original motion was first put and lost and that the amendment was then put and carried. The question is whether in carrying that resolution there was an effective exercise of the power to impose a levy. The procedure adopted appears to be contrary to the standing orders set out in paragraph 8 of the Rules of Debate. However I do not regard this rule as mandatory and in the light of the fact that both matters were before the Council and that the final motion was carried unanimously, I think that if this rule applies to meetings of the Federal Council, it

It will be noted that the original motion imposed two $4 levies. Secondly, it exempted from payment of the levies honorary, retired members. Thirdly, it imposed the levies for the periods begin- ning 1 April, 1975 and 1 September, 1975. Fourthly, it made provision for branches to advance to the Federation amounts expected to be collected. The

, amendment imposed a $4 levy. Secondly, it was imposed on all members not excluding honorary, retired members. Thirdly, the levy was imposed for two terms commencing with the term starting 1 April, 1975. Fourthly, provision was made for the Victorian Branch to make an immediate advance payment to be repaid @uring the currency of the levy.

7 There are no definitions in the rules of the words "terms" or "periods" and the general scheme of the rules affords no assistance in determining wrat they are. :

It was put by Mr. Ryan, who argued the case for the Federation with marked ability, that both the words refer to two six monthly periods, but this cannot be so. In the original motion the periods were referred to as beginning 1 April, 1975 and 1 September, 1975. It would appear that the first period ended when the second began, and if this were

Other payments due under the rules are subscriptions which are payable either half-yearly

• was carried, each calendar year was divided into two

six monthly intervals, the first half year to 30 June and the second from 1 July to 31 December. Contributions in respect of the first half year were payable in the preceding December and for the second half year were "payable during the preceding June. The other payments required to be made were the entrance fees which must be paid prior to the person becoming a member.

"periods". : Under the definition rules of the union, it is provided that

"In the interpretation of these rules the following definitions shall be taken as a guide

(a) 'Pinancial member' means a member who has paid all moneys payable under these rules and is entitled to the full benefits of the Federation."

The effect of non payment within the allowed time is that the member becomes unfinancial. He loses, among other things, his right to transfer to other branches, his right to stand for office and his right

to vote. His right to vote may be restored on payment

broken then he is not eligible to stand for office until he has again qualified himself by a period of two years continuous financial membership. In these circumstances it is necessary for a levy to be imposed with reasonable certainty as to the amount of the levy and the point at which payment must be made to the Federation. I agree that it is proper in attempting to construe the resolution ultimately carried to have regard to the first resolution. Moreover, a resolution of a Council of a union is not to be con- strued with the same approach as a Statute drawn by

• skilled draftsmen or documents drawn by lawyers. The skills of builders labourers are not to be found primarily in their methods of dealing with words. So, for example, a change in words should not be inter- pre:od as showing an intention to change meanings. The imposition of a levy is a matter of importance to the organisation and its members and is not something to be held invalid for mere technical problems. What then was meant by the resolution? I think it clear there was an intention to impose what may be called a levy of $8 payable in two instalments or two levies of $4 payable in consec- utive periods. I have already referred to the fact that each calendar year is divided into periods of

each such period. Other rules dealing with financial - matters seem to adopt six monthly periods as the relevant division of a year. See Rule 6(h), 6(4)(i), 6(j)(v), 11(i)(e), 13 and Branch Rule 9.

The relevant terms then are 1 April, 1975 to 30 september, 1975 and 1 October, 1975 to 31 March, 1976.

"it could not be thought that the levy was payable in

advance. Since the Council was acting under Rule 8(4) the resolution became effective when endorsed by four branches and this would not be known for some time.

It would be an impossible interpretation of the resolution that immediately on such endorsement the levy .became payable, that those who had not then

paid, owed monies to the Federation and had conse- quently lost their continuous financial status.

It was submitted that assistance was to be gained by seeing how participants at the Federal Council meeting in their subsequent reports to branches interpreted the obligation. But there is no uniformity here.

In Western Australia, the first report was that one Jevy had been imposed. The Tasmanian Branch report was that the $4 levy applied from 1 April, 1975 to 30 September, 1975 and from 1 October, 1975 to

"4 dollar rehabilitation levy" and there is no other detail.

These divergent views of. the effect of the resolutions, even if relevant, which I strongly doubt, do not assist the respondents.

, I have therefore concluded that there was a meeting of Federal Council and that it reached a decision to impose a levy payable as to $4 within the periods 1 April, 1975 to 30 September, 1975. Admittedly in the case of each candidate and perhaps his nominators the payment was not made until 30 October, 1975.

The decision made by the Federal Council when assembled was an exercise of its power to* impose levies and not invalid because of uncertainty. It was neces- sary that it be endorsed by the majority of the branches for it to become a binding resolution. Rule 8 is prop- erly to be regarded as a rule providing two metho3js w. = -eby there may be valid decisions of the Federal Council. So far as rule 8(4) is concerned, having regara to the subject dealt with, which may be any matter at all within the powers of the Federal Council, the rule 1s properly to be regarded as mandatory. I am fortified in this view by the jecision of the Supreme Court of New South Wales in Makin v. Gallagher (1974) 2 N.S.W.L.R. 559 at 573 where Holland J. said of this rule:

"To dispense with both an agenda paper before a council meeting, and with branch endorsement

after, could disenfranchise the members in whom the ultimate authority behind council decisions is intended to reside. In my opinion, one or the other was intended to be a necessary condition of-a valid decision ef any meeting of the Federal] Council and it would not be correct to look on the agenda rules as only directory."

There were at the time seven branches of the Federation, the Queensland, New South Wales, victorian, South Australian, Western Australian,

*'pasmanian and A.C.T. Branches. No meeting was held of the New South Wales Branch and it is not suggested that there-was any endorsement by it. 'The question is whether the evidence shows an endorsement by four of the six other branches.

There is no necessary formula to be fol- lowed in endorsement but it seems quite clear to me that some positive action is needed. There cannot, ~ for example, be an endorsement by a mere acquiescence or by a mere failure to object to the decision. The relevant dictionary meanings of the word "endorse" are "to confirm or to declare one's approval". 'The

endorsement must be an expression of the will of the

branch, part of the voluntary association, and having

regard to the fact that the rules place supreme control

in the hands of the members, the provisions for members

participation in consideration of the agenda paper, I am of opinion that the endorsement must be by the

Indeed the contrary view was not argued. There mst in my view be a resolution because the endorsement by a majority of branches would, one would think, necessarily be spread over some period and the point at which the majority of branches had endorsed the decision would have to be ascertainable to determine when the rights of members and the duties of members , to pay the levy arose.

, In the case of the victorian Branch, the procedure adopted was that a report was given to a meeting of the executive which then endorsed the decision. A like report appears to have been given

to a subsequent general meeting of members and that

"Following some questions on the reports asked by the members Comrade Wallace moved, J. Masterson seconded, that that section of the executive report endorsing the federal rehabilitation levy, the advance

payment of $30,000 to the Federation and the increase in union contributions be endorsed by the general meeting"

That .resolution was carried. Mr. Wallace, the Assistant

Secretary of the victorian Branch, who gave evidence,

said that when he returned from the Federal Council

meeting he was aware there had to be an endorsement and

in his view the procedure followed by the victorian

Similar action was taken in having the matter placed before a general meeting of the Queensland Branch. The minutes of that meeting as corrected record:

"vy. Dobinson then moved that this branch endorse the Federation's action in placing a $4 levy on members in the next two half year periods"

In South Australia the secretary of the branch reported to a meeting of the executive of that branch on the meeting of the Federal Council. A resolution was carried receiving and adopting his report. A subsequent general meeting received and accépted the minutes of the executive meeting. It then carried a resolution in the following terms from the minutes:

"It was moved J. O'Mally, seconded J. Coady, that the branch will carry the levy of $4 for the first six months if finances allow"

It was submitted that it was beyond the power of the branch to so decide and secondly that when a levy had been_ placed on members it was not a discharge of the members' liability if the payment of the levy was made by the branch or some person or body other than the member. I do not accept either

member's liability should not be discharged by, for

example, a payment by some other member or a payment by his employer. Equally I think it was within the power of the branch to resolve as "it did and that the resolutions of the Federal Council dealt with above cannot be regarded as negativing the power of

• a branch to make the payments on behalf of its members.

in South Australia does not amount to an endorsement. I do not think that the executive committee was able -to endorse the decision but in my view it was a matter : for the members of the branch in general meeting. The , general meeting carried a resolution receiving and accepting the minutes of the prior executive meeting which in its turn had carried a resolution receiving and adopting the Secretary's report of the Federal Council. In his well known text book dealing with law and procedure at meetings, Joske J. has said:

. business of a meeting is usually the reading and putting a question for the confirmation of the minutes of the proceedings at the previous meeting. Sometimes it is moved that the minutes be taken as read, though this is not desirable unless they have been previously circulated amongst members. Confirmation of minutes (whether called confirmation or adoption) only vouches for their accuracy as a record of proceedings. It in no way gives any effect to a decision previously made, nor is there any need for such a decision to be approved. Consequently the only discussion that can be permitted on the motion for con- firmation of the minutes is as to their

to set out the position with reports as well as *minutes and the adoption, whether called adoption or acceptance, does no more than accept the accuracy as a report. JI am unable then to treat either the res- "olution of the executive or the subsequent resolution of the general meeting as a confirmation. That posi- tion in my view is not altered by the resolution then carried providing that the branch should carry the levy of $4 for the first six months. That resolution is consistent with the approval of one levy of $4 only, the approval of two levies each of $4 payable in eack of two periods of siy months or a belief that the Sranch and its members were bound by the decision and k2ed no right to confirm or otherwise. It could_ only eccept it and a decision not inconsistent with it c= varying it. When the resolution is capable of a@ mumder of interpretations, each of which would clea=-v be within the branch's power to adopt, it is

In Western Australia the evidence shows that on 26 November, 1974 the Acting Secretary reported that the Federal Council had struck a $4 levy to operate as from 1 April, 1975. The report does not appear to have been received, accepted or adopted. A further meeting of the executive was held on 3 December, 1974. Under the heading "Reports" it is recorded that both the President and Secretary gave reports on the Federal Council meeting. It was then recorded that a number of points were raised and much discussion took place around this matter. The reports appear to have been neither received, accepted or adopted. A general meeting of members was held on 10 December, 1974. 'The minutes record that the Secretary reported on a number of matters at the Federal Council meeting. His oral evidence was that at the meeting he made a mention of the levy. No motion was moved or dealt with concerning the report or the levy. It is quite clear that the evidence does not show any endorsement of the decision by the Western Australian Branch.

A.C.T. Branch. The evidence showed a general meeting held on 25 February, 1975. At it a resolution was moved "that correspondence be admitted" and a further resolution was carried "that

also record that a resolution was moved and seconded that "the question of a $4 subscription rehabilitation levy be circulated to all B.L.s in A.C.T. and discussed on a next general meeting". It was lost. The defeat of a resolution to adjourn discussion obviously does not carry with it the implication that by reason of

}evy. I am satisfied that the A.c.T. did not endorse the decision. In Tasmania the evidence here is that a general meeting of members was held on 17 December,

. 1974, The minutes record that the Secretary reported on a number of matters including the Federal Council meeting in Sydney and in what appears to be a report there appears this "now re the $4 Federal rehabilita- tion levy. That will applies (sic) to all members of our Federation from lst April, 1975 to 30th September, 1975 and lst October, 1975 to 3lst March, 1976." The minutes do not record any resolution dealing with that subject matter and the Secretary did not give evidence of any resolution. I am of the opinion that what happened in Tasmania does not amount to a con- firmation of the resolution.

endorsed in Victoria and Queensland. It was not en-

dorsed in the other four states and consequently the

resolution had not at the relevant times been carried.

At the time of nomination, the applicants admittedly had two years financial membership unless this was broken by the fact that neither they nor their seconders paid the amounts of the levies until October, 1975. Since I have held that on the two grounds discussed levies were not validly imposed, 'it follows that all the applicants were financial, as

It is not disputed that Rix's nomination of 7 July, 1977 was in time. Difficulties arise however with regard to his second nomination and those of Olive and Mason. The rules at the time of the elec- tion, subsequent to the registration of the organisa- tion in October of 1976, were in somewhat different form from the earlier rules.

So far as the ballot is concerned, rule 9A provided that the Federal Management Committee should appoint a Federal Returning Officer not later than the 30th day of July in each election year. The Returning Officer was not to be the holder of any other office or an employee of the Federation or a branch. Rule 9A(ii) to (vi) then provided:

for nominations for election to each of the offices referred to in Rule 9 hereof

from financial members of the Federation who shall' have been bona fide financial members of the Federation continuously for not less than two years immediately prior to their nomination. Each nomina- tion shall be in writing and signed by the candidate and a proposer and seconder each of whom shall have the same qualifi- cations as are required by this Rule for a candidate.

(iii) The Federal Returning Officer shall call for nominations pursuant to this Rule by an advertisement in a daily newspaper circulating in each State.

(iv) No person shall nominate for more than one of the offices referred to in Rule 9 hereof, .

(v) The Federal Returning Officer shall determine in respect of each nomination whether it should be accepted or rejected.

(vi) If the Federal Returning Officer finds a nomination to be defective he shall, before rejecting such nomination notify

him the opportunity of remedying the defect within not less than seven days after his being so notified.

Nominations were called by an advertisement inserted in the "Australian" aewspaper in the issue of 20 June, 1977. This advertisement provided that nominations ... shall close at 5 p.m. on Friday, July 8, 1977 and provided further that nominations . were to be forwarded to the Returning Officer, Mr. Masterson, care of G.P.O. Box No. 4494, Melbourne, 3001. There was no obligation under the rules or the regula- tions to use a post office box for receipt of nominations. The evidence is that Messrs. Olive and Mason

first learned of the date of the election on 5 July,

1977. I see no reason to doubt this and, indeed, while it was a compliance with the letter of the rule, it does seem that the insertion of an adver- tisement in the Saturday edition of the "Australian" was not the method best designed to ensure wide knowledge among the members of the election. It is notorious that this newspaper has a circulation ylower than many other daily newspapers and that its receipt in some parts of Australia is markedly later than that of daily newspapers printed in various other cities or towns in those parts. On 6 July, the two men obtained nomination forms from the office of the New South Wales Branch of the union and they completed the nomination forms on the 7th. In the meantime, Mr. Rix had some misgivings about the validity of his first nomination and he therefore completed a second nomination which was ready for despatch on 8 July.

Arrangements were then made by them and Mr. Rix to send the nomination forms by T.A.A. to Melbourne on 8 July, 1977 where they would be picked up and posted at the Melbourne G.P.O. This was done and they were posted at about 2.30 p.m. on the 8th. Mr. Masterson's evidence is that they were not in the box when he examined it after 5 p.m. on 8 July

The difficulty appears to have arisen by the system in use at the G.P.0., Melbourne. When boxes are sought for the purpose of a union election, what is allocated is in fact a mail bag which is kept at the Central Mail Exchange, some half mile away from the G.P.0O., Melbourne. Mail posted to the mail box at least at the G.P.O. Melbourne has to be col- rected, sorted and transmitted to the Central Mail Exchange for insertion in the bag allocated for the particular election. The evidence before me does not Gisclose whether this type of problem exists in other areas. It does not disclose the latest time at which an article posted to an address of a box number at the G.P.0., Melbourne would reach that box nor does it disclose that information in respect of boxes at other post offices. I have no way of knowing whether this difficulty arose purely because of the arrange- ments at Melbourne or whether it is common to the postal system.

I have no evidence before me to show at what time a postal article posted at a post office where a box was hired would in the ordinary course of events be placed in the box. An affidavit by Mr. Horne, an officer of the Australian Postal Commission, shows that it was almost impossible for

an article of mail addressed to the relevant box at

the G.P.O. to have been collected, sorted and trans- mitted to the box by 5 p.m. on that day.

That being so, it cannot be claimed that the nominations were posted in such time that in the ordinary course they would have been received by the closing time. That being so, I think the test is

whether they were so received, and clearly they were

In these circumstances, I think that the fact that the articles had not been delivered to the box specified by 5 p.m. on 8 July is fatal and I am of the opinion that the nominations of Messrs. Olive and Mason and the second nomination 'of Mr. Rix were out of time.

A further irregularity alleged is that Mr. Masterson, the Returning Officer, was an employee of the Federation at the time of appointment. His evidence is that he was not. He had been an organiser of the victorian Branch but had retired in August, 1976. Thereafter he was employed at times to relieve other members of the staff but was not so employed when appointed.

I accept Mr. Masterson's evidence and find there was

) In the case of the applications by Mr. Olive and Mr. Mason, it follows from my findings that they did not lodge a nomination prior to the closing date and that the nomination of each was rejected for this reason. In these two cases, no irregularity occurred. : In the case of Mr. Rix, his nomination of 7 July, 1977 clearly within time, was rejected on the ground that he and his nominators were unfinancial by reason of their failure to pay the levy referred to on or before 30 September, 1975. It follows from my finding that there was no such obligation and in these circumstances the rejection of the nomination was an irregularity. The result of the irregularity was that no election was conducted. It is beyond question that the result of the election may have been affected by such irregularity. "the question then arises of the appropriate orders.

I propose to make an order declaring the election of Mr. Gallagher to be void and a further order directing the Industrial Registrar either to make arrangements for a new election or for the steps on and from receipt of the nominations to be taken to hold an election. If necessary, I will provide

A further question seems to me to arise whether it would be appropriate for action to be taken under s.171 in respect of the levy. I have formed no opinion as to this, either as to my jurisdiction so to do or the propriety.

The course I propose to take is, having announced the orders I now contemplate, to adjourn the further hearing to an appropriate date to allow