Sherriff, G.E. & Ors v Townsend, L.C. & Ors [1980] FCA 92

Federal Court of Australia|1980-08-01|Before: Cr JJ, Northrup J

wae I enclose ex tempore judgment in Sherriff v. Townsend (No. 2) delivered 25 June 1980, which has previously been forwarded to the Principal Registry. "Catchwords" and

the law publisher's circular are now attached, and I would be glad if you could arrange for wider distribution, including distribution to legal publishers, in the usual manner.

Reasons for Judgment in Sherriff v. Townsend were published by the Court on 3 April 1980. I understand that the law publisher's information sheet has not previously been sent to you and as the appearances are of some complex ity

... I enclose a separate legal publisher's information sheet in relation to this hearing and judgment.

Associate to the Honourable Mr. Justice R.M. Northrop

Vv. No. 12 .£ 197y INDUSTRIAL DIVISION AND IN Tit POCDERAL COURT OF AUSTRALIA NEW SONTH WALES REGISTRY N.S.W. No. 26 of 1979 INDUSTRIAL DIVISTON N.S.W. No. 31 vi 1979

GARRFY ERNEST SHUPRTFP & OTFERS v. LEONARD CRCIL TOWNSEND &_ OTR GIO

Industrial law - declaration that rules of an organization fail to

make & provision required by Conciliation and Arpitcation Act -

scheme for reconstitution - proceedings adjoutned to eneble organization to amend rules ~ failure to comply with provisions cof scheme - rules not amended - subsequent duty ci Industriai Per. strar

Conciliation and Arbitration Act 3904, as amanded, su. 1s0(5L;, (7

IN TS PEDERAL COURT OF AUCTRAL™ «4 ICTORLA DISTRICT REGISTRY Vv. No. 12 of Larrea INDUSTRIAL DIVISION

NEW SOGTR - - e N.S.W. No. 26 of 4.979 INDUSTRIAL PIVIF ION N.S.W. No. 31 of 1972

GARRY ERNEST SYERRIEF & OTHERS Ciaiznants and LEONARD CECTL TOWNSEND & OTUERS Respondents SMITHERS A.C.7., EX TEMPORE JUDGMENT 25 JUNE 1620,

On 13 March 1980 the Court made a declaration under s.140(5D) cf the Conciliation and Arbitration Act i904 as amended, as follows:

"aA, THAT the rules of the Vehicle Butlders 'rployees ~ Fedération of Australia contravene .140(1) of the Conciliation and Arbitration Act 1904 as amended in that they fait to make a vrovision required ty the Act an} the regulatzons made under the Act namely thev fail to provide for a Federal ccmmittee of management,"

In his reasons for judgment Northrup J., afcter referrare to the provisions of 3.140/5D), ©.140(5G) and s.140/6) of the Aci, said at pp.9 ~ 10

"Sect3 wn 146(7) maxes provisicr for what is to happen! where the Court makes 2 declaration that the rules or an crganizetion contravene s.14C{1) in a specified resnect, Often it is a nice

, question, in the legal sense, as to what order a Court should make an ezrcumetances sinilar te those in the present case, see, fur examole R. v. Anstraiven Industvial Ceart ¢x yeres hanes

"In the present case the Federation is an organization of long standing, Its Mederal Council has existed in *cccrdance with the current provisions ot Rules 1 and 4 for many years without challenge. It would be inappropriate to make ax: order upon which s.140(5G) ecperates, varticularly heving regard to the scheme under s.17iD of the sct which the Court proposes to aprrove. Tn all the circumstances, it is des>rable that in Netter V. No. 12 of 1979 the Court should declare that the rules of the Federation contruvere s.140(1) of the Act in that they fail to make a prevision required by the Act and the Regulaticns, ~-amely they fail to provide for a federal committee of management, and to otherwise adzourn those paris of the proceedings insofar as they relate tc Rule 1 and Rule q and are based upon s.149 of the Act for the purposes of giving the Federation an oppertunity to alter its rules im this respect. At the same time, the provisions of s.245(7) of the Act will enable the Industrial Registra: co take such action as he corsiders appropriate pursuant to the provisions of that subsection. To implement this, the Court will direct that 2 copy of the Order made herein, together with a copy of these reasons for judgment, be delivered forthwith to the Industrial Registrar."

Then later, in referring tc s.171D of the Act he said at pp.23 and 24:

"Accordingly, the Court approves a scheme to enable the Federal Council and tne Federal 2xecutive Committee cf the Federation to conmtirme to function on an interim basis and for the persons rresentiy purporting to hold the offices of President, Vice-president and Trustee sespecbisely, tc centinve to hold those offices on ay, interim basis. Uniii the Federal Council is reconstituted and complies with the requirements of the Act, the Federal Council is not to exercise its power of altering the rules of the Federation, except in comuliance with the scheme approved by the Court. After ve reconstituted, the Federel Councii '1il be ine position to exercise its verers in S17] an ermpL

with the rules of the Pederatior. 'The schem= epprivec provides for a meeting of Federai Council, 4s presently censtituted, to rescive won che aporepriete rules for the reconstruction of the Federal CUow:c1l. The rules of tr2 Federztion, insofar as they Lay

down ¢ precedure to he followed witn respect To an alteration of mules, need not be Pelloved. The only rules to be altered under the scheme are Rules 1 eri 4. <A timeteble is ia7d jicwn in the cereme end wistv

"Registrar witl be in & position to exercise . sfoar 4 the powers conferred by s.140(7) of the Act."

The Scheme wider s.171U required the Federal Secre.arv of the Federation, within 21 days, =o call a meeting of the persons who, according to the rules cf the Federation tnevretcfore certified, were members of the Federal Council of the Federat.o:. The business to be conducted at the meeting was,and we quote fron the Order made on 13 March 1980 under paragraph 2 of the Seclery

"... to resolve upon appropriate rules, ac to the circumstances of the Federation, t provide for the constitution of a Taderal % Covreil which shali not be contrary t+ the provisions of the Conciliation and Arbitration Act 1994,

as amended, subjoct to ... specific provisions, which need not be quoted.

The Scheme required the meeting to be held nro 1 May 1980. The Scheme then provided in paragraph 4 es fol

"4h, The rules so resolved upon at the said meeting shall be deemed for 411 purposes to have been made by the authorised rule-musning authority of the Federation in accordance with relevant procedures iaid down by the rules cf the Federation."

provision for the holding of an election under the altered Rule

1 and 4, The Scheme provided, by nersgraph 7, as follows:

"Until the recenstituticen of the Federal Council as afcresazd the membors of Ceuncil held«re of pursuant to tke rules heretofore certified sane deemed to consritute the Federal Council of th Federation duly and validly elected end snall have

all the powers of the Federal Co wicil provided fer

in the rules of the Federation ovher tlan the pcver

Federation, excevting for the purpose of reconstitulirs Federai Counc21 as proviced for herein."

General liberty to apply was granted and the further hearing of matters V. No. 12 of 1974, T.S.W. No. 26 of 1°79 and N.S.W. No. 31 of 1979 was adjourned to 24 June 1980.

The persons authorised by the Schere to resolve upon appropriate rules ts provide for the constitution of the Federal Counci] have ignored the provisions of the Scheme. The meeting was held on 31 March 1980 but the only relevant resoluticn passed at that meeting was as follows:

"That a sub-committee comprising of the four (4 State Secretaries or Acting Secretaries and th two (2) Federal Officers be formed, to bring down a recommended formula for the election sof delegates to Council, including how the two (2) Federal Officers are elected to Council, how delegates are elected and the voting power of the Federal delegates and delegates, 1f yo elected,

Further, the sub-committce bring down a formula of election of the Officers of Council,

The recommended formulas be forwarded to a further meeting of the Federal Council for endorsement or otherwise."

That sub-committee has never met. No rules have been adopted to provide for the constitution of a Federal Council of the Federation. The persons referred to in the Scheme, in all probability, now have no power to adopt any such rules,

By letter dated 29 April 1980 the Tederal Secretary wrote to all Branch Secretaries in the following terms:

"Following the handing down cof the Reasons for Decision, in the recent Feleraticn Rules crallen and because of the wide effect the Decision will have on ali trade unions, i forwarded 4 cepy to the A.C,T.U.

The A.C.T.U. have now edvised that the amendments to the Concilzation and Arbitration Act on which the bencn relied, were mor. in the A.C.T.U.iés opinion, intended te be interpreted in this manner,

The particular question 1 draw attention to, was the validity of the rule geverning the Federal Officials on Federal Counc:1 together with Stare Secretaries.

"The A.C.T.U., intend within the next couple of weeks, to take action with a view to, if necessary, having the Act amended.

Bill Kelty, the Assistant Secretary of the A.C.T.U., has recommended that we take no action on rule amendments on this particular question, at this time."

In the course of submissions made on 24 June 1980 the Court expressed a tentative view that it considered the Federal Secretary had deliberately ignored the Order of the Court and intended to fail to comply with the provisions of the Scheme. The Court takes a serious view of that conduct. At the request of his counsel the Court adjourned the hearing of these matters until this morning. Nothing has been said today that leads the Court to change its view.

The Court has given consideration to whether it should make a declaration under s.140(5D) of the Act that Rule 1 and Rule 4 of the Rules of the Federation contravene s.140(1) of the Act. If such a declaration is made, then under s.140(5G) of the Act those rules would be deemed to be void from the date of the Order. The effect of such a declaration would be disastrous for the Federation. The Federation would have no Federal Council, no Federal Executive Committee and the persons exercising the interim powers may cease to have those powers.

In all the circumstances the Court will defer the taking of such a drastic step.

Three months have now passed sinee the Court made the declaration to found the powers conferred by s.140(7). Under that sub-section a duty is imposed upon the Industrial Registrar and that sub-section and sub-section 8 is read:

(a) the Court makes a declaration under this section in relation to the rules of an organization; and

(b) at the expiration of three months from the date of the declaration, the rules of the organization

have not been amended in a manner which, in the opinion of the Industrial Registrar, brings them

" into conformity with the requirements of sub-section (1) as regards the matters that gave rise to the declaration,

the Industrial Registrar shall, after inviting the organization to consult with him on the matter, determine such alterations of the rules as will, in his opinion, bring them into conformity with those requirements as regards those matters.

(8) The Industrial Registrar shall register the alterations so determined by him and thereupon the rules shall be deemed to be altered accordingly."

Since the time referred to in s.140(7) has passed, the Industrial Registrar is unable to extend the time of three months referred to in that sub-section, see s.140(9).

The interim powers conferred by paragraph 7 of the Scheme cannot be permitted to be continued indefinitely. It is imperative that the Rules of the Federation be made to conform with the Act as soon as possible. This can be done by the Industrial Registrar exercising the powers conferred by s.140(7) of the Act. To enable this to be done the Court proposes to adjourn the further hearing of these matters to Friday, 8 August 1980 at Melbourne. This will enable the Industrial Registrar to exercise the powers conferred by s.140(7) and (8) of the Act. If new Rules have not been registered by 8 August 1980, the Court will hear submissions on what further action should be taken. It will be necessary for the Federal Secretary of the Federation to take all steps necessary to assist the Industrial Registrar in the exercise of the powers conferred upon him. In this regard, the persons upon whom the interim powers are conferred by paragraph 7 of the Scheme are the persons having the powers of the organization for the purposes of consultation under s.140(7) of the Act.

Accordingly, the further hearing of these matters is adjourned to 8 August 1980 at Melbourne at 10.15 a.m. All parties have liberty to apply on seven days' notice to the Court and the other parties to these proceedings.

AND IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES REGISTRY N.S.W. No. 26 of 1979 INDUSTRIAL DIVISION N.S.W. No. 31 of 1979

GARRY ERNEST SHERRIFF & OTHERS v. LEONARD CECIL TOWNSEND & OTHERS

Industrial law - declaration that rules of an organization fail to

make a provision required by Conciliation and Aroztration Act -

scheme for reconstitution - proceedings adjourned to enable organization to amend rules - failure to comply wath provisions of

scheme - rules not amended - subsequent duty of Industrial Pegistrar

Conciliation and Arbitration Act 1904, as amended, ss. 140(5D), (7°.

IN THE FEDERAL COURT _OF AUSTRALIA VICTORIA DISTRICT REGISTRY Vv. No. 12 of 1979 INDUSTRIAL DIVISION

NEW SOUTH WALES REGISTRY N.S.W. No. 26 of 1979 INDUSTRIAL DIVISION N.S.W. No. 31 of 1979

GARRY ERNEST SHERRIFF & OTHERS Claimants and LEONARD CECIL TOWNSEND & OTHERS Respondents SMITHERS A.C.d., EX _TEMPORE JUDGMENT 25 JUNE 1980. EVATT AND - - - - - -

On 13 March 1980 the Court made a declaration under 8.140(5D) of the Conciliation and Arbitration Act 1904 as amended, as follows:

"A, THAT the rules of the Vehicle Builders Employees ~ Federation of Australia contravene s.140(1) of the Conciliation and Arbitration Act 1904 as amended in that they fail to make a provision required by the Act and the regulations made under the Act namely they fail to provide for a Federal committee of management."

In his reasons for judgment Northrop J., after referring to the provisions of s.140(5D), s.140(5G) and s.140(6) of the Act, said at pp.9 - - 10:

"Section 140(7) makes provision for what 1s to happen where the Court makes a declaration that the rules of an organization contravene s.140(1) in a specified respect. Often it is a nice question, in the legal sense, as to what order a Court should make in circumstances similar to those in the present case, see, for example,

R. v. Australian Industrial Court ex parte Maynes T1978) IS A.L.R. 669 per Mason J. at ETT.

"In the present case the Federation is an organization of long standing. Its Federal Council has existed in accordance with the current provisions of Rules 1 and 4 for many years without challenge. It would be inappropriate to make an order upon which s.140(5G) operates, particularly having regard to the scheme under s.171D of the Act which the Court proposes to approve. In all the circumstances, it is desirable that in Matter V. No. 12 of 1979 the Court should declare that the rules of the Federation contravene s.140(1) of the Act in that they fail to make a provision required by the Act and the Regulations, namely they fail to provide for a federal committee of management, and to otherwise adjourn those parts of the proceedings insofar as they relate to Rule.1 and Rule 4 and are based upon s.140 of the Act for the purposes of giving the Federation an opportunity to alter its rules in this respect. At the same time, the provisions of s.140(7) of the Act will enable the Industrial Registrar to take such action as he considers appropriate pursuant to the provisions of that subsection. To implement this, the Court will direct that a copy of the Order made herein, together with a copy of these reasons for judgment, be delivered forthwith to the Industrial Registrar."

Then later, in referring to s.171D of the Act he said at pp.23 and 24:

"Accordingly, the Court approves a scheme to enable the Federal Council and the Federal Executive Committee of the Federation to continue to function on an interim basis and for the persons presently purporting to hold the offices of President, Vice-president and Trustee respectively, to continue to hold those offices on an interim basis. Until the Federal Council is reconstituted and complies with the requirements of the Act, the Federal Council is not to exercise its power of altering the rules of the Federation, except in compliance with the scheme approved by the Court. After being reconstituted, the Federal Council will be ina position to exercise its powers in full in compliance with the rules of the Federation. The scheme approved provides for a meeting of Federal Council, as presently constituted, to resolve upon the appropriate rules for the reconstruction of the Federal Council. The rules of the Federation, insofar as they lay down a procedure to be followed with respect to an alteration of rules, need not be followed. The only rules to be altered under the scheme are Rules 1 and 4. <A timetable is laid down in the scheme and must

"Registrar will be in a position to exercise the powers conferred by s.140(7) of the Act."

The Scheme under s.171D required the Federal Secretary of the Federation, within 21 days, to call a meeting of the persons who, according to the rules of the Federation theretofore certified, were members of the Federal Council of the Federation. The business to be conducted at the meeting was, and we quote from the Order made on 13 March 1980 under paragraph 2 of the Scheme:

",.. to resolve upon appropriate rules, according to the circumstances of the Federation, to provide for the constitution of a Federal Council which shall not be contrary to the provisions

The Scheme required the meeting to be held no later than 1 May 1980. The Scheme then provided in paragraph 4 as follows:

"4, The rules so resolved upon at the said meeting shall be deemed for all purposes to have been made by the authorised rule-making authority of the Federation in accordance with relevant procedures laid down by the rules of the Federation."

The Scheme made consequential provisions including a provision for the holding of an election under the altered Rules 1 and 4. The Scheme provided, by paragraph 7, as follows:

as aforesaid the members of Council holding office pursuant to the rules heretofore certified shall be deemed to constitute the Federal Council of the Federation duly and validly elected and shall have

in the rules of the Federation other than the power

Federation, excepting for the purpose of reconstituting Federal Council as provided for herein."

General liberty to apply was granted and the further hearing of matters V. No. 12 of 1979, N.S.W. No. 26 of 1979 and N.S.W. No. 31 of 1979 was adjourned to 24 June 1980.

The persons authorised by the Scheme to resolve upon appropriate rules to provide for the constitution of the Federal Council have ignored the provisions of the Scheme. The meeting was held on 31 March 1980 but the only relevant resolution passed at that meeting was as follows:

"That a sub-committee comprising of the four (4) State Secretaries or Acting Secretaries and the two (2) Federal Officers be formed, to bring down.a recommended formula for the election of delegates to Council, including how the two (2) Federal Officers are elected to Council, how delegates are elected and the voting power of the Federal delegates and delegates, if so elected.

Further, the sub-committee bring down a formula of election of the Officers of Council.

The recommended formulas be forwarded to a further meeting of the Federal Council for endorsement or otherwise,"

By letter dated 29 April 1980 the Federal Secretary wrote to all Branch Secretaries in the following terms:

"Following the handing down of the Reasons for Decision, in the recent Federation Rules challenge and because of the wide effect the Decision will have on all trade unions, I forwarded a copy to the A.C.T.U.

The A.C.T.U. have now advised that the amendments to the Conciliation and Arbitration Act on which the bench relied, were not, in the A.C.T.U.'s opinion, intended to be interpreted in this manner.

The particular question I draw attention to, was the validity of the rule governing the Federal

Officzals on Federal Council together with State Secretaries,

"The A.C.T.U., intend within the next couple of weeks, to take action with a view to, if necessary, having the Act amended.

Bill Kelty, the Assistant Secretary of the A.C.T.U., has recommended that we take no action on rule amendments on this particular question, at this time."

In the course of submissions made on 24 June 1980 the Court expressed a tentative view that it considered the Federal Secretary had deliberately ignored the Order of the Court and intended to fail to comply with the provisions of the Scheme, The Court takes a serious view of that conduct. At the request of his counsel the Court adjourned the hearing of these matters until this morning. Nothing has been said today that leads the Court to change its view.

In all the circumstances the Court will defer the taking of such a drastic step.

(a) the Court makes a declaration under this section in relation to the rules of an organization; and

(b) at the expiration of three months from the date of the declaration, the rules of the organization

have not been amended in a manner which, in the opinion of the Industrial Registrar, brings them

" into conformity with the reavirements of sub-section (iy as regards the matters that gave rise to the declaration,

alterations so determined by him and thereupon the rules shall be deemed to be altered accordingly."

Since the time referred to in s.140(7) has passed, the Industrial Registrar is unable to extend the time of three months referred to in tHat sub-section, see s.140(9).

At a glance

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Before

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Judgment (115 paragraphs)