Re Musicians' Union of New South Wales [2008] NSWIRComm 133

Industrial Relations Act 1991 (NSW) Industrial Relations Act 1996 (NSW) LEGISLATION CITED: Industrial Relations (General) Regulation 1996 (NSW) Industrial Relations (General) Regulation 2001 (NSW) Workplace Relations Act 1996 (Cth)

Liquor, Hospitality and Miscellaneous Union, New South Wales Branch [2006] NSWIRComm 244 CASES CITED: Re Newcastle Master Builders Association [2007] NSWIRComm 57 Re Seamen's Union of Australia, New South Wales Branch [2001] NSWIRComm 151

HEARING DATES: 23 June 2008 and 24 June 2008

APPLICANT Mr R Ruhle Musicians' Union of New South Wales LEGAL REPRESENTATIVES: INTERVENOR Mr T Noone Musicians' Union of Australia

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

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

1 On 25 July 2007, George Michael Grimson, Industrial Registrar, filed a notice of motion seeking an order cancelling the registration of the Musicians' Union of New South Wales, an industrial organisation of employees, pursuant to s 225(1) of the Industrial Relations Act 1996 (NSW) ("the Act"). The grounds and reasons were that: (a) elections have not been conducted by the Musicians' Union of New South Wales in accordance with s 249 of the Act and clause 31 of the Industrial Relations (General) Regulation 2001; and (b) accounting records and other financial statements have not been lodged with the Industrial Registrar pursuant to s 282 of the Act.

2 Mr Grimson filed an affidavit in support of the notice of motion to which was annexed a Report by the Industrial Registrar to the Industrial Court of New South Wales pursuant to s 249(1) of the Act and cl 31 of the Industrial Relations (General) Regulation 1996 (NSW) ("the Regulation") dated 12 June 2007. 3 On 3 September 2007, the Musicians' Union of New South Wales ("the applicant organisation") made application pursuant to s 288 of the Act, firstly, for a declaration of invalidity in respect of the failure to comply with its rules and the Act concerning the election of office holders and terms of office due in 2005. Secondly, an invalidity in respect of the failure to prepare accounting records and other financial statements and thirdly, the failure to provide particulars relating to office holders. This judgment deals with this application. 4 The applicant organisation sought the following orders: (2) (a) that the rules of the Union be altered to include a transitional rule to provide for an interim committee of management pending the conduct of a formal election of all Union office holders. (b) that the interim committee of management consist of the current members of the committee of management being the following persons: John Greenan John Conley Jim Piesse Leon Gaer Frederick Hill James Shaw (c) that this interim committee of management notify the Industrial Registry to call an election of all office holders to be conducted by the State Electoral Commission in accordance with the Industrial Relations Act 1996 and the rules of the Union; (d) that the interim committee of management takes all necessary steps to comply with the financial reporting requirements of the Industrial Relations Act 1996; (e) that the interim committee of management takes all necessary steps to comply with the provision of particulars of office holders required by the Industrial Act 1996 (sic); (f) that a special general meeting of the members is to be called in accordance with the rules of the Union to inform members of the Court's orders in this matter; (g) that decisions made by the committee of management and meetings of the Union up to the date of these orders be validated; (h) that the consequences in law resulting from the failure to call the election be negatived and rectified; (i) further orders as the Court sees fit. 5 Essentially, the grounds relied upon by the applicant organisation were that the acts sought to be validated were done in good faith by the committee of management and meetings of the applicant organisation and that, if granted, the orders will provide for the continued representation of musicians in New South Wales. Such orders, it was contended, will not do a substantial injustice to the organisation, any member or creditor of the organisation, or any person having dealings with the organisation. 6 Mr T Noone, Federal Secretary of the Musicians' Union of Australia, sought leave to intervene in the proceedings. This was not opposed by the applicant. Mr Noone submitted that the application should not be granted in the terms sought by the applicant organisation. Specifically, it was submitted that if the application was to be granted at all, proposed order 2(d) should be amended to include the following words: Save that it must seek the approval of the Federal Secretary of the Musicians' Union of Australia representing the MUA as a creditor of the Musicians' Union of New South Wales regarding the selection of an auditor. 7 Furthermore, it was submitted that the orders sought in paragraph (2)(b) should only be granted, if at all, if the powers of the interim committee of management were strictly limited to the activities described in proposed orders (2)(c), (2)(d) and (2)(e). 8 Mr Noone submitted that the orders sought in proposed orders (2)(f), (2)(g) and (2)(h) should not be granted. The Report of the Industrial Registrar 9 It is convenient, by way of background and where much of the material is common ground, to briefly refer to the Industrial Registrar's Report. The Industrial Registrar, after dealing with the relevant statutory provisions regarding the registration of the applicant organisation stated that on 9 May 2002, the applicant organisation changed its name from the Musicians' Union of Australia New South Wales District to its current name. The Industrial Registrar annexed a copy of the applicant organisation's rules and set out the relevant rule requiring election of officers and committee (r 15C(a)) and the relevant statutory provisions relating to financial accountability. 10 The Industrial Registrar stated that an election for all office bearers of the applicant organisation was due to be conducted in the year 2005. With the exception of the position of Secretary, the last election conducted in respect of all other office bearers was in 2003. On 18 August 2003, the State Electoral Office issued a declaration in respect to the candidates who had been elected unopposed. A vacancy remained in respect of the position of Treasurer. Seven committee members were elected. In respect of the position of Secretary, the Deputy Industrial Registrar, on 8 May 2002, approved an application lodged by the organisation on 24 October 2001 (under s 239 of the Act and r 15 of the applicant organisation's rules). 11 Mr Richard Ruhle, who, on 28 September 2001, was declared elected by the Australian Electoral Office as the Branch Secretary of the Musicians' Union of Australia, Sydney Branch ("the Federal counterpart Union"), being an organisation registered under the Workplace Relations Act 1996 (Cth), was taken as being validly elected to the corresponding office in the applicant organisation. 12 The Industrial Registrar stated that he had caused the records of the Industrial Registry to be searched and the last financial statements to be lodged on behalf of the organisation with the Industrial Registrar in compliance with the Act were for the financial year ended 30 June 2001. Those accounts showed that the organisation had 1,046 members and held assets of $151,919.93 at the end of the reporting period. The applicant organisation did file preliminary profit and loss statements for the financial years ended 30 June 2002 and 30 June 2003 with an undertaking that the completed audited financial statements would be filed by 30 June 2005. This undertaking has never been fulfilled. 13 Section 278 of the Act requires that each State organisation must lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders. Section 278(9) of the Act provides that if default is made in complying with the section, an organisation is guilty of an offence. 14 The Industrial Registrar stated that he had caused the records of the Industrial Registry to be searched and no record was found of any return by the organisation under s 278 since 21 February 2005. Correspondence had been forwarded to the applicant organisation from the Registry on a regular basis, reminding it of its various statutory obligations. 15 Notice of a change to the organisation's registered office was provided to the Industrial Registrar pursuant to s 244 of the Act by letter dated 19 December 2003. By letter dated 12 July 2004, the applicant organisation was advised that its rules would need to be altered to reflect a change in its registered office. As at the date of the Industrial Registrar's Report, the applicant organisation has not lodged an application to alter its rules (r 23) in respect of its registered office. 16 Attached to the Industrial Registrar's Report was a letter dated 22 May 2007 from Gibb McDougall Mercantile Agency Pty Ltd, Licensed Commercial Agents, acting on behalf of Nevets Investments Pty Ltd, who it alleged was owed $4,719 in rent by the applicant organisation. The company was notified of these proceedings and it appeared at a directions hearing. On 11 October 2007, it wrote to the Industrial Registrar enclosing a letter from the applicant organisation dated 4 October 2007 acknowledging the validity of the debt of $4,719. 17 The Industrial Registrar also annexed to his Report a letter dated 1 August 2006 from AJ Macken & Co., Australian Lawyers, acting on behalf of the Musicians' Union of Australia, which raised concerns regarding the purported transfer of assets and membership from the applicant organisation to the Media and Arts Alliance. This is a reference to the Federally registered organisation. The State registered organisation is known as the Media Entertainment and Arts Alliance, New South Wales. Statutory Provisions 18 The relevant statutory provisions are as follows:

225 Institution of proceedings for cancellation of registration (1) An industrial organisation or, with the leave of the Commission, a person who has a sufficient interest in the matter may apply to the Commission for the cancellation of the registration of an industrial organisation. (2) The Commission may institute proceedings under this Division on its own initiative. (3) An industrial organisation may apply for the cancellation of its own registration. (4) An industrial organisation must be given an opportunity to be heard by the Commission in any proceedings against the organisation under this Division. 226 Grounds on which registration may be cancelled The registration of an industrial organisation may be cancelled on any one or more of the following grounds:

(a) that the organisation, or a substantial number of its members, has or have contravened the industrial relations legislation, any industrial instrument, or any order of the Commission, (b) that the industrial organisation, or a substantial number of its members, has or have engaged in any industrial action that has had, is having or is likely to have, a substantial adverse effect on the safety, health or welfare of the community or a part of the community, (c) that the organisation or a substantial number of its members, has or have engaged in any industrial action that has had or is having a major and substantial adverse effect on the provision of any public service by the State or an authority of the State contrary to the public interest and without reasonable excuse, (d) that the industrial organisation was registered by mistake, (e) that the industrial organisation is no longer effectively representative of the members who are employees or employers, as the case requires, (f) that the organisation has applied for the cancellation of its own registration, (g) that the organisation is defunct, (h) in the case of a federal organisation - that the rules of the organisation (and any parent body) no longer confer on the organisation a reasonable degree of autonomy in the administration and control of New South Wales assets and in the determination of questions affecting solely or principally members resident in New South Wales. ... 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. The Applicant Organisation's Evidence 19 Mr R Ruhle, who appeared for the applicant organisation tendered affidavits of the following: Mr John Conley, who was appointed Acting Secretary on or about 23 March 2007 Mr John Greenan, President of the applicant organisation and the Federal counterpart Union on 7 October 2005 Mr Richard Ruhle, a former Secretary of the applicant organisation. Each was required for cross-examination 20 Mr Conley stated that he joined the applicant organisation and the Musicians' Union of Australia in 1975. He was appointed as a committee member on 30 November 2004. In about August 2006, he resigned as a member of the Musicians' Union of Australia. On or about 5 March 2007, Mr Conley stated he was contacted by Mr Richard Ruhle who asked him to consider nominating for the position of Acting Secretary of the applicant organisation, as Mr John Greenan was unable to continue in the position due to illness. He agreed to be nominated. Mr Conley stated that he was present at a special meeting of the applicant organisation held on 19 July 2006 when a motion was moved and carried that the applicant organisation endorses an amalgamation agreement with the Media Entertainment and Arts Alliance (sic) ("MEAA"). A similar motion had been carried on 30 May 2006. Mr Conley stated that he believed that, at all relevant times, he had acted in good faith and in accordance with the authorisation of general meetings of the applicant organisation. 21 During cross-examination, Mr Conley gave evidence that the applicant organisation had not conducted elections because the finances had got to a stage where the applicant organisation was running at a loss. He stated that its position was not getting better, that it was losing members and that the only way forward was to amalgamate with the MEAA. He stated the finances of the applicant organisation were such that, to have an election was beyond its means. He believed (incorrectly) that the cost of conducting an election would be in the vicinity of $1,500. Mr Conley's evidence was that he had seen the accounts of the applicant organisation but was not aware whether they had been audited or not. His evidence was that he resigned from the Musicians' Union of Australia in 2006 because it was no longer necessary for him to be a member of that organisation because he was going to become a member of the MEAA when the amalgamation of the State bodies occurred. 22 Mr Greenan stated that he joined the applicant organisation in 1957. In 1999 he was appointed as a committee member of the Musicians' Union of Australia, New South Wales District and the Federal counterpart Union. Mr Greenan was aware that the applicant organisation had been involved in discussions with the MEAA regarding a possible amalgamation. He stated at a meeting of the applicant organisation on 4 September 2002, he moved a motion that the committee support the concept of an amalgamation with MEAA. He moved a similar motion at a meeting on 13 November 2003. A further motion was moved by Mr Greenan at a meeting of the applicant organisation on 17 December 2003 which endorsed the actions of the Secretary, President and the Committee of Management entering into formal negotiations with MEAA to develop a formal scheme of amalgamation. 23 On 7 October 2005, Mr Greenan was appointed President of the applicant organisation and the Federal counterpart Union. During his period as President, he continued to support the proposal to amalgamate with MEAA. On 30 June 2006, he resigned as President and as a member of the Federal counterpart Union. Mr Greenan was present at a special general meeting of the applicant organisation held on 19 July 2006 that endorsed the amalgamation between the applicant organisation and MEAA. The motion was moved by Mr Richard Ruhle who had resigned his position as Secretary of the applicant organisation on 22 November 2006. On 1 March 2007, Mr Greenan agreed to be nominated for the position of Acting Secretary, pending a formal election. Due to a heart condition, he resigned from this position on 5 March 2007, but continued to hold the position of President. Mr Greenan gave evidence that during the mid 1990s members of the Symphony and Opera House Orchestras resigned from the Musicians' Union of Australia and joined the MEAA. 24 During cross-examination, Mr Greenan gave evidence that when he became President of the applicant organisation, he formed the view that it was financially in "dire straits". He had numerous discussions with the Secretary of the Federal Union, who offered no assistance. Mr Greenan stated that he formed the view that there was no alternative for the applicant organisation to survive unless it amalgamated with MEAA as the Federal Union did not seem interested in its future. 25 It was decided to aggressively engage in discussions with Mr Chris Warren, Secretary of the MEAA regarding an amalgamation. There was an overwhelming response in favour of this approach from members of the applicant organisation, except the honorary members, who did not want to move to MEAA. It was at this time that Mr Greenan resigned from the Federal Union. He stated that an electronic plebiscite was conducted. There were about 280 to 300 members provided with the electronic plebiscite. He stated probably 50 per cent responded to the plebiscite. Of those who responded, 90 per cent were in favour of an amalgamation. Mr Greenan said that the applicant organisation had approximately 600 members with approximately 200 being honorary members. The applicant organisation had email addresses for approximately 200 of its members. Mr Greenan stated that the reason for pursuing the amalgamation was because the applicant organisation was out of money. The number of paying members was depleted to one third of its original membership and the annual income was down to $50,000 per year and getting worse. During re-examination Mr Greenan stated that he had been given observer rights to attend branch council meetings of the MEAA. 26 Mr Richard Ruhle joined the applicant organisation in 1974. In June 1999, he commenced working for the applicant organisation as a Claims Officer and Industrial Advocate. In September 2001, he was elected Secretary of the applicant organisation and also the Federal counterpart Union. Mr Ruhle said he had a direct role in initiating amalgamation discussions with MEAA. At all times, Mr Ruhle said that he was authorised by the Committee of Management of the applicant organisation and by general meetings of the applicant organisation to undertake discussions with MEAA. 27 On 30 June 2006, Mr Ruhle resigned as Secretary of the Federal counterpart Union, In early October 2006, Mr Ruhle became ill. On 22 November 2006 he resigned from the position of Secretary of the applicant organisation. He continued to work for the applicant organisation in a voluntary capacity. Mr Ruhle acknowledged that he had approached Mr Greenan to act as Acting Secretary. Upon Mr Greenan's resignation, he approached Mr Conley. 28 During cross-examination, Mr Ruhle acknowledged that he was currently employed by the MEAA as an Industrial Officer working 20 hours per week. He commenced employment with MEAA after his resignation from the applicant organisation on 22 November 2006. At the time of his resignation from the applicant organisation, his hours had been reduced to 20 per week. It was part of the amalgamation agreement that Mr Ruhle would be engaged as an Industrial Advocate by MEAA. At the time of his resignation from the applicant organisation, Mr Ruhle could not recall the approximate balance in its bank account, or that of the Federal counterpart Union. However, he believed that there were not sufficient funds in the bank accounts to guarantee his continued employment with the applicant organisation. Mr Ruhle said his hours with the applicant organisation were reduced from full-time because of its diminishing financial position. The decline had commenced prior to Mr Ruhle becoming Secretary in 2001. Mr Ruhle stated that it was part of his election campaign that in the three years prior to his election as Secretary, the funds of the applicant organisation had decreased from approximately $250,000 to approximately $120,000. As at June 2006, Mr Ruhle believed that the income of the applicant organisation was approximately $70,000. 29 Mr Ruhle stated that before he became Secretary, the ACTU provided an amount of money to assist in relaunching the New South Wales Branch. The applicant organisation also received an amount of $31,000 from the sale of shares that it held in the Trades Hall in approximately late 2002 or early 2003. It lent an amount of $21,000 to its Federal counterpart Union, to meet its outstanding debts and made a payment of $1,000 in sustentation fees to the Federal Union. 30 Mr Ruhle stated that the delay in meeting the statutory requirements in respect of filing financial returns and conducting elections was due to the illness suffered by himself and Mr Greenan. Although their illnesses occurred between October 2006 and June 2007, he acknowledged the last financial return lodged with the Industrial Registrar was for the year ended 30 June 2001. In explaining the delay in filing financial returns between 2001 to the time of Mr Ruhle's illness, he stated that the financial records had been provided to the applicant organisation's accountants, Synergy. As a result of an increase in professional indemnity insurance, the accountants fees quadrupled and the applicant organisation did not have the money to pay for the work done by the accountants. Mr Ruhle said this was the reason that precluded him and the applicant organisation from complying with the undertaking given to the Industrial Registrar to file audited financial statements for the years ended 30 June 2002 and 30 June 2003 by 30 June 2005. 31 During re-examination, Mr Ruhle stated that he accepted a position with MEAA to work 20 hours per week because he was committed to representing Musicians in New South Wales and to see through to conclusion the amalgamation of the applicant organisation with MEAA because he believed that was the only way forward to ensure representation of musicians in New South Wales. Evidence of the Musicians' Union of Australia 32 Mr Noone, tendered affidavits of the following: Mr John Lyle, a former President of the Federal counterpart Union and the Musicians' Union of Australia, New South Wales District Donald Albert Cushion, a former Federal Secretary of the Musicians' Union of Australia Mr Sam Moody, Secretary of the Musicians' Union of Australia, Adelaide Branch Mr Terry Noone, Federal Secretary of the Musicians' Union of Australia Each witness was required for cross-examination. 33 Mr Lyle joined the Musicians' Union of Australia in 1953 and became a member of the Committee of Management of the Musicians Union of Australia, Sydney Branch and the Musicians' Union of Australia, New South Wales District (as it was then known) in September 1978. In September 1979, he became President of these organisations and subsequently a member of the Federal Council of the Musicians' Union of Australia. After moving to Adelaide in 1987, Mr Lyle returned to Sydney in 1989. In 1990 became Secretary of the Sydney Branch of the Union and of the applicant organisation. 34 Mr Lyle stated that whilst a member of the Sydney Branch and the applicant organisation, he had never been required to pay subscription fees to the applicant organisation. Elections for positions on the Committee of Management of the respective organisations were always organised and held concurrently during the period that Mr Lyle was Secretary of the respective organisations. He stated that the only income received by the applicant organisation came directly from interest payments from moneys held in its accounts. These moneys were derived from the sale, in 1987, of a building at 94 Chalmers Street, Sydney. All other income was received and expenditure made by the Sydney Branch. This was reflected in the accounts of that organisation. 35 Mr Donald Albert Cushion has been a member of the Musicians' Union of Australia since 1945. He held the office of Federal Secretary of that organisation from 1974 to 1985. Mr Cushion is the author of a book entitled the "History of the Musicians' Union of Australia 1887 - 2002" which was published by the Federal Union in 2004. He stated that his research for this book revealed that what are known as "Branches" of the Musicians' Union of Australia were formerly known as "Districts". By way of example, he said what is now known as the Musicians' Union of Australia, Sydney Branch, was formerly known as the Musicians' Union of Australia, New South Wales District. At a time after the change of name of the Musicians' Union of Australia, New South Wales District, to the Musicians' Union of Australia, Sydney Branch, Mr Cushion stated that officers of the Sydney Branch arranged for elections for a separate committee to be conducted within the New South Wales jurisdiction. This body for which the elections were held was called the Musicians' Union of New South Wales District. 36 According to Mr Cushion, membership of the committee of the Sydney Branch and that of the New South Wales District have sometimes been identical and occasionally slightly different, but always substantially the same. From its inception as a separate body to the Sydney Branch, the New South Wales District did not collect subscriptions from its members but did levy them with fines for offences such as non attendance at meetings. Mr Cushion said this was that organisation's only income. No other branch of the Musicians' Union of Australia had followed a similar path to that pursued by the Sydney Branch. A separate committee was formed in light of the decision in "Moore and Doyle". Mr Cushion said that there had previously been confusion amongst members of both committees about their respective roles and membership. 37 Mr Sam Moody became a member of the Committee of Management of the Musicians' Union of Australia, Adelaide Branch, in December 1999 and Secretary/Treasurer of that Branch in July 2001. At the same time, he became a member of the Federal Executive and Federal Council of the Musicians' Union of Australia. Upon becoming Secretary, Mr Moody became aware that the Musicians' Union of Australia, Sydney Branch, required members to also join the applicant organisation. 38 When the Committee of Management of the Musicians' Union of Australia, Sydney Branch, resigned their membership on 30 June 2006, Mr Moody became aware of the intention of the applicant organisation to amalgamate with MEAA. Since that time, Mr Moody has been assisting the Federal Secretary to maintain the Sydney Branch's members database. He estimated he had spent some 400 hours of paid work in this regard. On 5 and 6 September 2006, Mr Moody assisted in forwarding a newsletter to all members of the Sydney Branch. The newsletter contained an explanation of the differences between the Sydney Branch and the applicant organisation. Included in the newsletter was a "members' information form" which members were requested to return. 111 members responded by returning this form. A further 27 members resigned their membership of the Sydney Branch. 39 Mr Moody also received 131 resignations from the Sydney Branch which were forwarded to the Musicians' Union of Australia from MEAA. As at 28 April 2008, Mr Moody stated that there were 355 financial members of the Sydney Branch. From an original list of 627 members, approximately 234 had resigned their membership. 40 Mr Terry Noone is the Federal Secretary of the Musicians' Union of Australia. Mr Noone stated that he was aware that a postal ballot on the question of the amalgamation of the Musicians' Union of Australia with MEAA, was conducted in 1995. The Federation as a whole and the Sydney Branch individually rejected the proposed amalgamation. A report from the Australian Electoral Commission dated 19 May 1995, annexed to Mr Noone's affidavit, disclosed that 1,765 ballot papers were issued to members in New South Wales. 476 voted in favour of the amalgamation and 591 voted against it. Mr Noone stated that he was aware that the membership of the applicant organisation was identical or substantially similar to that of the Musicians' Union of Australia, Sydney Branch. 41 In March 2006, Mr Noone became aware that the applicant organisation and the Musicians' Union of Australia, Sydney Branch were negotiating an amalgamation with MEAA. Mr Noone contacted Mr Richard Ruhle and expressed the opinion that the proposed amalgamation was not in the interests of the Federation, particularly as it would result in the collapse of the Sydney Branch. 42 On 30 June 2006, the Federal Union received letters of resignation from the following resigning their membership of the Musicians' Union of Australia, the Musicians' Union of Australia, Sydney Branch and their respective offices in these organisations: Richard Ruhle John Greenan

Jimmy Piesse Jimmy Shaw Leon Gaer 43 The Executive of the Musicians' Union of Australia instructed Mr Noone to take over the affairs of the Sydney Branch. On 10 July 2007 he forwarded a letter to Mr Ruhle and Mr Greenan warning them against moving the books and records of the Sydney Branch from its registered office and demanded to inspect and make copies of the books of the Sydney Branch. On 14 April 2008, 15 archived boxes of records were delivered to the Federal Office of the Musicians' Union of Australia together with a box of financial records from the former bookkeeper of the Sydney Branch. An electronic copy of the membership register of the Sydney Branch had been forwarded at an earlier time. The balance of Mr Noone's affidavit dealt with the activities of the Sydney Branch and had no relevance to this application. Relevant Principles 44 The principles to be applied in determining this application were conveniently summarised by Walton J, Acting-President in Liquor, Hospitality and Miscellaneous Union, New South Wales Branch [2006] NSWIRComm 244 at [13]: The principles applicable to applications of this kind were considered by this Court in Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151 (18 July 2001) in which the Court undertook a detailed review of the applicable authorities. Mr Nolan also referred the Court to two other authorities: Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch [1999] NSWIRComm 217 (delivered by Hungerford J ex tempore on 11 May 1999) and Merchant Service Guild of Australia, Queensland Branch, Union of Employees [2005] QIRComm 191 (delivered by Linnane VP ex tempore on 17 November 2005). 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 s 288(1)(a), (b) or (c) of the Act;

(b) the terms of s 288(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;

(d) 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;

(e) 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

(f) 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. 45 Wright P, recently considered a similar application in Re Newcastle Master Builders Association [2007] NSWIRComm 57. After referring to the Liquor, Hospitality and Miscellaneous Workers' Union judgment and an earlier judgment of the Walton J, Vice-President in Re Seamen's Union of Australia, New South Wales Branch [2001] NSWIRComm 151, his Honour helpfully summarised the relevant statutory provisions as follows:

... [22] It is perhaps appropriate to put the section under which the applicant has moved (that is, s 288) in its context. Section 284 is the definitions section of the relevant Division and defines the key word and concept of "invalidity" in very wide terms, as including not only the concept "nullity" but also, without limiting the generality of that notion, as including "any invalidity resulting from an omission, defect, error, irregularity or absence of a quorum" or caused by (amongst other things) an invalidity in an election. [23] Section 285 relates to the validation of certain acts done in good faith and has the general effect, subject to other orders which may be made under the statute, of validating all acts done in good faith by a collective body of an organisation, or by persons purporting to act as such a collective body, notwithstanding any invalidity that may be later discovered in the election or appointment of the collective body or in the making, alteration or rescission of a rule of the organisation. [24] Section 286 provides, but again is expressed to be subject to other orders which may otherwise be made under the statute, that after the end of four years from the doing of any act, including an act carried out by persons purporting to act as a collective body, the act or other similar action of the organisation or collective body is taken to have been done in compliance with the rules of the organisation. ... Consideration 46 It is clear from the Report of the Industrial Registrar and the evidence called by the applicant organisation, that invalidities have occurred in the organisation in respect of the failure to conduct elections and file accounting records and other financial statements with the Industrial Registrar. I make the requisite finding under s 288(3) of the Act that invalidities have occurred in the applicant organisation in respect of the holding of elections, the filing of financial records with the Industrial Registrar and the management of the applicant organisation. The question that arises for determination is whether, in the exercise of the Court's discretion, orders should be made to rectify any or all of the invalidities at this time. 47 I find that notwithstanding invalidities have occurred, to which I will refer shortly, I consider that there was no intention on the part of any relevant person for such an invalidity to occur and that the applicant organisation and the relevant officers acted bona fide in all relevant respects. I also conclude that all the relevant persons who, at all times, have had dealings with the applicant organisation, whether as a member, or a creditor, or otherwise, have been made aware of the proceedings and the orders sought in them. I also find that no injustice would occur to the organisation, or any person having dealings with the applicant organisation, including members or creditors, if the Court, at this time, makes orders in respect of conducting an election. In respect of the orders sought in respect of filing accounting records and other financial statements with the Industrial Registrar, I propose to deal with these on a difference basis, for the reasons which I will explain shortly. 48 I respectfully agree with the observations of Walton J, Vice-President in the Liquor, Hospitality and Miscellaneous Union decision, that a jurisdictional pre-requisite for the making of validation orders, is a finding of invalidity (see s 288(3)). I also agree with his Honour that, in the exercise of its discretion, the Court may not make an order (see s 288(5)) against an organisation unless it makes a finding of the kind set out in s 288(5), that the order made, would not do substantial injustice to the organisation or any person having dealings with the organisation, including members or creditors thereof. The circumstances which led to the invalidity, result in regulation 31(2) of the Industrial Relations (General) Regulation 2001 (NSW) applying. This regulation provides that the provisions of s 442 - s 451 of the Industrial Relations Act 1991 (NSW) apply in this case, as the regulations under s 249 of the 1996 Act have not been made. The earlier provisions therefore, on a transitional basis, continue to apply until such provisions are made. Sections 444(1) and 446(1) of the 1991 Act, which provide when an election is to be held in a registered organisation, require that the organisation must apply in writing to the Registrar. The organisation is to ask that the Registrar arrange for the conduct of an election in accordance with the organisation's rules. The provisions also provide that an organisation may apply to the Registrar for the approval to engage persons or bodies to conduct an election for an office in the organisation, other than the person referred to in the Act, for example, the Electoral Commission of New South Wales. 49 It is clear from the Industrial Registrar's Report and the evidence called by the applicant organisation, that an election for all office bearers of the organisation was due to be conducted in 2005 in accordance with s 444(1) and s 446(1). As no elections were conducted, it follows that an invalidity occurred. 50 In these circumstances, I make the requisite finding under s 288(3) that an invalidity occurred in that the applicant organisation did not conduct elections for all office bearers of the organisation which was due in 2005 and, secondly, in the management of the organisation. I have earlier in these reasons made findings as to the bona fides of the relevant officers of the organisation and findings which satisfy the requirements of s 288(5) of the Act. In my view, a case has been made out for the making of an order requiring an election for all office bearers of the organisation to be conducted by the Electoral Commission of New South Wales. Such elections should be conducted as soon as practicable and the results of the election declared no later than 31 December 2008. 51 The orders provide that the election which should have been held in 2005 will now occur. I note that the proposed orders will result in certain persons, who have not been elected, constituting the Committee of Management of the applicant organisation. However, the orders are merely interim in nature in this respect and permit the effective conduct of the affairs of the applicant organisation until the holding of elections. The persons who have been nominated to temporarily act as the Committee of Management are persons who have purported to act as part of the Committee of Management since 2005. Further, no complaint has arisen from those latter persons purporting to act as the Committee of Management of the applicant organisation since that time. It should also be noted that the positions are presently honorary in nature. 52 In these circumstances, I am not prepared, at this time, to exercise my discretion and make orders in respect of the failure by the applicant organisation to file accounting records and other financial statements. Unless the applicant organisation is in a financial position to ensure that the accounts and financial records are prepared, there is not a proper basis for the making of validation orders in respect of these invalidities. 53 I turn now to consider the application for orders in respect of the failure of the applicant organisation to file accounting records and other financial statements with the Industrial Registrar. The Report of the Industrial Registrar discloses that the applicant organisation filed preliminary profit and loss statements for the financial years ended 30 June 2002 and 30 June 2003 with an undertaking that the completed audited financial returns would be filed by 30 June 2005. This undertaking has not been fulfilled. Mr Ruhle's evidence was that this was because the applicant organisation was unable to pay its accountant for the preparation of audited accounts. The applicant organisation seeks to rely on the ill health of Mr Ruhle and Mr Greenan which occurred in 2006 and 2007 as the reason for the failure to lodge financial returns. In my view, the applicant organisation is being somewhat disingenuous in advancing the ill health of senior officials of the applicant organisation as a basis for its failure to file financial returns in 2002 and 2003. 54 I raised with Mr Ruhle, as no evidence was called regarding the applicant organisation's financial position, whether the applicant organisation was in a position to now pay for the preparation of financial records that are outstanding. Mr Ruhle submitted that a preliminary audit had been carried out, which was paid for by MEAA. 55 The Court is satisfied that the making of such an order will have the effect of enabling the organisation to function and operate effectively and legally. The order of the Court will achieve the objects of the Act and, in particular, the object contained in s 3(d) of the Act. The making of the orders will permit the organisation to function effectively as a representative body of its members in industrial relations and will restore proper and responsible management and control of that body. 56 I propose to direct that upon the declaration of the ballot that is to be conducted by the Electoral Commission of New South Wales, the Secretary of the applicant organisation is to meet within 28 days with the Committee of Management to consider the failure by the applicant organisation to file accounting and financial statements. I further direct that within 14 days of meeting with the Committee of Management, the Secretary of the applicant organisation is to report to me what is proposed to be done regarding the accounting records and financial statements. This part of the application is accordingly stood over pending this report. ORDERS 57 I therefore make the following orders: 1. On the facts before it, the Court determines and declares and orders that: (a) an invalidity has occurred in the management or administration of the Musicians' Union of New South Wales in that the organisation failed to apply in writing to the Industrial Registrar to arrange for the conduct of an election for all office bearers of the organisation which was due in 2005 in accordance with the organisation's Rules; and (b) an invalidity has occurred in the management or administration of the Musicians' Union of New South Wales in that the organisation failed to inform the Industrial Registrar of the need for an election and request that he advise the Electoral Commission of New South Wales, who shall appoint a Returning Officer. 2. That upon the basis of such invalidity, the Court, being satisfied that these orders do not do substantial injustice to the organisation, or to any member or creditor of the organisation or to any person having dealings with the organisation orders that the Musicians' Union of New South Wales shall conduct an election for offices, which shall be held and declared on or before 31 December 2008. That election, so held, shall be conducted by the Electoral Commissioner of New South Wales in accordance with the Rules of the Musicians' Union of New South Wales. Such elections shall comprise all offices specified in r 15 of the Rules of the applicant organisation and shall constitute, for all relevant purposes, the holding of any election required by r 15 of the Rules of the Musicians' Union of New South Wales. 3. Any applications made by officers of the applicant organisation for and on behalf of the applicant organisation to the date of this judgment, shall be valid for the purposes of the Rules of the applicant organisation. 4. Any decisions made by the Committee of Management of the applicant organisation when constituted by any of John Greenan, John Conley, Jim Piesse, Leon Gaer, Frederick Hill and James Shaw during the period 2005 to date of this judgment and any acts taken by John Greenan, John Conley, Jim Piesse, Leon Gaer, Frederick Hill and James Shaw in the performance of their duties and functions as Secretary of the applicant organisation, or in conformity with decisions of the Committee of Management of the applicant organisation are validated. 5. Pending the declaration of the election referred to in order 2, John Greenan, John Conley, Jim Piesse, Leon Gaer, Frederick Hill and James Shaw, shall constitute the Committee of Management of the applicant organisation. 6. The person elected to the position of Secretary shall, within 28 days of being elected to that position, meet with the Committee of Management of the Musicians' Union of New South Wales and discuss its failure to file accounting records and other financial statements with the Industrial Registrar. The Secretary shall report to me no later than 14 days after meeting with the Committee of Management and advise what the applicant organisation proposes to do in respect of its obligations to file accounting records and other financial statements with the Industrial Registrar. This part of the application is therefore adjourned to a date to be fixed.

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