The Association of Wall & Ceiling Industries of New South Wales [2012] NSWIRComm 82

Industrial Relations Commission (NSW)|2012-07-18|Before: Walton J

bmissions as to form Legislation Cited: Industrial Relations Act 1991 Industrial Relations Act 1996 Industrial Relations (General) Regulation 2001 Cases Cited: Clay Brick & Paver Association of New South Wales [2011] NSWIRComm 110 Liquor, Hospitality and Miscellaneous Union, New South Wales Branch [2006] NSWIRComm 244 National Meat Association of New South Wales and Anor [2008] NSWIRComm 33 Re Newcastle Master Builders' Association [2007] NSWIRComm 57 Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151 The Master Builders' Association of New South Wales (No 3) [2010] NSWIRComm 39 Category: Principal judgment Parties: The Association of Wall & Ceiling Industries of New South Wales Representation: I J Warren (Applicant) File Number(s): IRC 465 of 2012

Judgment 1This matter concerns an application by The Association of Wall & Ceiling Industries of New South Wales ('AWCI'), a State organisation of employers registered under Ch 5 of the Industrial Relations Act 1996 ('the Act'), seeking a determination and declaration that an invalidity occurred for the purposes of s 288(1) of the Act and seeking orders in relation to that invalidity. 2The application arises from a failure by AWCI to obtain approval from the Industrial Registrar for the election of office bearers for AWCI for the election year 2011-2012. That approval was required prior to the conduct of the election by cl 31(2) of the Industrial Relations (General) Regulation 2001, which Regulation made the provisions of s 444 of the Industrial Relations Act 1991 ('the 1991 Act') apply to State organisations as if Regulations were made in those terms pursuant to s 249 of the Act. 3Section 444(1) of the 1991 Act was in the following terms: When an election is required to be held, an organisation must apply in writing to the Industrial Registrar requesting that the Industrial Registrar arrange for the conduct of an election for an office in the organisation in accordance with the rules of the organisation.

4The application was supported by evidence, given by affidavit, from Todd Sanderson (the Senior Vice President and Secretary of AWCI since 2007), Jane Elizabeth Barnes (the Office Manager of AWCI, employed since June 2008) and Irving John Warren (the Executive Director of the Building Industry Specialist Contractors Organisation of NSW, of which AWCI was a member). 5That evidence disclosed the following: (1)By cl 12(c) of the certified rules of AWCI, the office holders of AWCI must be elected each year with the maximum period of tenure being from the Annual General Meeting one year to the Annual General Meeting of the following year. At the subsequent Annual General Meeting, all positions are declared vacant. (2)By cl 13(a) of the certified rules, the Annual General Meeting is required to be held "within three months of the close of the financial year, which shall be the thirty-first day of December in each year". Whilst the language of the rule is not entirely clear, I accept the submission of AWCI that the rules required that the election of office holders must be conducted at an Annual General Meeting held by 31 March of the subsequent year. (3)The Office Manager of AWCI routinely organised the annual election of the office bearers, by applying to the Industrial Registrar each year for the election to be conducted in the manner specified in AWCI rules. Approval was normally sought at the same time for the appointment of a Returning Officer. At least in recent times, this had resulted in the appointment of Mr Warren as the Returning Officer and uncontested elections being resolved at AWCI's Annual General Meeting. (4)As a result of an administrative oversight, Ms Barnes (and the officers of AWCI) failed to seek and obtain approval from the Industrial Registrar for the conduct of the election and the appointment of a Returning Officer for the election held at the 2011 Annual General Meeting. (5)At the Annual General Meeting conducted in March 2011, an election of office holders was purportedly conducted and positions declared. It was only upon the notification to the Industrial Registrar of the result of the elections that the officers of AWCI became aware of the failure to seek the requisite approval. That notice was received in correspondence from Mr Greg Kirkby on behalf of the Industrial Registrar dated 20 May 2011. The delay in bringing the present application was explained by serious health issues encountered by Mr Warren. (6)Approval was obtained from the Industrial Registrar for the conduct of elections in 2012. Mr Warren was approved as the Returning Officer for that election. Office bearers were elected and continue to function within the electoral year 2012-2013. (7)During the period between the March 2011 Annual General Meeting and the election of officer bearers in 2012, the affairs of AWCI were managed by the office bearers purportedly elected at the March 2011 Annual General Meeting. The business of AWCI was conducted in accordance with its rules during that period. No complaint has been lodged by the members of AWCI or third parties as to the conduct of its affairs during that time. (8)Notice of the present application and these proceedings was given to the members of AWCI by email or facsimile. That notice was provided by the President of AWCI. Furthermore, Ms Barnes placed a public notice in the 'Sydney Morning Herald' on 14 June 2012 as to that same matter. (9)AWCI has met all its financial obligations for the period 2011-2012 and has produced audited accounts in relation to the same. There is no evidence that the making of orders sought would do a substantial injustice for any member or creditor of AWCI or any other person having dealings with that organisation.

The Application 6AWCI sought the following orders: 1)A declaration that, between 2010 and 2012 inclusive, invalidities have occurred in the management and administration of the Association of Wall & Ceiling Industries of New South Wales, an employer organisation registered and recognised under the provisions of the Industrial Relations Act 1996. 2)A declaration that invalidities have occurred in the election of office bearers for the Association of Wall & Ceiling Industries of New South Wales for the year 2011-2012. 3)An order that the election of office bearers for the Association of Wall & Ceiling Industries of New South Wales for the year 2011-2012 is validated pursuant to the provisions of s 288(3) of the Industrial Relations Act 1996. 4)A declaration that, for the years 2011 and 2012, all acts and decisions made in relation to the management and administration of the Association of Wall & Ceiling Industries of New South Wales by persons purporting to be office bearers of the organisation during those years are to be regarded as valid and effective. 5)A declaration that the purported elections for office bearers of the Association of Wall & Ceiling Industries of New South Wales in the year 2011-2012 are deemed to be validly conducted elections and the office bearers so elected to be validly elected to those positions and further, that all actions taken by those purportedly elected office bearers during this period are taken to be validated pursuant to the provisions of s 286 of the Industrial Relations Act 1996. 7However, AWCI accepted that orders may be made in a form similar to those made in The Master Builders' Association of New South Wales (No 3) [2010] NSWIRComm 39.

Principles 8There is now a line of authorities bearing upon proceedings such as the present: Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151; Liquor, Hospitality and Miscellaneous Union, New South Wales Branch [2006] NSWIRComm 244; National Meat Association of New South Wales and Anor [2008] NSWIRComm 33; Master Builders No 3 and Clay Brick & Paver Association of New South Wales [2011] NSWIRComm 110. 9Each of those authorities lay down broadly consistent principles applicable to the resolution of the present application. I propose to apply, in particular, the principles as stated in LHMU at [12] to [13], although I note that there is, in some respects, a common substratum of facts between this matter and Master Builders No 3.

Has there been an Invalidity? 10On the evidence presented by the applicant, an invalidity has occurred for the purposes of s 288(1) of the Act. First, the Court is satisfied that an invalidity arises from the failure to obtain the requisite authority of the Industrial Registrar for the conduct of the election held at the 2011 Annual General Meeting of the applicant. Secondly, a related invalidity concerns the management and administration of the applicant in that the relevant officers of AWCI failed to take steps to obtain the requisite authority, and office bearers invalidly elected at the 2011 AGM conducted the business of AWCI during the 2011-2012 period.

Should Orders be made Pursuant to Section 288(3)? 11Section 288(3) is in the following terms: (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. 12The sub-section reposes a wide discretion in the Commission to rectify an invalidity or to make other orders which would have the effect of negating or modifying the consequences in law of the invalidity. The proper approach to the exercise of that discretion is well settled: Re Seamens' Union at [38] - [40]; Re Newcastle Master Builders' Association [2007] NSWIRComm 57 at [31] - [33]; LHMU at [21] - [27] and Master Builders No 3 at [33] to [36]. 13In my view, there is a proper basis to make orders pursuant to s 288(3) in this matter. The invalidities arose through mere inadvertence, the officers of AWCI otherwise having conducted themselves upon the basis that a valid election had, in fact, been held at the Annual General Meeting held in March 2011. Those persons continued to act in accordance with the rules of AWCI during the period of the invalidity and, on the evidence, held a valid election in the following year. The curing of the invalidities and any consequences in law arising therein would allow AWCI to function effectively, legally and consistently with the objects of the Act. 14There is no impediment to the making of those orders by virtue of the operation of s 288(5). I consider that no issue of injustice relevant to AWCI or its members arises from the curing of the invalidity in a manner akin to the orders sought by AWCI. The proposed orders are beneficial to AWCI and its members as they restore conformity, so far as practical, with the requirements of the rules and validate the election of officials from the 2011-2012 period. Adequate notice of the proceedings has been given. On the evidence led, there would be no injustice served by making orders curing the invalidities to any creditor or any other person having dealings with AWCI. 15In all the circumstances, it is appropriate to make orders. Those orders should have the effect of rectifying the invalidities declared by the Court to the extent that the officers of AWCI had failed to obtain the requisite consent of the Industrial Registrar to conduct the election held in March 2011, and negating and modifying consequences in law of the invalidity insofar as the March 2011 election resulted in the invalid appointment of persons who then proceeded, in good faith, to conduct the affairs of AWCI during the 2011-2012 electoral year (but only to the extent that those persons acted in accordance with the Act and the rules of AWCI). Orders should also be made validating any acts taken by them during the 2011-2012 period, again so far as their conduct conformed with the Act and the rules of AWCI.

Orders 16In all the circumstances, the Court proposes to make the following orders effective 14 days from the date of this judgment: (1) The Court determines, declares and orders that: (a)an invalidity has occurred in the management and administration of AWCI, in that AWCI by its officers and employees did fail to seek the approval of the Industrial Registrar for the conduct of the election of officers at the 2011 Annual General Meeting of AWCI in accordance with cl 31 of the Industrial Relations (General) Regulation 2001 (incorporating the provisions of s 444 of the 1991 Act (repealed); (b)an invalidity occurred in the management and administration of AWCI in that office bearers appointed at the 2011 Annual General Meeting of AWCI did conduct the affairs of AWCI between that Annual General Meeting and the Annual General Meeting held in 2012 without having been elected in conformity with the Industrial Relations (General) Regulation 2001; and (c)an invalidity occurred in the elections for AWCI for the year 2011-2012, in that AWCI failed to obtain the approval of the Industrial Registrar to conduct an election for that year in accordance with cl 31 of the Industrial Relations (General) Regulation 2001 (incorporating the provisions of s 444 of the 1991 Act (repealed)). (2) That upon the basis of such invalidities, the Court, being satisfied that the following orders do not do substantial injustice to AWCI or to any member or creditor of AWCI or to any person having dealings with AWCI, orders: (a) that the effect or effects of the failure to make an application to the Industrial Registrar under the preserved s 444 of the 1991 Act regarding the conduct of ballot for offices of AWCI in the year 2011 is negatived; (b) the election of officers of AWCI at the 2011 AGM is validated; and (c) that any decisions made by the Executive Committee of AWCI between the declaration of the election of the officers of AWCI at the Annual General Meeting in 2011 and the election conducted at the 2012 Annual General Meeting and any action taken by Tony Roberts, Todd Sanderson, Shane Croker, Tony Mouritz, Maurice Langendam, Malcolm McMartin, Frank Kostzan, Ted Kasznik, Simon Hartley, Bing Wu, Bradley Thomas and Simon Crossman in discharging the duties and functions of the offices obtained by them in the same period, that would otherwise have been valid had the officers been elected in accordance with the requirements of the Act, are validated. 17This Court shall make the proposed orders, without further hearing from AWCI, 14 days from the date of this judgment, unless AWCI, by its officers, or agent, makes a submission within that timeframe that the form of the orders should be varied. (Any submission should be accompanied by alternative proposed draft orders.) In the event of the filing of such submission within the time specified, the Court shall make a further determination as to the form of orders. (The Court would not propose to list the matter before making such a determination unless AWCI, in its submission, seeks such a listing.)

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 August 2012

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