The Master Builders' Association of New South Wales (No 2) [2009] NSWIRComm 108

Industrial Relations Act 1996 LEGISLATION CITED: Industrial Relations Act 1991 Workplace Relations Act 1996 (Cth)

Newcastle Master Builders' Association; Re [2007] NSWIRComm 57 CASES CITED: Seamens' Union of Australia New South Wales Branch; Re [2001] NSWIRComm 151; 107 IR 90 The Master Builders' Association of New South Wales [2008] NSWIRComm 159

Mr G Thomas LEGAL REPRESENTATIVES: Senior Industrial Officer Master Builders' Association of New South Wales

THE MASTER BUILDERS' ASSOCIATION OF NEW SOUTH WALES

Application by the Master Builders' Association of New South Wales for a determination of the question of an invalidity under section 288 of the Industrial Relations Act 1996

THE MASTER BUILDERS' ASSOCIATION OF NEW SOUTH WALES

Application by the Master Builders' Association of New South Wales for a determination of the question of an invalidity under section 288 of the Industrial Relations Act 1996

THE MASTER BUILDERS' ASSOCIATION OF NEW SOUTH WALES

Application by the Master Builders' Association of New South Wales for a determination of the question of an invalidity under section 288 of the Industrial Relations Act 1996

1 The Master Builders' Association of New South Wales ('the applicant organisation') has made three applications under s 288 of the Industrial Relations Act 1996 ('the Act' or 'the 1996 Act') to this Court following orders made on 3 September 2008 in The Master Builders' Association of New South Wales [2008] NSWIRComm 159 ('the 2008 judgment'). The relevant orders were, inter alia: …

(g) that the applicant organisation takes all necessary steps within three months of the date of this judgment to address any invalidity which may have occurred in an election in the organisation prior to the year 2007;

(h) that the applicant organisation takes all necessary steps within three months of the date of this judgment to file audited accounts for those years prior to 2007 when no such accounts were filed; and

(i) that the applicant organisation takes all necessary steps within three months of the date of this judgment to file the necessary statutory declarations pursuant to s 278(3) and s 278(4) of the Industrial Relations Act 1996 in respect of those years prior to 2007 when statutory declarations were not filed by the applicant organisation. 2 The applicant organisation's applications in matter numbers IRC 392, 393 and 394 of 2009 deal with invalidities occurring in the years 2004, 2005 and 2006 respectively. Invalidities for the year 2007 were addressed and rectified in the 2008 judgment. The present matter and the matters that were the subject of the 2008 judgment are consequential upon a report by the Industrial Registrar to the Industrial Court filed on 29 February 2008 identifying four substantive failures by the applicant organisation. The first two of these related to the election of office holders: 10. Section 249 of the 1996 Act provides that regulations may make provision for or with respect to the election of officers of State organisations.

Pursuant to clause 31 of the Industrial Relations (General) Regulation 2001 the provisions of sections 442-451 of the 1991 Act (and the regulations under those provisions) apply to a State organisation as regulations made under section 249 of the 1996 Act.

Rule 14 of the organisation's rules constitutes a Council of Management of the organisation, with officers to be elected annually.

Preserved section 444(1) of the 1991 Act provides that, 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.

There is no record of any application to the Industrial Registrar for an election of officers since an unsuccessful application for approval of special arrangements for the appointment of a returning officer other than the State Electoral Commissioner Office in 1995.

The organisation's sub-rule 14.24 provides, subject to certain criteria, that persons elected to office in a related organisation registered under Federal industrial legislation may be taken to be elected to corresponding offices in the State organisation. The Master Builders' Association of New South Wales has never lodged with the Industrial Registrar the documents required for sub-rule 14.24 to operate. 3 The other two substantive failures related to the lodgement of financial accounts and the lodgement of returns under s 278 of the 1996 Act: 16. Subsection 282(3) of the 1996 Act provides that, until other regulations are made, the provisions of the 1991 Act and the Industrial Relations Regulation 1992 ('the 1992 Regulation') relating to financial accountability continue to apply to State organisations. No other relevant regulations have been made.

17. Relevantly, those provisions provide that State-registered organisations must: (a) prepare certain accounts and certificates as soon as practicable after the end of the financial year of the organisation (section 510 of the 1991 Act and clauses 58 - 59 of the 1992 Regulation);

(b) appoint an auditor to prepare a report on the accounting records of the organisation within six months of the preceding financial year (ss 513 - 516 of the 1991 Act);

(c) provide free of charge to members of the organisation a copy of the relevant accounts, certificates and auditor's report within 56 days of the making of that report (s 517(1) of the 1991 Act and cl 62 of the 1992 Regulation);

(d) between 8 and 28 days after they have been distributed to members, present the relevant accounts, certificates and auditor's report to a general meeting of members of the organisation or a meeting of the committee of management (s 517(5) of the 1991 Act and cl 63 of the 1992 Regulation);

(e) lodge copies of the accounts and financial statements with the Industrial Registrar, under cover of a certificate by the Secretary of the organisation, within 14 days of their presentation to such a meeting (s 518 of the 1991 Act and cl 64 - 65 of the 1992 Regulation).

18. Preserved subsection 10 of section 518 of the 1991 Act provides that an organisation must not fail to comply with the section.

19. Section 521 of the 1991 Act (preserved by s 282(3) of the 1996 Act) requires that the Industrial Registrar inform the Industrial Court if an organisation fails to comply with sections 517 or 518.

20. The financial accounts lodged with the Industrial Registrar in relation to the financial years ended 30 June 1992 through to 30 June 1996 appear to be those of 'Master Builders Association of New South Wales', an organisation registered under the Federal industrial legislation. 21. No financial accounts were lodged with the Industrial Registrar in relation to the financial years ended 30 June 1997 or 1998.

22. The financial accounts lodged with the Industrial Registrar on behalf of the organisation in relation to the financial years ended 30 June 1999 and 30 June 2000 are those of 'Master Builders Association of New South Wales Pty Limited (A.C.N. 074397 532)'

23. No financial accounts have been lodged with the Industrial Registrar in relation to the financial years ended since 30 June 2000.

24. Section 278 of the 1996 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) provides that if default is made in complying with the section by an organisation, it is guilty of an offence.

25. I have caused the records of the Industrial Registry to be searched and no record has been found of any return by the organisation under section 278 of the 1996 Act for the year 2007.

4 Mr G Thomas, Senior Industrial Officer, represented the applicant organisation at the hearing of the applications on 29 May 2009. Mr Thomas submitted that each application was made under section 288 of the Act. Each application was supported by an affidavit of Mr Brian Seidler, Executive Director of the applicant organisation. The three applications sought the following orders pursuant to section 288 of the Act:

(a) That an invalidity occurred in 2004, [2005 and 2006] when the applicant State organisation failed to apply to the Industrial Registrar to conduct ballots, or to obtain the approval of the Industrial Registrar for a declaration that persons be declared elected to offices.

(b) That in 2004, [2005 and 2006] The Master Builders Association of New South Wales, the applicant State organisation failed to lodge copies of the accounts and financial statements for the State organisation with the Registrar. (c) Consequential Orders to negate, modify or cause to be modified the consequences in law of the invalidities found to have occurred by way of determination under Section 288 of the Act.

(d) Orders to validate all acts, matters or things rendered invalid by or because of the invalidities found to exist pursuant to Section 288 of the Act. 5 The invalidities highlighted in the applications are set out as follows: (a) Failure in 2004, [2005 and 2006] to apply to the Industrial Registrar to arrange for the conduct of ballots to fill offices in the State organisation. This includes failure to lodge duly audited financial accounts and the failure to lodge related Certificates and an Auditor's Report.

(b) Failure in 2004, [2005 and 2006] to obtain the Industrial Registrar's approval under Rule 14.24.1 of the State organisation's rules permitting persons elected to office in a related organisation to be validly elected to corresponding offices in the State organisation.

(c) Consequent failures in the management and administration of the State organisation involving the making of decisions and the taking of actions by persons not validly elected to offices of the State organisation as well as the calling and conduct of Council of Management and Executive Committee meetings. 6 Given the congruence of the three applications for the years 2004, 2005 and 2006, I will deal with the applications jointly. Grounds

7 The grounds upon which the applicant organisation relied in its applications were as follows:

The rules of the State organisation were certified 22 December 1995 in accordance with the Industrial Relations Act 1991.

This application deals with the operations of the State organisation during the financial year ending 30 June 2004, and subsequently following the Annual Meeting of the corporate and Federally registered entity held on 12 December 2004. Matters related to financial years ending on 30 June 2004, [30 June 2005 and 30 June 2006] are the subject of separate applications to the Court.

Attached to this application is a Statutory Declaration by the Executive Director stating as required by Rule 24.14.1 that the membership of The Master Builders Association of New South Wales registered under provisions of the Workplace Relations Act 1996 is identical to the membership of the State Organisation. Also attached are documents relating to the conduct of a ballot by the Australian Electoral Commission for offices of the Federally registered organisation.

Attached to this application is the Annual Report for the financial year ended 30 June 2004, [30 June 2005 and 30 June 2006] of ABN 96 550 042 906, and controlled entities. The controlling entity is The Master Builders Association of New South Wales. Documents accompanying the Annual Report indicate the entity's compliance with preserved provisions of the Industrial Relations Act 1991 and Industrial Relations Regulations 1992.

The attached Affidavit of the Executive Director deals with the operations of the entity established under the corporate law and the relationship between the State organisation and the organisation registered under the Workplace Relations Act 1996. It also deals with associated matters of fact.

The organisation and its members have acted in good faith:- (i) The invalidities did not arise as a result of a knowing and deliberate acts [sic] on the part of the officers of the State organisation;

(ii) The invalidities arose due to inadvertence; and,

(iii) The officers of the State organisation, upon appreciating the omissions, took the steps available to them to rectify the deficiencies in the affairs of the State organisation.

The Orders sought will do no substantial injustice to the State organisation, or any member or creditor of the State organisation or any person having dealings with the State organisation. (i) The audited accounts for The Master Builders Association of New South Wales are those accounts for ABN 96 550 042 906; these are attached to this application.

(ii) The membership roll, offices, and accounts of the State organisation are common to those of the entity registered under the Workplace Relations Act 1996.

(iii) Over the period of the invalidities in the management and administration of the State organisation covered by this application, the entity registered under the Workplace Relations Act 1996 operated in accordance with the requirements of the Workplace Relations Act 1996, and in accordance with the requirements of the Corporations law. 8. The State organisation is not aware of any member having any grievance or objection to the manner in which persons named have assumed office.

9. The Orders sought will: - (i) rectify the invalidities that have occurred;

(ii) modify the consequences in law of the invalidities; and,

(iii) validate any act, matter or thing rendered invalid by or because of the invalidity. The Orders sought will ensure that the applicant State organisation continues to represent its members in the manner regulated by the Act. [27] It is clear that the group of sections constitute an attempt by the legislature to provide methods whereby the legal and effective functioning of organisations can be secured and to end the difficulties which have arisen in arbitral jurisdictions where there has been a failure on the part of organisations properly to comply with the rules. In considering whether it is appropriate to exercise the wide jurisdiction given to us, we must clearly have regard to the objects of the Act. We are satisfied that Orders made with a view to enabling an organisation to function and operate effectively and legally will assist in achieving these objects and it will be appropriate to make such an order. (Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151 per Walton J citing with approval Sweeney and Evatt JJ in Re Australian Building Construction Employees' and Builders' Labourers' Federation (1978) 46 FLR 308.)

10. The Orders would have the effect of enabling the State organisation to function and operate effectively and legally.

11. The Orders would permit the State organisation to function effectively as a representative body of its members in industrial relations and will rectify the potential effects of a "technical" deficiency. [31] Before concluding, however, I should refer to a number of the cases referred to in the 2001 Judgment of the Vice-President which have been noted earlier. His Honour in that judgment referred to a number of the decisions as to the counterpart provisions in the then Conciliation and Arbitration Act, including the Judgment of J B Sweeney J in Australia Building Construction Employees & Builders' Labourers' Federation (1978) 46 FLR 488, and the Judgment of Gray J in Re Food Preservers' Union (1998) 79 ALR 138."

[32] In both Judgments there are references to the detailed and broad powers conferred by the relevant statutory provisions and emphasis on the consideration that in deciding whether to exercise its discretion to make orders of validation, it is appropriate for the Court to have regard to the objects of the relevant statute. In that regard it was concluded that Orders made with a view to enabling an organisation to function and operate effectively and legally will assist in achieving those objects and it would be appropriate to make such orders if the Court can satisfy itself that such an order would not do substantial injustice to the organisation, any member or creditor, or to any person having dealings with the organisation. Indeed, Gray J in the Food Preservers' case put the matter even more highly when he said:

In determining whether to exercise its discretion in favour of making an Order, the Court should bear in mind the beneficial and enabling nature of the section. Unless there are sound reasons to refuse an order, it should be made. [33] I consider that their Honours' views as to the approach to be adopted in the interpretation and application of the Commonwealth legislation equally applies here to the 1996 New South Wales statute. (Re Newcastle Master Builders' Association, [2007] NSWIRComm 57 per Wright J citing Walton J in Re Seamens' Union of Australia New South Wales Branch as well as Gray J in Re Food Preservers' Union (1998) 79 ALR 138.)

8 The applicant organisation relied on three affidavits deposed by Mr Seidler on 23 March 2009 in support of its applications for the years 2004, 2005 and 2006. Mr Seidler stated the following regarding the invalidities relating to the election of office bearers for the said years:

In terms of Rule 14.24.1 of the State Organisation's rules: - (a) The membership of The Master Builders Association of New South Wales registered under the Workplace Relations Act 1996 is identical to the membership of The Master Builders Association of New South Wales registered under the Industrial Relations Act 1996. (b) Offices of President, Deputy President and four Vice Presidents forming the Executive Committee created under Rule 18 of The Master Builders Association of New South Wales registered under the Workplace Relations Act 1996 are identical to those offices of President, Deputy President and four Vice Presidents forming the Executive Committee created under the Rule 18 of The Master Builders Association of New South Wales registered under the Industrial Relations Act 1996. (c) In other respects the rules of The Master Builders Association of New South Wales registered under the Industrial Relations Act 1996 relating to the election of members of the Council of Management and the Executive Committee under Rules 14 and Rule 18 respectively comply substantially with those relating to the election of members of the Council of Management and the Executive Committee under Rules 14 and Rule 18 respectively under the rules of The Master Builders Association of New South Wales registered under the Workplace Relations Act 1996. (d) The name of the organisation registered under the Workplace Relations Act 1996 is the same as the name of the State organisation registered under the Industrial Relations Act 1996. (e) Relevant extracts of the respective rules are attached as Attachment 1 and Attachment 2 to this Affidavit. (f) The 2004 elections of office bearers of The Master Builders Association of New South Wales registered under the Workplace Relations Act 1996 were conducted by the Australian Electoral Commission on 12 October 2004, 10 December 2004, 22 December 2004 and 10 February 2005 as Attachment 3. (g) No separate ballot has been conducted to fill offices of the State organisation.

9 Mr Seidler deposed the following with respect to the lodgement of returns for the years 2004, 2005 and 2006:

Regarding the lodgement of an Outstanding Return of the State organisation for 2004, and regarding the validation of certain invalidities in the management and administration of the organisation and of certain decisions. (a) Attached to the Application under Section 288 of the Act is the 2005 Annual Report for the Master Builders Association of New South Wales. This Report covers the economic entity and the controlling entity. The controlling entity is The Master Builders Association of New South Wales (ABN 96 550 042 906), an organisation registered under the Workplace Relations Act 1996. (b) The 2004 Annual Report attached was presented to the Annual General Meeting of the controlling entity, The Master Builders Association of New South Wales, held on 14 December 2004. (c) The reporting entity concerned for purposes of the Corporations law and other federal laws was The Master Builders Association of New South Wales (ABN 96 550 042 906). There is no separate entity for the purposes of the Corporations law covering the State organisation registered under the Industrial Relations Act 1996. (d) No separate set of accounts is maintained, or financial reports issued, for the State organisation. (e) Also attached to the Application are Declarations made by the Committee of Management, Directors and Independent Auditors relating to both the full financial report and to a concise financial report covering operations of the economic entity only. The concise financial report and the other documents were been forwarded to members as an attachment to the October / November 2004 edition of Association's journal "Executive Newsbrief" in accordance with requirements of the Workplace Relations Act 1996. (f) This process meets the requirements of Chapter 8, Part 3 Division 5 of Schedule 1 Registration and Accountability of Organisations. (g) Also attached to the Application under Section 288 of the Industrial Relations Act 1996 are: -

(i) A Certificate issued by me as required by Section 518 of the Industrial Relations Act 1991;

(ii) A Statement issued by me as required by Section 280 of the Industrial Relations Act 1996;

(iii) A Certificate issued by the Committee of Management as required by Section 510(1) of the Industrial Relations Act 1991 and Regulation 59(1)(b) of the Industrial Relations Regulations 1992;

(iv) An Auditor's Report as required by Section 514 of the Industrial Relations Act 1991 and Section 282(3) of the Industrial Relations Act 1996; and,

(v) A Certificate issued by the Accounting Officer of the controlling entity as required by Section 510(1) of the Industrial Relations Act 1991 and Regulation 59(1)(a) of the Industrial Relations Regulations 1992.

10 Mr Seidler deposed the following at paragraph 5 of his three affidavits relating to the years 2004, 2005 and 2006: Regarding the governance of the entity for purposes of the Corporations law and the entity registered under the Workplace Relations Act 1996.

(a) Both entities are operating in accordance with the requirements of the Corporations law and of the Workplace Relations Act. (sic) 1996.

(b) Following from this I believe that, but for the subject matter of the application now before the Court under Section 288, the State organisation is operating in accordance with the Corporations law and of the Industrial Relations Act 1996.

(c) Based on this, the making of an Order under Section 288 will not do substantial injustice to the State organisation, any member or creditor of the State organisation; or any person having dealings with the State organisation.

(d) In my capacity as Executive Director, I believe that: - (i) there is no reason to suppose that those responsible for the invalidity have acted other than in a bona fide manner; (ii) the invalidities did not arise as a result of a knowing and deliberate act on the part of the officers of the State organisation;

(iii) the invalidities arose due to inadvertence; and,

(iv) the officers of the State organisation, upon appreciating the omission, took the steps available to them to rectify the deficiencies in the affairs of the State organisation.

11 Mr Seidler's affidavits contained the following annexures: 1. Extracts From Rules of the Federally Registered Entity, The Master Builders' Association of New South Wales: (i) Rule 14, Election of Officers, Council of Management, and Powers of Same; and (ii) Rule 18, Election of Officers and Their Powers and Duties. 2. Extracts From Rules of the State Registered Entity, the applicant organisation: (i) Rule 14, Election of Officers, Council of Management, and Powers of Same; and (ii) Rule 18, Election of Officers and Their Powers and Duties. 3. Reports by the Returning Officer - Australian Electoral Commission: Affidavit pertaining to activities in 2004: (i) Covering letter dated 12 October 2004 from the Returning Officer, Australian Electoral Commission, to Mr Seidler attaching a declaration of results for elections for the positions of President and Deputy President;

(ii) Covering letter dated 10 December 2004 from the Returning Officer to Mr Seidler attaching a partial declaration of results for the positions of Councillors;

(iii) Covering letter of 22 December 2004 from the Returning Officer to Mr Seidler attaching declaration of results for the positions of Councillors and four Vice-Presidents; and

(iv) Covering letter dated 10 February 2005 from the Returning Officer to Mr Seidler attaching declaration of results for the positions of Councillors. Affidavit pertaining to activities in 2005: Declarations of results from the Returning Officer, Australian Electoral Commission for the positions of: (i) President and Deputy President (undated); (ii) four Vice-Presidents (dated 10 October 2005); (iii) Councillors (undated); and (iv) Councillors (dated 19 December 2005). Affidavit pertaining to activities in 2006: Declarations of results from the Returning Officer, Australian Electoral Commission for the positions of: (i) President, Deputy President and three Vice-Presidents (dated 20 September 2006); (ii) Vice-President (dated 16 October 2006); (iii) Councillors (dated 10 November 2006); (iv) Councillors (undated); and (v) Councillors (dated 26 December 2006).

12 Rules 14.3, 18.2, 18.4 of the applicant's Rules provide that offices of the President, the Deputy President, the Vice-Presidents and the remaining members of the Council of Management shall be elected annually. I also note sub-rules 14.24.1 and 14.24.2 which state: 14.24.1 At least One month prior to an election the President shall provide the Industrial Registrar with a Statutory Declaration stating, if it be the case, that the membership of the New South Wales Branch of the Master Builders Association of New South Wales registered under the Industrial Relations Act 1988 (the NSW Branch) and the membership of the Association are identical. At this time the President shall also provide the Industrial Registrar with a copy of the Rules of the NSW branch relating to the elections of the holders of offices and seek the Approval of the Industrial Registrar that the persons elected to office in the NSW branch be validly elected to the corresponding offices of the Association. 14.24.2 Should the Industrial Registrar grant such approval, the persons elected to offices of the NSW Branch shall be taken to be validly elected to the corresponding offices of the Association. 13 The reference in the above sub-rules to 'Association' is a reference to the applicant, whilst the reference to 'the New South Wales Branch of the Master Builders' Association of New South Wales' is a reference to the State branch of an organisation registered under Federal industrial legislation. 14 Attached to the applicant organisation's applications under s 288 of the Act were the following documents: 1. Certificates of Secretary or other Authorised Person under s 268 of Schedule 1B of the Workplace Relations Act 1996 (Cth) dated 17 December 2004, 21 December 2005 and 19 December 2006; 2. 2003-2004 Annual Report, 2004-2005 Annual Report and 2005-2006 Annual Report of the Master Builders' Association of New South Wales, a federally registered organisation, containing, inter alia, audited accounts for the financial year, Committee of Management Statements and Operating Reports; 3. 'MBA Executive Newsbrief' Circulars to members dated October 2004, October/November 2005 and October/November 2006; 4. Certificates by Secretary of a State Organisation pursuant to s 518(1)(b) of the Industrial Relations Act 1991 ('the 1991 Act') and s 282(3) of the 1996 Act (relating to years 2004, 2005 and 2006); 5. Statements of Particulars of Loans, Grants and Donations by an Officer of an Organisation pursuant to s 280 of the 1996 Act (relating to years 2004, 2005 and 2006); 6. Certificates by Committee of Management of a State Organisation pursuant to s 510(2) of the 1991 Act and s 282(3) of the 1996 Act (relating to years 2004, 2005 and 2006); 7. Auditor's Reports pursuant to s 514 of the 1991 Act and s 282(3) of the 1996 Act (relating to years 2004, 2005 and 2006); and 8. Certificates by Accounting Officer pursuant to s 510(2) of the 1991 Act and 282(3) of the 1996 Act (relating to years 2004, 2005 and 2006). Relevant statutory provisions

15 Section 288 of the Act contains the main provision with which the Court is concerned regarding the present applications. It enables the Court to overcome the potential adverse implications for an organisation where an invalidity has occurred in connection with the management or administration of the organisation, or an election or appointment in the organisation or the making or alteration of the rules of the organisation. Section 288 provides: 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

(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. 16 Section 239 of the 1996 Act provides that: 239 Rules may provide for elections for offices in State branch of Federal organisation to be elections for purposes of State organisation (1) The rules of a State organisation registered under this Chapter may provide that persons elected to offices in a State branch of a Federal organisation are taken to be validly elected to the corresponding offices in the State organisation registered under this Chapter if the Industrial Registrar is satisfied that: (a) the membership of the State branch of the Federal organisation and the State organisation registered under this Chapter is identical or substantially similar, and (b) the rules of the State branch of the Federal organisation relating to the election of the holders of offices comply substantially with the requirements relating to election of the holders of offices under this Act. (2) The regulations may specify circumstances in which: (a) the membership of organisations is or is not substantially similar for the purposes of subsection (1) (a), or (b) the rules of an organisation comply or do not comply substantially with the relevant provisions for the purposes of subsection (1) (b).

(3) In this section, State branch of a Federal organisation means a State branch of an organisation registered under the Workplace Relations Act 1996 of the Commonwealth.

Section 278 of the 1996 Act provides: 278 Records to be kept and lodged by organisations (1) A State organisation must keep the following records: (a) a register of its members, showing the name, postal address of each member and such other particulars as may be prescribed by the regulations, (b) a list of the offices in the organisation, (c) a list of the names, postal addresses and occupations of the persons holding the offices, (d) such other records as are prescribed by the regulations. (2) A State organisation must: (a) enter in the register the name and postal address of each person who becomes a member, within 28 days after the person becomes a member, and (b) remove from the register the name and postal address of each person who ceases to be a member, within 28 days after the person ceases to be a member, and (c) enter in the register any change in the particulars shown on the register, within 28 days after the matters necessitating the change become known to the organisation. (3) A State organisation must lodge with the Industrial Registrar once in each year, at such time as is prescribed by the regulations: (a) a statutory declaration by the secretary of the organisation certifying that the register of members has, during the immediately preceding calendar year, been kept and maintained as required by subsections (1) and (2), and (b) a copy of the records required to be kept under subsection (1) (b), (c) and (d), certified by statutory declaration by the secretary of the organisation to be a correct statement of the information contained in those records. (4) A State organisation must, within 28 days, lodge with the Industrial Registrar notification of any change made to the records required to be kept under subsection (1) (b), (c) and (d), certified by statutory declaration by the secretary of the organisation to be a correct statement of the changes made. (5) The records kept by a State organisation under this section must be kept at the registered office of the organisation or other place approved by the Industrial Registrar. (6) A person authorised by the Industrial Registrar may inspect, and make copies of, or take extracts from, the register of members of a State organisation, or a part of the register, at such times as the Industrial Registrar specifies. (7) A State organisation must cause its register of members, or each part of the register, to be available, at all relevant times, for the purposes of subsection (6), at the office where the register is kept, to a person authorised by the Industrial Registrar under that subsection. (8) If: (a) a member of a State organisation requests the Industrial Registrar to give a direction under this subsection, and (b) the Industrial Registrar is satisfied: (i) that the member has been refused access to the register of members, or a part of the register of members, of the organisation at the office where the register is kept, or (ii) that there are other grounds for giving a direction under this subsection, the Industrial Registrar may direct the organisation to deliver to the Industrial Registrar, before a specified day, a copy of the register certified by statutory declaration by the secretary or other specified officer of the organisation to be, as at a day specified in the certificate that is not more than 28 days before the first-mentioned day, a correct statement of the information contained in the register, for the member to inspect at the office of the Industrial Registrar. (9) If default is made in complying with a provision of this section, the organisation is guilty of an offence.

17 As earlier indicated, the genesis of the present applications is to be found in a report submitted by the Industrial Registrar to the Industrial Court filed on 29 February 2008. The applicant organisation was mentioned in that report as one that had failed to perform certain duties under the Act, including the actions and omissions referred to in the applications presently before the Court. The relevant background regarding the application organisation is outlined in the 2008 judgment (at [19] - [20]): [19] It would appear the applicant was first registered under the Industrial Arbitration Act 1901 on 29 September 1906. The registration of the applicant was confirmed under Chapter 5 of the Industrial Relations Act 1991 ('the 1991 Act') on 22 December 1995, the organisation having been regarded as a 'continued unincorporated industrial organisation of employers' taken to be registered pursuant to s 641 of the 1991 Act on its commencement. The applicant organisation is to be taken to be an industrial organisation of employers registered under Chapter 5 of the 1996 Act pursuant to s 223(1) of that Act.

[20] As The Master Builders' Association of New South Wales was incorporated under section 421 of the 1991 Act, it is considered to be a "State organisation" in terms of section 217 of the 1996 Act. Therefore, Part 4 of Chapter 5 of the 1996 Act (Regulation of State Industrial Organisations) is said to apply to the organisation. The rules of the applicant registered on 22 December 1995 have remained unaltered except for a change of registered office address on 24 April 1996. The registered office of The Master Builders' Association of New South Wales is at Level 3, 51-57 Holt Street, Surry Hills, NSW, 2010.

18 Section 249 of the 1996 Act provides that regulations may make provision for or with respect to the election of officers of State organisations. Pursuant to clause 31 of the Industrial Relations (General) Regulation 2001 the provisions of sections 442-451 of the 1991 Act (and the regulations under those provisions) apply to a State organisation as regulations made under section 249 of the 1996 Act. Rule 14 of the applicant's Rules constitutes a Council of Management of the organisation, with officers to be elected annually.

19 As noted in the Registrar's report (outlined at [2] of this judgment), preserved s 444(1) of the 1991 Act provides that, when an election is required to be held, an organisation must apply in writing to the Industrial Registrar requesting that the Registrar arrange for the conduct of an election for an office in the organisation in accordance with the Rules of the organisation. There is no record of any application to the Industrial Registrar for an election of officers for the years 2004, 2005 or 2006. 20 Having regard to the relevant preserved provisions of the 1991 Act, Rules 14.3, 18.2 and 18.4 of the applicant organisation and the evidence of Mr Seidler, I am satisfied that the applicant had an obligation to hold annual elections for its Council of Management, its President, its Deputy President and its Vice-Presidents. There is no record of any application to the Industrial Registrar for an election of officers for the years 2004, 2005 or 2006. 21 Sub-rule 14.24 of the applicant's Rules, subject to certain conditions being met, provides that the applicant may seek the approval of the Industrial Registrar that the persons elected to office in the NSW branch of the federal organisation be validly elected to the corresponding offices of the applicant. Such documents have not previously been lodged with the Industrial Registrar for years 2004, 2005 or 2006.

22 I am satisfied that the provisions of Rule 14.24 have not been complied with in that the applicant organisation did not seek the approval of the Industrial Registrar that the persons elected to office in the federal organisation (also known as the Master Builders' Association of New South Wales) be validly elected to the corresponding offices of the applicant. 23 Given my findings, it follows that for the purposes of s 288(1)(b) of the 1996 Act: (1) an invalidity occurred in 2004, 2005 and 2006 when the applicant organisation failed to apply to the Industrial Registrar to conduct elections to fill offices of the applicant organisation; and (2) an invalidity occurred in 2004, 2005 and 2006 when the applicant organisation failed to obtain the Industrial Registrar's approval under Rule 14.24.1 of the applicant organisation's rules for persons elected to office in a related federal organisation to be validly elected to corresponding offices in the State organisation.

24 The implication of these invalidities is, of course, that any dealings that the elected officers engaged in throughout the years 2004, 2005 and 2006 would be rendered invalid consequent upon relevant orders being made. However, s 288(3) allows any invalidity to be rectified, negatived, modified or validated.

25 In addition to seeking validating orders regarding the invalidities associated with the conduct of elections in 2004, 2005 and 2006, the applicant organisation has submitted that this Court should rectify the invalidities occurring in the years 2004, 2005 and 2006 regarding its failure to lodge financial statements under s 287 of the Act. The applicant organisation relies on its compliance as a federal entity with the federal requirements pertaining to registered industrial organisations in this respect. The evidence confirms that the applicant organisation has, indeed, failed to comply with the legislative requirements provided for under the Act. 26 In making the orders sought by the applicant organisation, the Court must have regard to the effect that any orders under s 288 of the Act will have on other interests. Section 288(5) of the Act provides:

(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

(c) any person having dealings with the organisation.

27 Mr Seidler deposed in his affidavits in support of the applications: In my capacity as Executive Director, I believe that: -

(i) there is no reason to suppose that those responsible for the invalidity have acted other than in a bona fide manner;

(ii) the invalidities did not arise as a result of a knowing and deliberate act on the part of the officers of the State organisation;

(iii) the invalidities arose due to inadvertence; and,

(iv) the officers of the State organisation, upon appreciating the omission, took the steps available to them to rectify the deficiencies in the affairs of the State organisation. 28 In his applications before the Court, Mr Thomas submitted:

… that on that basis and because the controlling entity and the federally registered entity complied with the relevant laws over the period covered by the applications before you, that it is possible to submit that the orders now sought from the Court will do no substantial injustice to the State organisation or to any member or creditor of the State organisation or to any person having dealings with the State organisation. Each application is supported, as I have indicated, by an affidavit provided by Mr Seidler and in each case those affidavits make that point on the basis that I have just outlined.

I suggest also that - and this is also affirmed by Mr Seidler - that there is no reason to suppose that those responsible for the invalidities have acted in anything other than a bona fide manner, that the invalidities did not arise as a result of a knowing and deliberate act on the part of officers of the State organisation. They were inadvertent and that officers of the State organisation have taken steps to rectify the deficiencies in terms of those affairs of the State organisation.

I make the point that to support the assertion that Corporations Law and the Workplace Relations Act have been complied with, that in effect the accounts have been provided for the controlling entity, and that federal registration has been maintained over the period. In other words, that entity has operated in accordance with the law. I accept the evidence of Mr Seidler in his capacity as the applicant organisation's Executive Director and the submissions of Mr Thomas. There is no reason to suppose that those responsible for the invalidities have acted in other than a bona fide manner. 29 The applicant organisation relied in its submissions on the judgment of Walton J, Vice-President, in Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151; 107 IR 90:

[38] In Re Food Preservers Union, Gray J approached the court's discretion under 171C(2)(a) as follows (at 159): In determining whether to exercise its discretion in favour of making an order, the court should bear in mind the beneficial and enabling nature of the section. Unless there is sound reason to refuse an order, it should be made.

[39] The broad 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.

[40] The discretion of the Court is, however, constrained by the provisions of s288(5) of the Act which prevent 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.

30 The applicant organisation further relied on the judgment of Wright J, President, in Re Newcastle Master Builders' Association [2007] NSWIRComm 57 at [31] - [33]:

[31] Before concluding, however, I should refer to a number of the cases referred to in the 2001 judgment of the Vice-President which have been noted earlier. His Honour in that judgment referred to a number of the decisions as to the counterpart provisions in the then Conciliation and Arbitration Act , including the judgment of J B Sweeney J in Australia Building Construction Employees & Builders' Labourers' Federation (1978) 46 FLR 488, and the judgment of Gray J in Re Food Preservers' Union (1998) 79 ALR 138.

[32] In both judgments there are references to the detailed and broad powers conferred by the relevant statutory provisions and emphasis on the consideration that in deciding whether to exercise its discretion to make orders of validation, it is appropriate for the Court to have regard to the objects of the relevant statute. In that regard it was concluded that orders made with a view to enabling an organisation to function and operate effectively and legally will assist in achieving those objects and it would be appropriate to make such orders if the Court can satisfy itself that such an order would not do substantial injustice to the organisation, any member or creditor, or to any person having dealings with the organisation. Indeed, Gray J in the Food Preservers' case put the matter even more highly when he said: In determining whether to exercise its discretion in favour of making an order, the Court should bear in mind the beneficial and enabling nature of the section. Unless there are sound reasons to refuse an order, it should be made. [33] I consider that their Honours' views as to the approach to be adopted in the interpretation and application of the Commonwealth legislation equally applies here to the 1996 New South Wales statute. 31 I propose to follow Re Seamens' Union of Australia New South Wales Branch and Re Newcastle Master Builders' Association. 32 This Court has a broad discretion in exercising its power to rectify invalidities. Given my findings that invalidities have occurred in the form pleaded in the applications, and that validating orders will not do substantial injustice to the applicant organisation, any member or creditor or any person having any dealing with the organisation, I am satisfied that the orders sought by the applicant should be made. Such orders will enable the organisation to "function and operate effectively and legally and assist in achieving the objects of the Act.

33 In the 2008 judgment, orders were made rectifying invalidities occurring in relation to the 2007 year. There is no reason why I should take a different view of the invalidities associated with 2004, 2005 and 2006. Accordingly, I will make orders rectifying the invalidities identified in this judgment. 34 The Registrar's report to the Industrial Court in February 2008 identified the applicant organisation's failure to lodge financial accounts with the Registrar for the financial years ending 30 June 1997, 1998, 2001, 2002 and 2003. The report further identified the applicant organisation's failure to comply with the relevant statutory provisions regarding the election of officers to the organisation. Subsequent to the applicant organisation's registration under the 1991 Act on 22 December 1995, it has failed to apply for an election of officers, or alternatively, lodge with the Registrar its federally registered election results. Such invalidities are required to be rectified and I will order that the applicant organisation act upon their obligations in these respects. Orders

35 The Court makes the following orders effective from the date of this judgment: (1) That the Court determines, declares and orders that invalidities have occurred in the management or administration of The Master Builders' Association of New South Wales. (2) That the Court determines, declares and orders that invalidities have occurred in elections in The Master Builders' Association of New South Wales. (3) That upon the basis of such invalidities, the Court, being satisfied that the following orders made do not do substantial injustice to The Master Builders' Association of New South Wales or to any member or creditor of that Association or to any person having dealings with the Association, orders: (a) that the effect or effects of the failure to make an application to the Industrial Registrar in 2004, 2005 and 2006 under the preserved s 444 of the Industrial Relations Act 1991 regarding the conduct of ballot for offices of the State organisation is negatived; (b) that the effect or effects of the failure to make an application to the Industrial Registrar in 2004, 2005 and 2006 under Rule 14.24.1 of the applicant organisation's rules is negatived and rectified by declaring that persons elected to office in The Master Builders' Association of New South Wales, an organisation registered under the Workplace Relations Act 1996 (Cth), in the relevant ballots conducted by the Australian Electoral Commission in years 2004, 2005 and 2006 are declared to be validly elected to the corresponding offices in the applicant organisation; (c) that any decisions made by the Executive Committee of the applicant organisation when constituted by Ron Bracken, David Donaldson, Daniel Murphy, Scott Beynon Peter Court and Bruce Edwards from 12 October 2004 to 12 December 2005 and any actions taken by Ron Bracken, David Donaldson, Daniel Murphy, Scott Beynon, Peter Court and Bruce Edwards in the performance of their duties and functions as the Executive Committee of the applicant organisation or in conformity with decisions of the Executive Committee of the applicant organisation that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated;

(d) that any decisions made by the Executive Committee of the applicant organisation when constituted by Ron Bracken, David Donaldson, Daniel Murphy, Scott Beynon, Peter Court and Bruce Edwards from 13 December 2005 to 11 December 2006 and any actions taken by Ron Bracken, David Donaldson, Daniel Murphy, Scott Beynon, Peter Court and Bruce Edwards in the performance of their duties and functions as the Executive Committee of the applicant organisation or in conformity with decisions of the Executive Committee of the applicant organisation that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated;

(e) that any decisions made by the Executive Committee of the applicant organisation when constituted by David Donaldson, Daniel Murphy, Scott Beynon, Peter Court, Gordon Leggett and Bruce Edwards from 12 December 2006 to 10 December 2007 and any actions taken by, David Donaldson, Daniel Murphy, Scott Beynon, Peter Court, Gordon Leggett and Bruce Edwards in the performance of their duties and functions as the Executive Committee of the applicant organisation or in conformity with decisions of the Executive Committee of the applicant organisation that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated; (f) that any decisions taken by the Council as constituted by persons declared to be elected to the Council by this order along with any actions taken by those persons so declared to be elected that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated; (g) that the actions of the applicant organisation in filing audited accounts for the financial year ended 30 June 2004, 30 June 2005 and 30 June 2006 are validated; (h) that the applicant organisation takes all necessary steps within six months of the date of this judgment to address any invalidity which may have occurred in an election in the organisation from the date of their registration under the 1991 Act up until 2004; and (i) that the applicant organisation takes all necessary steps within six months of the date of this judgment to file audited accounts for the financial years ending 30 June 1997, 1998, 2001, 2002 and 2003 when no such accounts were filed, and to address any invalidity which may have occurred during the financial years ending 30 June 1999 and 2000.

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