Waste Contractors and Recyclers Association of New South Wales [2007] NSWIRComm 196

LEGISLATION CITED: Industrial Relations Act 1991 Industrial Relations Act 1996

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

APPLICANT LEGAL REPRESENTATIVES: Solicitor: Mr J Moses Ebsworth & Ebsworth Lawyers

WASTE CONTRACTORS AND RECYCLERS ASSOCIATION OF NEW SOUTH WALES

Application by the Waste Contractors and Recyclers Association of New South Wales for determination of a question of invalidity and consequential orders pursuant to s 288 of the Industrial Relations Act 1996

1 On 20 April 2007, the Waste Contractors and Recyclers Association of New South Wales ("the applicant organisation"), an organisation registered pursuant to the provisions of the Industrial Relations Act 1996 ("the Act"), made an application pursuant to s 288 of the Act, firstly, for a declaration of invalidity in respect of an election held by the applicant organisation in 2006, and, secondly, consequential orders validating the election and the actions and decisions of the Executive of the applicant organisation since that purported election. 2 Section 288, is in the following terms: Commission may make orders in relation to consequences of invalidity

(1) An organisation, a member of an organisation or any other person having a sufficient interest in relation to an organisation may apply to the Commission for the determination of the question whether an invalidity has occurred in: (a) the management or administration of the organisation, or (b) an election or appointment in the organisation, or (c) the making or alteration of the rules of the organisation. (2) On an application under subsection (1), the Commission may make such determination as it considers appropriate. (3) If, in a proceeding under subsection (1), the Commission determines that an invalidity of a kind referred to in that subsection has occurred, the Commission may make such order as it considers appropriate: (a) to rectify the invalidity or cause it to be rectified, or (b) to negative, modify or cause to be modified the consequences in law of the invalidity, or (c) to validate any act, matter or thing rendered invalid by or because of the invalidity. (4) Where an order is made under subsection (3), the Commission may give such ancillary or consequential directions as it considers appropriate. (5) The Commission must not make an order under subsection (3) without satisfying itself that such an order would not do substantial injustice to: (a) the organisation, or (b) any member or creditor of the organisation, or (c) any person having dealings with the organisation. (6) The Commission may determine: (a) what notice, summons or rule to show cause is to be given to other persons of the intention to make an application or an order under this section, and (b) whether and how the notice, summons or rule should be given or served and whether it should be advertised in any newspaper. (7) This section applies: (a) to an invalidity whenever occurring (including an invalidity occurring before the commencement of this section), and (b) to an invalidity occurring in relation to an association before it became an organisation. 3 The applicant relied on an affidavit of Mr Tony Khoury, the Executive Director of the applicant organisation, sworn 18 April 2007. Mr Khoury deposed that on 31 May 2006, the applicant held its elections for appointment of its Executive Officers. The election took place at the applicant organisation's offices at 31 Hallstrom Place, Wetherill Park in the State of New South Wales, with the appointment of Executive Officers of the applicant organisation, being, in accordance with r 24 of the applicant organisation's Rules, for a period of four years. The election was conducted by way of secret ballot in accordance with r 24. 4 Mr Khoury stated that in consultation with the outgoing Executive, he appointed Ms Jenny Sammut as the Returning Officer for the election. Ms Sammut was the then Administration Manager of the applicant organisation. Mr Khoury deposed that he considered that Ms Sammut performed her duties as Returning Officer in a fair and impartial manner at all times. Annexed to Mr Khoury's affidavit was a copy of a letter dated 28 March 2007 forwarded to the Industrial Registry by Mr Khoury. In that letter, Mr Khoury acknowledged that there had been an oversight by the applicant organisation in that no application was made to the Industrial Registrar for approval for the conduct of the 2006 election of office holders or for the approval of the appointment of the Returning Officer. In support of an application for the Registrar to deal with the matter administratively without the need to have the validity of the election referred to the Commission, the applicant organisation relied on the following matters:

(i) that the office in respect of which the elections were held was for the appointment of whole of the Executive (constituting 12 Executive Members); (ii) the nominations from the membership for the election were held by postal vote; (iii) the election of the nominees occurred by way of secret ballot (during the half year Annual General Meeting) held on 31 May 2006; (iv) the appointment of Executive Members was for a period of four years; (v) that the election of the Executive Members was conducted prior to the expiry of the previous term of the outgoing Executive. 5 In support of the applicant organisation's position that the Returning Officer for the election was validly appointed, the applicant organisation submitted first, that it did not consider the matter of costs, although it acknowledged that the method adopted in respect of the election was cost effective. Secondly, that Ms Sammut conducted the election in a totally impartial manner by publishing to the membership, which numbered 76 at the time of the election that she had been recommended by the Executive Director to conduct the ballot. Ms Sammut forwarded personally addressed letters and emails to all members. In addition, a post box was used to accommodate the receipt of all election ballot papers and Ms Sammut had the only set of keys to this post box. Thirdly, it was considered by the applicant that the appointment of Ms Sammut as Returning Officer was appropriate in light of the applicant organisation's size and resources. Fourthly, at all times Ms Sammut followed the Rules of the applicant organisation with respect to the conduct of the election. Fifthly, the applicant organisation has fairly limited resources as evidenced by the fact that it has no fulltime employees. Its Executive Director is engaged on a contractual basis and the Administration Manager is engaged on a part time basis. Sixthly, the current management and advisers to the applicant organisation, now understand that with respect to any further appointment of Returning Officer and the Executive Elections, that they will need to notify the Industrial Registrar in accordance with the provisions of the Act. 6 This matter came before me for directions on 11 May 2007. Mr J Moses, solicitor, appeared for the applicant organisation. There being no appearance for any other interested parties or persons at that time, directions were made with the full co-operation of the applicant organisation to ensure that members and creditors of the applicant organisation were advised of the application and given an opportunity to raise any concerns in relation to the making of the orders sought in it. 7 A further affidavit of Mr Khoury was filed on 24 May 2007. In that affidavit, Mr Khoury deposed that on 22 May 2007, he served by email a notice on all members of the applicant organisation advising them of the application to validate the election of its Executive Officers filed on 20 April 2007. The notice advised each member that the application would be heard on 25 June 2007 and that if any member wished to appear (for the purposes of contesting or opposing the application), a notice of appearance was required to be filed in the Industrial Registry no later than 15 June 2007 and the applicant organisation's legal representatives were to also be notified by this date. Mr Moses, submitted that no person had contacted the applicant and that no notices of appearance had been filed in the Registry. 8 A copy of the email dated 22 May 2007 and the email addresses of each member was annexed to Mr Khoury's affidavit. Mr Khoury also deposed that in accordance with the directions made by the Court, consideration was given to whether there were creditors of any significance that ought to be notified by the applicant organisation of its application. Mr Khoury stated as at 22 May 2007, the date upon which the affidavit was sworn, he did not consider that the applicant had creditors of any significance that ought to be notified of this application. He stated that he had come to this conclusion on the basis that at present the applicant organisation does not have any debts outstanding to any third parties and that creditors of the applicant organisation are paid in full on a monthly basis. 9 Mr Moses, submitted that the Court should and could properly make the orders sought, relying on the judgment of Walton J, Acting-President, in Liquor, Hospitality and Miscellaneous Workers' Union, New South Wales Branch [2006] NSWIRComm 244. His Honour set out the principles to be applied in such matters at [13]: The principles applicable to applications of this kind were considered by this Court in Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151 (18 July 2001) in which the Court undertook a detailed review of the applicable authorities. Mr Nolan also referred the Court to two other authorities: Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch [1999] NSWIRComm 217 (delivered by Hungerford J ex tempore on 11 May 1999) and Merchant Service Guild of Australia, Queensland Branch, Union of Employees [2005] QIRComm 191 (delivered by Linnane VP ex tempore on 17 November 2005). Having considered these authorities, the applicable principles can be summarised as follows:

(a) Section 288 of the Act requires the Court to firstly consider, as a jurisdictional prerequisite, whether an invalidity has occurred in relation to the matters described in s 288(1)(a), (b) or (c) of the Act;

(b) the terms of s 288(3) encompass any order rectifying the invalidity declared by the Court, negating and modifying the consequences in law of the invalidity and validating acts so that, in an appropriate case, the circumstances arising from the invalidity can be "put right" and the legal consequences of those circumstances changed;

(c) the discretion residing in the Court to declare such an invalidity is wide;

(d) in considering whether to exercise that discretion, the Court must have regard to the objects of the Act and orders that are made to enable the organisation to function and operate effectively and legally will assist in achieving these objects, in particular, the object in s3(d) of the Act. Other relevant factors include the circumstances in which the invalidity arose and the actions taken upon becoming aware of the invalidity;

(e) the discretion conferred under s288(3) of the Act is extended by the provisions of s288(4) which permits the Court, in circumstances where an order is made under s288(3), to give such ancillary or consequential directions as it considers appropriate; and

(f) the discretion of the Court is, however, constrained by s288(5), which prevents the Court from making an order pursuant to s288(3) unless the Court first satisfies itself that such an order would not do a substantial injustice to the organisation, any member or creditor of the organisation, or any person having dealings with the organisation. 10 The President, recently considered a similar application in Re Newcastle Master Builders Association [2007] NSWIRComm 57. After referring to the Liquor, Hospitality and Miscellaneous Workers' Union judgment and an earlier judgment of the Walton J, Vice-President in Re Seamen's Union of Australia, New South Wales Branch [2001] NSWIRComm 151, his Honour helpfully summarised the relevant statutory provisions as follows: ... [22] It is perhaps appropriate to put the section under which the applicant has moved (that is, s 288) in its context. Section 284 is the definitions section of the relevant Division and defines the key word and concept of "invalidity" in very wide terms, as including not only the concept "nullity" but also, without limiting the generality of that notion, as including "any invalidity resulting from an omission, defect, error, irregularity or absence of a quorum" or caused by (amongst other things) an invalidity in an election. [23] Section 285 relates to the validation of certain acts done in good faith and has the general effect, subject to other orders which may be made under the statute, of validating all acts done in good faith by a collective body of an organisation, or by persons purporting to act as such a collective body, notwithstanding any invalidity that may be later discovered in the election or appointment of the collective body or in the making, alteration or rescission of a rule of the organisation. [24] Section 286 provides, but again is expressed to be subject to other orders which may otherwise be made under the statute, that after the end of four years from the doing of any act, including an act carried out by persons purporting to act as a collective body, the act or other similar action of the organisation or collective body is taken to have been done in compliance with the rules of the organisation. ... 11 Mr Moses submitted that in exercising its discretion, the Court should take into account the following matters:

(i) the applicant had conducted the election in accordance with its Rules; (ii) there was no reason to suppose that those responsible for the invalidity had acted other than bona fide; (iii) the invalidity did not arise as a result of a knowing or deliberate act on the part of the officers of the organisation; (iv) the invalidity arose through inadvertence; (v) upon the deficiency in the conduct of the election being brought to the attention of the Executive immediate steps were taken to rectify it; (vi) the making of the orders sought will allow the applicant to continue to function effectively and legally. 12 In these circumstances and I find that, notwithstanding an invalidity which has occurred, to which I will refer shortly, I consider that there was no intention on the part of any relevant person for such an invalidity to occur and that the applicant organisation and the relevant officers acted bona fide in all relevant respects. I also conclude that all the relevant persons who, at all times, have had dealings with the applicant organisation, whether as a member, or creditor, or otherwise, have been made aware of the proceedings and the orders sought in them. 13 I also find that no injustice, would occur to the organisation, or any person having dealings with the applicant organisation, including members or creditors thereof, if the Court decided to make the orders sought. 14 I respectfully agree with the observations of Walton J, Vice-President in the Liquor, Hospitality and Miscellaneous Workers' Union decision that a jurisdictional pre-requisite for the making of validation orders, is a finding of invalidity (see s 288(3)) and that, in the exercise of its discretion, the Court may not make an order (see s 288(5)) against an organisation unless it makes a finding of the kind set out in s 288(5), that the order made would not do substantial injustice to the organisation or any person having dealings with the organisation including members or creditors thereof. The circumstances which led to the invalidity, results in reg 31(2) of the Industrial Relations Commission (General) Regulation 2001 applying. This regulation provides that the provisions of s 442 - 451 of the Industrial Relations Act 1991 apply in this case, as the regulations under s 249 of the 1996 Act have not been made. The earlier provisions therefore, on a transitional basis, continue to apply until such provisions are made. 15 Section 444(1) and 446(1) of the 1991 Act, which provide when an election is to be held in a registered organisation, require that the organisation must apply in writing to the Registrar, asking that the Registrar arrange for the conduct of an election, in accordance with the organisation's Rules, and, also, that an organisation may apply to the Registrar for approval to engage persons or bodies to conduct an election for an office in the organisation, other than the person referred to in the Act, for example, the Electoral Commission of New South Wales. It is this failure that raises a matter of concern. In this matter, the applicant appointed a paid official of the organisation to conduct the elections. The requirement that the Industrial Registrar must be contacted in such circumstance would have resulted in advice being given by the Industrial Registrar that would have avoided this problem and the necessity for such an application. 16 It is clear from the evidence of Mr Khoury that the election conducted in 2006 was not conducted in accordance with s 444(1) and s 446(1). It follows that there was an invalidity in the election which might, subject of course, to the statutory provisions earlier referred to, such as s 285, result in significant invalidities in the functions of the Act or the organisation. Mr Moses submitted that the applicant organisation represents 85 per cent of the Waste Recycling Industry in New South Wales and is a significant organisation. 17 In these circumstances, I make the requisite finding under s 288(3) that respective invalidities have occurred in the 2006 election in the organisation and, secondly, in the management of the organisation. I have earlier in these reasons made findings as to the bona fides of the relevant officers of the organisation and findings which satisfy the requirements of s 288(5) of the Act. In my view, the applicant has made out a clear case for making the orders sought. 18 I therefore make the following orders: 1. On the facts before it, the Court determines, declares and orders that: (a) an invalidity has occurred in the management or administration of the Waste Contractors and Recyclers Association of New South Wales in that the organisation failed to apply in writing to the Industry Registrar to arrange for the conduct of an election in accordance with the organisation's Rules; and (b) an invalidity has occurred in the management or administration of the Waste Contractors and Recyclers Association of New South Wales in that the organisation failed to apply to the Industrial Registrar for approval to engage a person to conduct an election for an office in the organisation; 2. That upon the basis of such invalidities, the Court, being satisfied that these orders do not do substantial injustice to the organisation, or to any member or creditor of the organisation or to any person having dealings with the organisation orders the election for Executive Officers of the Waste Contractors and Recyclers Association of New South Wales held on 31 May 2006: (a) is declared to be valid; (b) that the actions of the organisation in appointing Ms Jenny Sammut as the Returning Officer for the election be validated as having been undertaken in accordance with the organisation's Rules and the provisions of the Industrial Relations Act 1996; and (c) any decisions made by the Executive of the Waste Contractors and Recyclers Association of New South Wales during the period 31 May 2006 to the date of this judgment and any acts taken by the Executive in the performance of their duties and functions as the Executive of the organisation, are validated.

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