Re Henry Edward Wilson; Adrian Hart; Roderick Terence Kelly v John P Devereux & Ors; Re An Application By Roderick Terence Kelly of An Inquiry Into An Election In the Amalgamated Metal Workers' and Shipwrights' Union [1980] FCA 19 (13 March 1980)

FEDERAL COURT OF AUSTRALIA

Re: HENRY EDWARD WILSON; ADRIAN HART; RODERICK TERENCE KELLY
And: JOHN P. DEVEREUX & ORS; IN THE MATTER OF AN APPLICATION BY RODERICK
TERENCE KELLY FOR AN INQUIRY INTO AN ELECTION IN THE AMALGAMATED METAL
WORKERS' AND SHIPWRIGHTS' UNION
Nos. 3, 4, 6 and 7 of 1980
Industrial law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
INDUSTRIAL DIVISION
Sheppard J.

CATCHWORDS

Industrial law - whether provisions of union rule requiring notification of election in union journal mandatory or directory - held provision mandatory with the result that steps taken towards the holding of an election for the position of Joint National Secretary invalid and of no effect.

HEARING

SYDNEY
13:3:1980

ORDER

1. Order that the following question be tried as a separate question from any other question in these proceedings:

Whether the provisions of Rule 12 sub-rule 2 of the Rules of the fifth Respondent requiring a notice of election to be published in the Union Journal was complied with in relation to the election for the position of Joint National Secretary the subject of these proceedings, and if not, what is the consequence of such non-compliance.

1A. Determine that question by saying that the provisions of rule 12.2 of the Union Rules were not complied with in that no notice of the election was published in the Union Journal. The consequence of that non-compliance is that any purported election, which was held, any purported nomination which was received, and any other step taken towards the holding of an election are of no force and effect.

2. Order that the first and fifth respondents treat the purported election so far as it has proceeded for the position of Joint National Secretary for which nominations were called in December 1979 as a nullity by reason of the failure to comply with the provisions of Rule 12.2 of the rules of the fifth respondent.

3. Order that the first and fifth respondents perform and observe the rules of the fifth respondent in respect of the said election for the position of Joint National Secretary by

(a) giving notice of the election in the Union Journal of the fifth respondent and circularising all branches of the fifth respondent in accordance with Rule 12.2; and

(b) calling for nominations accordingly; and

(c) otherwise complying with the rules of the fifth respondent applicable to the said election so far as the same may be complied with.

4. Otherwise dismiss the application.

Application dismissed.

Application dismissed. Certify, pursuant to s.168(2) of the Conciliation and

Arbitration Act 1904, that the applicant acted reasonably in applying for the inquiry.

DECISION

In this matter I have reached a firm conclusion as to what the outcome of the argument which has been presented should be. I would have preferred to reserve my decision in order to express what I am about to say a little more elaborately than will be the case but the matter has a degree of urgency about it and I think it important that the parties know my decision as soon as possible.

The proceedings that are before me are three applications by members of The Amalgamated Metal Workers' and Shipwrights' Union made pursuant to s.141 of the Conciliation and Arbitration Act 1904 and an application for an inquiry made pursuant to s.159 of the Act. The applications raise questions as to whether steps taken in connection with the holding of an election for the office of one of the joint national secretaries of the union were in accordance with the union's rules. When the matters were called on for hearing this morning Mr. McHugh of senior counsel for two of the applicants suggested that the proceedings might be shortened if argument were to take place upon a preliminary question. The question which he formulated was whether the provisions of rule 12.2 of the union rules requiring a notice of election to be placed in the union journal was complied with and if not what was the consequence of such non-compliance.

Counsel for the returning officer of the union and the union itself agreed with the course proposed by Mr. McHugh. It was opposed by counsel for Mr. Kelly, but having heard argument I decided that I should proceed at least to take evidence and hear argument on the point. Having done so I am satisfied that the course proposed was an appropriate one and that I should now do what I was originally asked to do by Mr. McHugh and Mr. Shaw, namely, to make an order pursuant to Order 29 of the Rules of this Court. Accordingly pursuant to rule 2 of that Order I make an order for the decision separately of the question earlier formulated.

The evidence which it is necessary to consider in order to decide the question is contained in an agreed statement of facts read on to the transcript and in some four documents which were tendered. In brief, the facts establish that the membership of the union is in excess of 160,000 members. It regularly publishes two documents to members each of which is described as a journal. The first of these is known as the union's monthly journal. Twenty-five such journals are sent to each of 107 branches, a total of 2,675 copies, and two journals are sent to each of 7,500 shop stewards, a total of 15,000. That makes the circulation of the monthly journal in round figures some 18,000. The other publication is entitled "Amalgamated News", and is described, immediately under its title, as, "Official Journal of The Amalgamated Metal Workers and Shipwrights' Union". Every union member receives a copy of the publication Amalgamated News at least once each quarter, and on occasions up to nine times per year.

The rule which is in question is, as I have indicated, rule 12. It is headed, "Election of Full Time National Officials", and proceeds:

"1. The National Council shall determine the date for election to these positions. (The expression "these positions" refers to the positions in the heading. The office of joint national secretary is one of the

positions referred to therein.).

2. The National Returning Officer shall by notice in the Union Journal and circular to all Branches inform members of the opening of nominations for these positions in time to comply with the provisions of Rule 2.
The date for the receipt of nominations and acceptance shall be decided by the National Returning Officer, and such dates shall be fixed having in mind the provisions of Rule 2.
The National Returning Officer shall also arrange for a supply of prescribed nomination forms to be available for Branches.
He shall notify the Joint National Secretaries of the result of all elections for National full-time positions."

It is common ground that no notice of the election was published in either

of the journals or publications to which I have referred. The first part of the question formulated by Mr. McHugh must therefore be answered in the negative. The rule was not complied with, in that no notice of the election was placed in any document or any publication which could be described as the union journal. It is unnecessary to decide, in the view that I take of the matter, which of the publications should be regarded as the union journal for the purposes of rule 12, but I think that there is a serious question whether, in the light of the fact that the publication which goes to every member is described as the official journal of the union, it is not that document rather than the monthly document which more appropriately fits the description of union journal where used in the rule.

That being my conclusion on the initial part of the question, I proceed to the second part of it which asks, in effect, "What is the consequence of the failure to publish in the journal notice of the election?" What has to be determined is whether the failure to comply with the rule is fatal to the validity of the steps which were taken for the purpose of holding the election. The answer to that question depends upon the intention of those who made the rule as gleaned from the words which are used in it.

I have been referred to a number of authorities decided in the Commonwealth (later the Australian) Industrial Court (in industrial matters the precursor of this court) which suggest that the rule of construction to be applied in order to ascertain the intention of the draftsman of the rule is that which is so often applied when not dissimilar questions arise in the field of statutory interpretation, namely, to determine whether the provisions in question are mandatory or imperative on the one hand, or directory on the other. There are countless dicta in many decided cases which provide guidance on how this task should be approached. I refer to Maxwell on Interpretation of Statutes, 12th edition, pp.314-322.

I must confess, until I read the judgments to which I shall refer in a moment, that I had some reservation in thinking that such a rule of construction could be applied to what is in reality a document of a contractual nature as distinct from a statute or statutory instrument. I say that, notwithstanding that the rules must comply with certain of the provisions of the regulations made pursuant to the Act.

Before the Industrial Court decisions there had been decided in the High Court two cases involving questions as to the consequence of non-compliance with union rules. The first of these cases is known as The Tramways Case (No.2) [1914] HCA 58; 19 C.L.R. 43. Griffiths C.J. said (p.71):

"It was contended that the rules of the Association on the faith of which it obtained registration are directory and not obligatory, and that it is sufficient that there should be a rule, its observance or no-nobservance being immaterial. I do not think so. In my opinion the rules on the prescribed subjects are imperative, and any action of the organization not in accordance with them is a mere nullity."

The second case was United Grocers, Tea and Dairy Produce Employees' Union of Victoria v. Linaker, [1916] HCA 61; 22 C.L.R. 176. There Isaacs, J. said (p.182):

". . . . . there is a decision of this Court in The Tramways Case (No.2), that in regard to organizations registered under the Act there must be a rigid compliance with the rules. If ever there was a case in which that rigidity should have been relaxed it was that case, and for the reasons I there stated. But the law is there clearly laid down that the rules must be rigidly adhered to. It may be worth while for those concerned to consider how far that position is to be allowed to stand. It may be worth while in order to prevent such an injustice as, in my opinion, has occurred in this case, for unions to consider whether they will not add to their rules another one allowing them some elasticity, because it may be that the decision that the rules must be adhered to does not exclude a rule allowing some elasticity. That may have to be considered hereafter. But in the rules of this Union there is no elasticity, and, as there is not, the appellants fail, and the respondent, though he has gone back from his word and has failed to pay a shilling, which he twice undertook to pay, succeeds, but purely on a technicality."

It was the use of the words "directory", "obligatory" and "imperative", in the passage which I have cited from the judgment of the Chief Justice in the Tramways case which seems to have led the judges of the Industrial Court to apply the principles of construction to which I have referred.

The first of the cases cited was Mawbey v. Thone, 15 F.L.R. 161, where it was held, despite the application of the rule of construction, that the provisions of the rule in question were mandatory. The second case was Friend v. Barnes, 15 F.L.R. 184. Reference was made in the judgment in that case to Hay v. Australian Workers Union, 53 C.A.R. 108. In Friend v. Barnes it was held that the provision in question was directory rather than mandatory.

Whether, as a matter of legal approach, it be correct to apply in this case the principles which are so often applied in determining whether a statutory provision is mandatory or directory I do not need to decide. I would, however, be inclined, sitting as a single judge, to regard as binding upon me, at least in a persuasive way, the dicta which appear in the two cases decided in the Industrial Court, if it were necessary to come to a final conclusion. I do not think it is, because the ultimate question must always be, what is the meaning of the provision which is in question. What was the intention of the draftsman, having regard to the words of the rule which are in question?

In order to answer that question, one is entitled to take into account the surrounding circumstances, the subject matter to which the rule is addressing itself, the context in which the words in question appear and the words themselves. The subject matter is an election for the position of national secretary. The fact that it is an election in a democratically organized institution would of itself indicate, as the draftsman obviously had in mind, that notice of the fact that an election was to be held was intended to reach, as best as could be done, all members of the union, so that each might take part, if he or she wished, in the nomination of a candidate, or perhaps as a candidate for office.

One leg of the rule requires notice to the branches in the form of a circular; that was complied with. The other leg requires notice in the union journal, be it the monthly publication or the Amalgamated News. There was no compliance at all with that provision.

Counsel for Mr. Kelly sought to rely on the fact that there is no evidence before me that any particular member of the union has been prejudiced as a result of what has happened. There is no evidence that any member wished to nominate any other member, or wished himself to stand for election for the office, and was prevented from doing so by the fact that notice did not appear in the journal. But the question is one of construction. In my opinion the absence of evidence of prejudice is not a relevant factor to be taken into account. If on its true construction the rule is mandatory, the fact that no one was prejudiced is not to the point, any more than would be the fact that someone was shown to have been prejudiced if, on its true construction, the rule were directory only.

What then did the draftsman intend? The words relevantly are, "The National Returning Officer shall by notice in the Union Journal . . . . . inform members of the opening of nominations for these positions . . . .", that is to say, full time national officials. When one takes into account the purpose and object of the exercise, the words which are used and their context, it seems to me that what the draftsman was intending was that notice should be given in this way to union members and that, if it were not, the fact that it was not meant that the union membership had not been sufficiently or properly notified of the election.

An alternative submission put by Mr. McHugh, and adopted by Mr. Shaw for the union as his primary submission, was that although the words were to be construed as being directory, the result should be the same as if they were construed as being mandatory because there has been no substantial compliance with the rule. If I thought that the rule were directory, I would conclude that nevertheless there had been no substantial compliance with it, so that the outcome would be no different from that which will prevail if the rule is regarded as mandatory. But having reflected on the matter, I have reached the conclusion that the relevant provision of the rule is mandatory. It did require, in order for there to be a valid election, publication of notice of the election in the journal. That was not done. Accordingly, the consequence is that any purported election which was held, any purported nomination which was received and any other step taken towards the holding of an election are of no force and effect.

There was a submission by counsel for Mr. Kelly at one time which appeared to me to involve the proposition that the applicants for whom Mr. McHugh appears had no locus standi to bring the proceeding because they were not injured or damaged as a result of what had happened. There may be a question as to whether they were or were not, but even if they can show no prejudice they have a right to bring these proceedings simply by reason of their membership of the union. That seems to me to be the effect of s.141 of the Act. In fairness to counsel for Mr. Kelly I do not think that the submission was eventually pressed by him.

Accordingly, I determine the question which has been posed by saying first of all that no notice of the election in question was published in any publication which, within the meaning of the rule, could be described as the union journal. The consequence of that failure is that there has been no valid notice of the election, no valid nomination and, to the extent that any election may have been held, no valid election.

I stand the matters over to 13th March at 9.30 a.m. for short minutes of orders.