Re Construction, Forestry, Mining Energy Union; Ex parte WJ Deane & Sons Pty Ltd [1994] HCA 53

The finding of dispute arose out of the service on the prosecutors of a letter of demand dated 14 March 1991 signed by an officer of each of five national unions of employees on behalf of each of the respective unions. One officer was the National Secretary of his union, another was the Assistant General Secretary, yet another the Secretary and the remaining two officers were the Federal Secretaries of their respective unions. The letter of demand, which was expressed to be made jointly and severally on behalf of the five unions, required acceptance within seven days of a log of claims which accompanied the letter. The prosecutors did not accept the log of claims within seven days or at all. Following a notification of dispute dated 1 May 1991, signed by Mr. Fowler, the national industrial officer of one of the five unions, under s. 99 of the Industrial Relations Act 1988 Cth ("the Act"), Commissioner Grimshaw found that an industrial dispute existed between the unions and the prosecutors extending beyond the limits of one State. He directed the parties to confer, reserving the rights of parties desiring to present argument pursuant to s. 111(1)(g) of the Act.

On 10 October 1991, the Commission made an award known as the National Building and Construction Industry Roping-in No. 2 Award 1991, reserving liberty to the Newcastle Master Builders Association ("the Association"), which evidently represented the prosecutors, to present s. 111(1)(g) arguments on a date to be arranged. When the proceedings next came on for hearing, counsel for the Association argued that the Commission should exercise its discretionary power under s. 111(1)(g) of the Act to refrain from further proceedings against the Association. The Association had caused summonses to be issued against the five unions seeking documentation, resolutions and any other matter relating to the case. Each summons was returned with the statement that the organization did not have in its possession any documentation of the kind referred to in the summons which related to the proceeding and "to employers represented by" the Association. On the basis of this statement and other matters, the Association sought revocation of the earlier finding of dispute.

Commissioner Grimshaw dealt with the application for revocation as follows:

The unions' letter of demand and log of claims dated 14 March 1991 needs to be examined closely. Firstly it is signed by the national leaders of the unions, secondly it states "by direction of" and cites the decision making body of each organisation, thirdly it declares the demands as being made jointly and severally. On the evidence presented in this case the only question arising from [the letter of demand and the log of claims] is did the executive bodies of the unions authorize Mr. Fowler to execute proceedings on their behalf - if authorization was decreed why was it not produced as required by rule 13(2)(e) and/or by the information sought through the issue of summonses, leaving little alternative but to conclude that the requirements of the Act have not technically speaking been carried out, however such a deficiency is, I think, of such minor proportions that it would be a greater contravention of the Act not to use the discretion provided by rule 5 [under the Act] to waive the requirements of rule 13(2)(e) on this occasion.

The Commissioner waived the requirements of r. 13(2)(e) and dismissed the application made pursuant to s. 111(1)(g). Although the Commissioner did not expressly say so, his decision must be understood as dismissing the application for revocation.

Rule 13(2) of the Rules of the Australian Industrial Relations Commission 1989 Cth provides that a notification of an industrial dispute under s. 99 of the Act:

(e) a statement by an officer having knowledge of the facts and authorised for the purpose by the committee of management of the organisation serving the log of claims, that the letter of demand and log were served with the authority of the organisation.

It seems that an argument was put that r. 13(2)(e) required a statement by an officer of each of the five unions. This may have led Commissioner Grimshaw to confuse authorization of Mr. Fowler by all the unions to notify the existence of the dispute with authorization by each union of the service of the letter of demand and the log of claims. Rule 5 enables the Commissioner to dispense with compliance with any of the requirements of the rules, either before or after the occasion for compliance arises. The exercise of the power to waive could excuse non-compliance with r. 13(2), but it could not cure any absence of authority to make a demand on behalf of one or more of the unions.

The prosecutors' appeal to a Full Bench against Commissioner Grimshaw's decisions was dismissed. The Full Bench saw the appeal as raising the jurisdictional question whether there was in existence a real and genuine dispute. The Full Bench approached the jurisdictional question on the basis that there was a prima facie presumption that the demands for acceptance of the log of claims were regularly made and that, accordingly, it was for the employers to establish that the demands were not validly made. Because, according to the evidence, there was no record of a decision by any relevant authority in any of the unions to authorize service of the demands, it could be inferred that evidence did not exist which would establish that they were properly authorized. However, the Full Bench considered that the proper body of each union could adopt a resolution to ratify the demands which had been made. In order to allow the unions to take that course, the matter was adjourned so that they could produce evidence to establish that the relevant demands were properly authorized or, alternatively, to produce evidence that the proper body in each case had ratified the action taken on its behalf. The Full Bench indicated it would dismiss the appeal if such evidence were received. On 23 July 1993, on the production of such evidence, the Full Bench dismissed the appeal.

The prosecutors submit that, in order to create an industrial dispute by means of non-acceptance of a log of claims put forward pursuant to a letter of demand by a union, it is necessary that the demand for compliance with the log of claims should be made with the authority of the union; in other words, the demand must be authorized by the union. The prosecutors further submit that later ratification is of no effect. The issue, according to the prosecutors, is whether the demand was authorized when it was made because the jurisdiction of the Commission depends upon the existence of an industrial dispute extending beyond the limits of one State at the time when the Commission found the dispute to exist. The respondent, the Construction Forestry Mining Energy Union, does not accept this argument and maintains that, in any event, an industrial dispute of the requisite kind came into existence by reason of the opposition of the prosecutors to the case presented by the five unions before the Commission, following notification of the dispute on 1 May 1991.

In his written outline of submissions, Mr. Rothman of counsel advanced some plainly untenable arguments which he did not support or supported only faintly in oral argument. The suggestion that the terms of the summonses, the answers thereto and the absence of evidence from the unions of any authorization, general or specific, for the service of the letter of demand do not justify an inference of absence of authority is without any substance. So too is the argument that absence of authority is a matter of internal management only [1] and cannot be relied upon by a third party, as is the related contention that only the members of the organization can litigate such a question.

1. As it might be if the controversy were confined to a union and some of its members: see Hodgson v National and Local Government Officers Association , [1972] 1 W.L.R. 130; [1972] 1 All E.R. 15.

The issues for decision are: (1) the effect of the subsequent ratification in "validating" the dispute which would have arisen from the non-acceptance of the demands had they been made with authority; (2) whether, in the light of what happened before the Commission, there was evidence of an industrial dispute extending beyond the limits of one State which gave the Commission jurisdiction to proceed to the making of an award in settlement of such a dispute; and (3) whether the circumstances are such as to justify the Court in withholding relief by way of prohibition.

The effect of subsequent ratification in relation to non-acceptance of a demand made without authority must be considered in the light of the fundamental proposition that the jurisdiction of the Commission to settle and prevent interstate industrial disputes by conciliation and arbitration under s. 51(xxxv) of the Constitution depends upon the existence of such a dispute [2] . The expression "industrial dispute" is defined in s. 4 of the Act. Thus, it includes (a) "a threatened, impending or probable industrial dispute", so long as it extends beyond the limits of any one State and "is about matters pertaining to the relationship between employers and employees". It also includes (b) "a situation that is likely to give rise to an industrial dispute of the kind referred to in paragraph (a)". Here no question arises of a threatened, impending or probable dispute or of a situation described in par. (b) of the definition. That is because the only basis for jurisdiction invoked by the unions was the artificial paper dispute alleged to arise from the non-acceptance of the log of claims. There is no suggestion of a threatened, impending or probable dispute apart from that paper dispute. Nor is there any suggestion of an underlying industrial situation likely to give rise to an industrial dispute.

1. R. v Commonwealth Court of Conciliation and Arbitration and Merchant Service Guild of Australasia (1912), 15 C.L.R. 586, at pp. 602, 606.

There is authority for the proposition that, where an act is done in the name of or on behalf of another ("the principal") by a person who has no authority to do that act, the principal, by ratifying the act, may make it as valid and effectual as if it had been originally done with the principal's authority, whether the person doing the act was exceeding his or her authority or had no authority at all [3] . Central to the proposition is the retrospective or retroactive effect of the ratification [4] ; the act done is put in the same position as if it had been authorized antecedently. On the other hand, it has been held that where the act done without authority would, if done with authority, affect property rights, as in the case of a notice to quit, subsequent ratification will not be effective [5] . The reasons given for this view do not always coincide. In the final analysis, ratification in these cases does not operate retroactively because the act is required to be valid and effective when it is done. That is the case with a notice to quit.

1. Reynolds, Bowstead on Agency, 15th ed. (1985), p. 55; Wilson v Tumman (1843), 6 Man. & G. 236, at p. 242, per Tindal C.J. [ 134 E.R. 879, at p. 882]. 2. Koenigsblatt v Sweet , [1923] 2 Ch. 314, at p. 325, per Lord Sterndale M.R.; Boston Deep Sea Fishing & Ice Co. Ltd. v Farnham (Inspector of Taxes) , [1957] 1 W.L.R. 1051, at p. 1057; [1957] 3 All E.R. 204, at p. 209. 3. Right v Cuthell (1804), 5 East 491, at p. 498 [102 E.R. 1158, at p. 1161]; Doe v Walters (1830), 10 B. & C. 626 [109 E.R. 583]; Reynolds, op. cit., at pp. 55, 80.

And, in our view, so it is with a letter of demand requiring acceptance of a log of claims, if non-acceptance of the log within a stipulated period after the making of the demand is to constitute an industrial dispute. Here what is in question is not merely the validity of a notice to quit, but the existence of the jurisdiction of the Commission. Once it is accepted, as it must be, that jurisdiction depends upon the existence of a dispute and the dispute is said to be constituted by non-acceptance within seven days of the service of the log of claims, the existence of the dispute is conditioned upon the making of a valid demand, that is, a demand that was valid and effective at the time when it was made. What is more, there is much to be said for the view that the concept of the paper dispute proceeds upon the theory that the demand is properly authorized when it is made. Rule 13(2) supports that view of the matter. In the light of that rule, it would be strange indeed if, despite the absence of authority of the organization at the time of service of the letter of demand and the log, the Commission were to acquire jurisdiction by reason of subsequent ratification of that service. It would mean that a dispute existed, notwithstanding that the requisite documentation accompanying the notification of dispute failed to evidence the making of a valid and effective demand.

Mr. Rothman for the respondent union submits that an appeal to the Full Bench under s. 45 is by way of rehearing. Accepting that this seems to be so [6] , we do not consider that this leads to the conclusion that an industrial dispute of the requisite kind exists. The appeal to the Full Bench was against the finding of dispute made by Commissioner Grimshaw and his refusal to revoke that finding. His finding was based on the mistaken view that ratification operated retroactively to give validity and efficacy to the original demand so as to generate a dispute arising from non-acceptance at the expiration of seven days from service of the demand and the log. Once it is accepted that ratification does not operate retroactively, the demand for acceptance of the log within seven days of service is ineffective and meaningless. Indeed, the respondent seems not to have argued in the appeal to the Full Bench that a dispute other than that found by Commissioner Grimshaw had come into existence. Had such an argument been propounded, it would have been necessary to vary the finding of dispute under s. 101(1). In the absence of such a variation, the Commission was bound to proceed in accordance with the finding (s. 101(2)). Section 101(3) provides that a finding of the Commission on a question as to the existence of an industrial dispute is, in all courts and for all purposes, conclusive and binding on all persons affected by the question. Of course, that provision must be read subject to the limits of federal legislative power [7] .

1. Re Coldham; Ex parte Brideson [No. 2] (1990), 170 C.L.R. 267, at p. 272, per Deane, Gaudron and McHugh JJ. 2. See Zines, The High Court and the Constitution, 3rd ed. (1992), p. 207; Reg. v Portus; Ex parte McNeil (1961), 105 C.L.R. 537, at pp. 540-541.

Mr. Rothman further submits that, as the Commission can, at the instance of the parties or of its own motion after hearing argument and, if need be, additional evidence, vary the finding of dispute, prohibition should be refused. That was the course which this Court took in Reg. v Turbet; Ex parte Australian Building Construction Employees and Building Labourers' Federation [8] . But, in that case, the majority of the Court considered that there was in existence an industrial dispute extending beyond the limits of one State, though it had not been correctly identified or described in the finding of dispute. Here we are not persuaded on the materials before the Court that such a dispute exists.

It follows that the order nisi for prohibition and certiorari should be made absolute.