Re Richard James Squires v Keith Stephenson and Ors v Re An Application By Flight Stewards' Association of Australia Pursuant To Section 171c of the Act v [1983] FCA 69; 4 IR 84 (22 April 1983)

FEDERAL COURT OF AUSTRALIA

Re: RICHARD JAMES SQUIRES
And: KEITH STEPHENSON AND ORS.
And: IN THE MATTER OF AN APPLICATION BY FLIGHT STEWARDS' ASSOCIATION OF
AUSTRALIA PURSUANT TO SECTION 171C OF THE ACT
V. No. 6 of 1981
N.S.W. No. 41 of 1982
Industrial law
4 IR 84

COURT

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

CATCHWORDS

Industrial law - registered organisation - provisions for amendment of rules thereof - amendments effected by resolution of Council - whether resolution an "invalidity or a nullity" - whether amended procedures for amendment in contravention of Conciliation and Arbitration Act 1904 - provision for giving notice of general meetings of members by advertisement in newspaper - whether such a provision contravenes the Act - discussion of validity of certain other rules of organisation - Conciliation and Arbitration Act 1904, ss.139, 140, 141, 171A and 171C.

HEARING

SYDNEY
22:4:1983

DECISION

On 14 February, 1983, I published reasons for judgment in matter V No.6 of 1981. I did not then make orders but stood the matter over to 25 February, 1983, to enable counsel to consider what I had said and to bring in short minutes of order to give effect to my decision. On 14 February, 1983, I was informed for the first time that on 5 October, 1982, the Flight Stewards' Association of Australia ("the Association") had filed an application (N.S.W. No.41 of 1982) in which it sought certain orders pursuant to s.171C of the Conciliation and Arbitration Act 1904 ("the Act"). The matter had come into the list for directions before another judge of this Court. It was then adjourned generally to await the outcome of the other proceedings (V No.6 of 1981).

On 25 February, 1983, I gave directions in matter N.S.W. No.41 of 1982, ordered that the applicant in matter V No.6 of 1981 have leave to intervene in those proceedings and fixed a day for the hearing of them. I fixed the same day to deal with outstanding questions in matter V No.6 of 1981. At Mr. Squires' request, however, I did make orders in terms of paragraphs 1, 2 and 3 of the orders sought in the rule nisi in matter V No.6 of 1981. A copy of the rule nisi is annexed to my earlier judgment and the orders made were as therein claimed subject to certain amendments mentioned in the earlier judgment.

The purpose of this judgment is to deal with outstanding questions in matter V No.6 of 1981 and to dispose of the application N.S.W. No.41 of 1982.

It will be remembered that in the former matter I left outstanding the making of orders 4 and 5(a) and (b) claimed in the rule nisi. Order 5(c) was not pressed. I took that course because of questions in my mind concerning the operation of sub-section 139(4) of the Act and the decision of this Court in Boland v. Munro (1980) 48 F.L.R. 66 at pp.68-69 - see pp.31-32 of my earlier judgment. I am now satisfied that there is no bar to the making of those orders. The parties were both in agreement that that was so. I propose to make an order in terms of order 4 in the rule nisi. Some suggestions for the amendment of orders 5(a) and (b) were made at the recent hearing. Its form will be as follows:

"That the respondents and each of them (other than Flight Stewards' Association of Australia) perform or observe the Rules of the said organisation by treating as null and void and of no legal effect any resolution of the Federal Council of the organisation:-

(a) Purportedly increasing the contributions payable by members of the said organisation to any figure exceeding the amount prescribed in sub-rule (b) of Rule 9 until such time as an amendment to the said sub-rule authorising an increase in contributions payable by members of

the organisation is certified by the Federal Industrial Registrar;

(b) Purportedly imposing a levy on members of the said organisation exceeding the amount prescribed in Rule 10 until such time as an amendment to the said Rule authorising a levy on members of the organisation exceeding the amount presently prescribed is certified by the Federal Industrial Registrar."

The orders numbered 4 and 5 will be orders made pursuant to s.141 of the Act.

The parties are not in agreement as to what other orders, if any, need be made in matter V No.6 of 1981. It was the Association's submission that I should make no further order but should again stand the matter over. In the submission of Mr. Squires, I should, in addition to the orders already made, make declarations as follows:

"6. The Court declares pursuant to s.140 of the Act that sub-rule (d) of Rule 15 contravenes sub-section 1(c) of s.140 of the Act insofar as that

sub-rule contains the word "not".

7. The Court declares pursuant to s.140 of the Act that sub-rule (a) of Rule 32 contravenes sub-section 1(c) of s.140 of the Act.

8. The Court declares pursuant to s.140 of the Act that the rules of the said organisation contravene sub-section 1(c) of s.140 of the Act in a specified respect, namely:

(a) in omitting direct participation by the membership in relation to the amendment of rules; (b) in requiring more than five per cent of the members of the organisation to initiate a ballot under Rule 22."

It is to be observed that the declarations are sought under s.140 of the

Act; see particularly sub-sections (5D), (5G) and (7). It is not suggested by either party that any further relief to be granted in matter V No.6 of 1981 should be otherwise than pursuant to s.140 of the Act.

The Association's attitude in that matter is dependent in part, but by no means entirely, upon the outcome of the application it has made pursuant to s.171C of the Act. I find it convenient to deal with that application before deciding what further relief, if any, should, at this stage, be granted in matter V No.6 of 1981. Accordingly, I propose now to deal with matter N.S.W. No.41 of 1982.

Section 171C of the Act is as follows:

"(1) An organization, a member of an organization or any person having a sufficient interest in respect of an organization may apply to the Court for a determination of the question whether an invalidity has occurred in the management or administration of the organization or of a branch of the organization or in an election or appointment in, or the making or alteration of the rules of, the organization or a branch of the organization and the Court has jurisdiction to hear and determine the

application and to make such declaration as it thinks proper.

(2) Where, in proceedings under sub-section (1), the Court finds that an invalidity of the kind referred to in that sub-section has occurred, the Court -

(a) may make such order as it thinks fit to rectify or cause to be rectified the invalidity, or to negative, modify or cause to be modified the consequences in law of the invalidity, or to validate any act, matter or thing rendered invalid by or as a result of the invalidity;

(b) shall, before making such order, satisfy itself that such an order would not do substantial injustice to the organization or to any member or creditor of the organization or to any person having dealings with the organization;

(c) where any such order is made, may give such ancillary or consequential directions as it thinks fit; and

(d) may determine what notice, summons or rule to show cause is to be given to other persons of the intention to make such an order, and whether and how it should be given or served and whether it should be advertised in any newspaper.

(3) This section applies -

(a) to an invalidity whenever occurring, including an invalidity occurring before the date of commencement of this section; and

(b) in relation to an organization which is an association - to an invalidity occurring in or in connexion with the association before the date on which it was registered as an organization."

The expression "invalidity" is defined in s.171A. The only material part of

the definition is that which provides that "invalidity includes nullity" and that "invalid" has a corresponding meaning. Thus s.171C should be read as if the words "or nullity" appeared after the word "invalidity" wherever it occurs.

The supposed invalidity or nullity in question in the instant application is not related to any of the acts or matters which arose for consideration in matter V No.6 of 1981. Rather it is said to be the passing by the Council of the Association on 8 September, 1982, of a resolution purporting to amend the rules of the Association. The resolution was passed after the decision of this Court in Cook v. Crawford (1982) 43 A.L.R. 83 and was said to have been passed in an attempt to bring the rules into line with the majority judgments in that case.

The resolution purportedly passed on 8 September, 1982, was as follows:

"THAT this Federal Council meeting of the Flight Stewards' Association of Australia resolves that the rules of the Association be amended as

follows:

(1) delete existing Rule 12(g) and insert the following Rule 12(g) in its stead:

12(g) The Council, the Executive, the Federal President or the Federal Secretary shall have the power to forward a telegram to all members of the Council calling for a vote on any motion or question of importance, other than a motion to amend the rules of the Association. Upon a majority of the members of Council indicating their approval by telegram the decision so obtained upon such motion or question shall have the same effect as a decision made by resolution of Council at a duly constituted meeting; provided that if within a period of seven (7) days from the despatch of the last telegram by the Federal Secretary the motion or question has not been determined according to the foregoing provisions but votes have been cast by not less than ten (10) members of the Council, the motion or question shall be determined in accordance with the majority of votes cast and the decision so obtained upon such motion or question shall have the same effect as a decision made by resolution of Council passed at a duly constituted meeting.

(2) Delete existing Rule 12(i) and insert the following Rule 12(i) in its stead:

12(i) Councillors shall notify the Federal Secretary in writing at least fourteen (14) days before a Council meeting of any business desired to be placed on the agenda paper of the Council. The Federal Secretary shall prepare a copy of the agenda paper and, not less than seven (7) days prior to the Council meeting, he shall post a copy of the agenda paper to each Councillor at the postal address appearing in the files of the Association in respect of each Councillor.

(3) Rule 15(c) be amended by adding the following words after "General Meeting:"

"Such notice may be given by any one or more of the following methods:-

(i) in any paper or newsletter issued by the Association, or

(ii) a letter, circular, telegram or written notice to the members.

(iii) in the case of Special General Meetings, notice of the meeting may be given by an advertisement placed in a major Sydney daily newspaper."

(4) Rule 15(d):
----------
is deleted.

(5) Rule 15(e):
----------
is deleted.

(6) Delete existing Rule 15(f) and insert the following Rule 15(f) in its stead:

15(f) Federal Council may determine that General Meetings be held in series on more than one (1) day in which case the votes of members at such series shall be counted over all such meetings to decide the result of any such vote. Attendance at such meetings shall be recorded and such attendance record shall be used to ensure that members record only one vote on substantive matters deliberated on at such meetings.

(7) Delete Rule 32 (a) and (b) and insert the following Rule 32(a), (b), (c) and (d):

32(a) The Federal Council is empowered to add to, amend or rescind any of the rules of the Association.

(b) No new rule shall be made nor shall any of the rules of the Association be added to, amended or rescinded except by and at a meeting of Federal Council.

(c) No alteration, amendment or rescission of any of the rules of the Association by Council shall have effect unless the same be endorsed by a General Meeting of the members, such General Meeting to be held in a series of meetings within sixteen (16) weeks of the decision of Federal Council to amend, alter or rescind the rules in question.

(d) In the case of any General Meeting held in a series dealing with any alteration, amendment or rescission of the rules of the Association by Council, notice of the meeting shall be given at least fourteen (14) days prior to the holding of the first meeting in the series and such notice shall specify any alteration, amendment or rescission of the rules of the Association to be dealt with at the meeting."

The references to Rules 12(g) and 12(i) are plainly references to Rules

12(A)(g) and 12(A)(i).

From the point of view of the matters in contest in matter V No.6 of 1981, the amendments purported to effect a number of matters. The most important of these were:

(a) The Council was no longer to be empowered to amend the rules by means of the telegram voting procedure provided for in the old Rule 12(A)(g) - see amended Rules 12(A)(g) and 32(b).

(b) The express power to amend the rules was to remain vested in the Council, but subject to the need to consult the membership at general meetings - amended Rule 32.

Additionally the amendments purported to:-

(c) retain the telegram voting system in respect of "any motion or question of importance" - amended Rule 12(A)(g)

(d) provide for proper notice to members of the Council of the business of meetings thereof - amended Rule 12(A)(i).

(e) provide for the giving of notice of general meetings of members by a number of different methods including, in the case of special general meetings, publication of an advertisement in "a major Sydney daily newspaper" - see amended Rule 15(c).

(f) delete the provisions of Rule 15(d) which provided that decisions of general meetings, should not bind the Council.

(g) delete the provisions of Rule 15(e) which empower the Council to declare attendance at any general meeting as compulsory for all members.

(h) make some changes to the rule providing for the holding of general meetings in a series consequential upon the deletion of Rule 15(e) - see amended Rule 15(f).

Comprehensive as these amendments are, it is to be observed that there was no attempt to deal with criticisms I made of the provisions of the plebiscite rule - Rule 22. The amendments were made prior to the publication of my reasons for judgment. No doubt it was hoped that I would not think the rule in its present form contravened s.140 of the Act. Furthermore, it was thought, so I was informed by counsel for the Association, that the making of the amendments to which I have referred would have so changed the overall effect of the rules as to make the amendment of Rule 22 unnecessary. Those are matters of which I shall say more later.

Although the amendments to which I have referred were purportedly made by the Council and not the membership, serious efforts have been made by the Association to bring the proposals for amendment to the attention of all members. These occurred after the resolution of 8 September, 1982, and after the publication of my earlier judgment on 14 February, 1983. To this end four general meetings of the Association were held. Unfortunately these were not well attended, the quorum of 30 being only just achieved at the first two meetings and also at the last, and not being achieved at all at the third. At each meeting the Association's solicitor was present to explain the nature and effect of the amendments and to answer members' questions about them.

There was no evidence of any opposition to the amendments except on behalf of Mr. Squires and of a Mr. O'Connor who is a member of the Council. There is a letter from Mr. O'Connor to the Association's secretary, Mr. Smith, in evidence. The letter is dated 6 September, 1982, two days before the resolution in question. Mr. O'Connor has not otherwise come forward to state his views. Because of his absence from duty, there is a question, despite attempts to notify each member of the Association, of whether the recent hearing has come to Mr. O'Connor's attention. The directions given in matter N.S.W. No.41 of 1982 involved notice of the proceedings being given to each member by placing it in what is known as the member's file. Despite compliance with this direction, one cannot be sure that notice of the proceedings came to the attention of each member.

I have now said enough to enable me to come to the question of whether I should grant the Association the relief it seeks pursuant to s.171C of the Act. An initial question arises as to whether there is present an invalidity within the meaning of that provision. If there is not, the application must fail.

As previously mentioned, the invalidity which the Association claims to exist is the passing by the Council of the resolution of 8 September, 1982, by which it purported to amend the rules of the Association in the respects previously mentioned. In the Association's submission the invalidity (really nullity) exists because of what I may call the undemocratic process provided for in its rules for their amendment. Under the rules, as they existed before the amendment, the only methods by which the rules could be amended were by a resolution passed by the Council pursuant to Rule 32 or a plebiscite (i.e. a ballot of members) held pursuant to Rule 22. For reasons given in my earlier judgment the provisions of Rule 32 contravened paragraph 140(1)(c) of the Act because they did not sufficiently involve the general body of members in rule changes. It is a consequence of that decision, so the Association submits, that the resolution of 8 September, 1982, is an invalidity for the purposes of s.171C of the Act.

No submission to the contrary was made on behalf of Mr. Squires. For him it was contended that the application under s.171C should fail for other reasons. Nevertheless, I must be satisfied myself that there is an invalidity within the meaning of the section; otherwise I have no jurisdiction.

Uninstructed by the decision of a Full Bench (Spicer C.J. and Smithers and Woodward JJ.) of the Industrial Court in Allen and Ford v. Laragy (1975) 7 A.L.R. 261, I do not think that I would have been prepared to hold that the resolution in question did constitute an invalidity for the purpose of the section. The relevant time for the consideration of the matter must be the date of the resolution. At that stage no order declaring any rule to be invalid under s.140 had been made. That still remains the position. More importantly, whatever view one has concerning the question of whether Rule 32 contravenes paragraph 140(1)(c) of the Act, no question of the invalidity of the rule will ever arise at least under s.140. So far as that rule is concerned, the case is plainly not one for making an order declaring the rule to be invalid under the first limb of sub-section 140(5D). The appropriate order would be one made pursuant to the second limb of the sub-section declaring that the rules of the Association contravene paragraph 140(1)(c) of the Act in a specified respect, namely that, having regard to the object stated in paragraph 2(f) of the Act, they impose upon members conditions which are oppressive and unreasonable in that they do not encourage the democratic control of the Association nor the full participation of the members thereof in the procedure for amending rules.

In Reg. v. Dunphy; ex p. Maynes [1978] HCA 19; (1978) 139 C.L.R. 482 Mason J. referred (p.490) to the difficulty which there often is in determining "whether it is a particular rule, rather than the rules as a whole, which fails to make a provision required by the Act or the regulations". His Honour was referring to the provisions of paragraph (a) rather than paragraph (c) of sub-section 140(1), but what he said is apt for a case under paragraph (c) as well as for a case under paragraph (a). Notwithstanding what his Honour said I have no doubt that the contravention in the present case is one which falls within the second limb of sub-section 140(5D) and not within the first. It is for that reason that no question of the validity of Rule 32 under s.140 can ever arise. As Mason J. said of such a case (ibid at pp.489-90)), "the rules continue to have a valid operation subject to action being taken in accordance with sub-section (7)".

It is true that questions of invalidity may arise under other sections of the Act, particularly s.141. But an order made in such a proceeding will operate to to bind only the parties to it; Reg. v. Judges of the Commonwealth Industrial Court; ex p. Amalgamated Engineering Union (Shearer's case) (1960) 103 C.L.R.368 per Fullagar J. at pp.378-379 and also Cook v. Crawford (43 A.L.R. at pp.148-154). There is no proceeding on foot between any parties concerning the validity of the resolution passed on 8 September, 1982, except the instant application under s.171C of the Act. But that section is predicated upon there in fact being an invalidity. The Court is only empowered to give the relief provided for in the section if "the Court finds that an invalidity of the kind referred to" in sub-section (1) has occurred. It would seem to me that to determine whether it has or not, one must have regard to the other provisions of the Act, to the relevant rules of the organisation in question and to such of its acts or the acts of its officials or members as it may be appropriate to consider. It will only be if something has arisen independently of s.171C that there will be a case where an invalidity may have arisen. If it has, the Court has jurisdiction in an appropriate case to give the relief for which s.171C provides.

It is for those reasons that I have difficulty in perceiving why there is here an invalidity for the purposes of the section. But in Allen and Ford re Laragy the Court said (supra at p.266):

"Apart from the operation of s.171C, the claimants are entitled to an order under s.141 directing the respondents to treat the resolution as

void and of no effect.

However, the organization has sought to invoke s.171C of the Act by an application (B No.144 of 1975) filed during the course of the proceedings. The substance of this application is to tidy up some of the complex and unhappily worded provisions of the new rule which relate to time to pay. In the form finally sought, the proposals would certainly remove some of the uncertainty and ambiguity in the rules passed by the organization. However, because of the view which we take of the substantial issues involved, it is not necessary for us to detail those difficulties or the proposed method of overcoming them.

The application to invoke s.171C was resisted on behalf of the claimants on the ground that s.171C, "so far as it is concerned with amendments to rules, is attracted only by invalidity in the circumstances of the rule amendment and not in its form. In our opinion this is not so.

It would be an odd result indeed if this court were to grant the claimants an order that the respondents treat the purported rule change 'as null and void and of no legal effect' while at the same time saying that it was not invalid within the meaning of s.171C.

It is true that the definition of 'invalidity' for this purpose in s.171A is particularly concerned with what might be called indirect invalidity - some defect arising from surrounding circumstances rather than from the form of a purported decision, resolution or amendment of rules. But this, in our view, is only because such invalidity is less obvious and needs stressing. The ordinary meaning of the word, extended by the definition section to include nullity and 'any invalidity or nullity resulting from any omission, defect, error, irregularity . . . .', is amply sufficient to comprehend an attempted rule change which is found to be invalid because it is oppressive, unreasonable or unjust within the meaning of s.140(1)(c) of the Act.

We think that this court, upon application, can take jurisdiction under s.171C in such a case even though the purported rule has not been certified under s.139(4) so as to give the court direct jurisdiction under s.140. For the reasons already given, we therefore declare that an invalidity has occurred in the alteration of the rules of this organization."

The principal application in that case appears to have been an application

under s.141, not s.140. That probably accounts for the fact that the Court did not need to consider whether the case fell within the first or the second limb of sub-section (5D) (then sub-section (2)). Those circumstances may provide reasons why this case is distinguishable from Allen's case. But the statements made by their Honours are made as having general application and I would not wish to rely on any narrow point of distinction in order to justify not following what they have said. Of course the decision is a decision of the Industrial Court. Strictly it is persuasive authority only and not binding upon me even though I sit only as a single judge. But the weight to be given by this Court to any decision of the Industrial Court must always be great. Furthermore, two of the Court in Allen's case are presently members of this Court: That provides an additional reason why the case should be followed. Yet a further reason is provided by the fact that the decision has stood since 1975 and has no doubt been acted upon by industrial organisations and their members, as well as those who advise them. For all those reasons I am satisfied that I should not depart from what was decided in Allen's case.

Accordingly, I conclude, not without some hesitation, that there is here present an invalidity within the meaning of s.171C of the Act.

The next question is whether I should grant the relief sought. This question can only be resolved after a consideration of the nature and effect of the amendments which the Council of the Association has purported to make, particularly from the point of view of whether they contravene s.140 of the Act. On behalf of Mr. Squires it was submitted that a number of them do. If that submission be accepted, it would seem to me to follow that the application, at least so far as it concerns rules found to be in contravention of the section, must fail. In my opinion the section ought not to be used to validate rules which contravene other provisions of the Act, in this case s.140. The Court's discretion under s.171C is a wide one. But it would not be a proper exercise of it to rectify the invalidity of an act which itself would have the effect of writing into an organisation's constitution provisions which contravened the very statute by which such an organisation was regulated and to which it owed its corporate existence.

I turn to consider the amendments which the resolution of 8 September, 1982, purports to effect. I deal with them in the order in which I referred to them when stating my understanding of the nature and effect of each (pp.9-10 hereof). That will mean I will deal first with those directly affecting the manner in which the Association may amend its rules and, secondly, with those having a more general field of operation.

My views are as follows:-

(a) This amendment is plainly desirable and in no way contravenes s.140 of the Act.

(b) In stating the effect of amended Rule 32 I said that the express power to amend the rules remains vested in the Federal Council, but subject to the need to consult the membership at general meetings. I used the expression "express power" because of submissions made on behalf of the Association that it would be open to the membership, Rule 15(d) having been deleted, to amend the rules at a general meeting or to invoke the plebiscite provisions of Rule 22 for that purpose. On behalf of Mr. Squires it was submitted that the provisions of the new paragraph 32(b) operated to make amendments by the Council under Rule 32 the only method by which the rules could be amended.

The paragraph, of course, should be read in context. Paragraph (a) merely operates to empower the Council to amend the rules. The fetter previously imposed by Rule 15(d) on the control of the membership of the Council having been removed, it could be said that the power of general meetings was unlimited and must include power to amend the rules. It is to be remembered that the opening words of Rule 12(A)(a) constitute the Council as the supreme governing body of the Association but "subject to the control of the Association by the members in accordance with these Rules". That, in the Association's submission, notwithstanding the terms of paragraph 32(b), must include the question of whether the rules should be amended in a particular respect.

In my opinion the question of construction which is involved is not free from difficulty. Having given the question due consideration, I have, however, reached the conclusion that the provisions of paragraph 32(b), dealing specifically as they do with the question of rule amendment, operate to make the procedure provided for in the amended Rule 32 the only method by which rules may be amended. If the amended rule comes into force, the Council will be vested with sole power to effect amendments. True its power will be subject to endorsement by a general meeting of members as provided for in paragraphs (c) and (d); but it would not be open to the membership at a general meeting or by means of a plebiscite for which members had petitioned to initiate and pass amendments. Unless the Council itself proposes the amendment and passes it, there is no means of bringing it about. I acknowledge that general meetings of members or individual members may propose or suggest amendments to Council, but unless a majority of members of Council approve an amendment, it can go no further.

Upon the basis that that is the meaning and effect of the new Rule 32, I have no hesitation in saying that the rule contravenes paragraph 140(1)(c) and the objects specified in paragraph 2(f) of the Act. In my earlier judgment I emphasised the fundamental importance which the amendment of rules has in the affairs of an organisation. This has been stressed by many judges, particularly by those who constituted the Court in Roots v. Mutton (1978) 32 F.L.R.15 and in Morris v. Federated Liquor and Allied Industries Employees Union of Australia [1978] FCA 35; (1978) 35 F.L.R. 60. The new Rule 32(b) operates to take out of the hands of the membership all power to amend the rules.

Strictly, I do not need to say more of Rule 32. But another matter of substance in relation to it was argued and it is useful that I express a view on it. If paragraph 32(b) of the amended rule be deleted, some may say that there is no further problem. With the deletion of Rule 15(d) amendments to the rules might then be made at general meetings, by plebiscite under Rule 22 or pursuant to the procedure provided for in the new Rule 32, paragraphs (c) and (d) of which would sufficiently involve the membership. But on behalf of Mr. Squires it was submitted that nothing short of a provision making it obligatory for proposed rule amendments to be put to a plebiscite would do.

I must confess that I was tentatively against this submission during the argument which took place. Plebiscite provisions have the disadvantage of being unwieldy and inflexible. Some persons may vote against a proposal (or for it) because of a misunderstanding as to its effect which could have been removed by discussion at a meeting. Or they may be against it because of some minor criticism of what it provides, a criticism which may have been overcome either by amendment or by discussion at a meeting putting doubts to rest. True it is that where a plebiscite is being held, members may be called together to enable them to voice criticism of what is proposed and to allow them generally to discuss the proposal. But eventually it has to be put. No further change can then be made. It will stand or fall in the form in which it is submitted to members.

On the other hand the members of the Association find it difficult to meet. At any given time one-third to one half are out of Australia. Some are stationed permanently in London. Many of those who are not away on duty live in places comparatively remote from Sydney. There may be many reasons why such members will not be able to attend meetings. And, apart from any of these considerations, it may be expected that the membership of this organisation will have, in common with those of many others in this community - and I refer not only to industrial organisations - the apathy and lack of interest which are so often present.

These difficulties can be overcome in organisations whose membership is scattered by a provision enabling proxies to be appointed. But the rules of this organisation contain no provision permitting this to be done. A member may not vote at a general meeting unless he is present.

Certainly meetings may be held in series, but the experience of the attendance at the four meetings held in relation to the amendments now under consideration is not encouraging. Of approximately 1,800 members only 120 or thereabouts were present overall. A quorum for a general meeting is understandably small - 30 members. If amendments could be made at a general meeting, a minority of members lobbied by a particular faction might easily achieve a result contrary to that favoured by a substantial majority of members.

For these reasons I think I should, upon reflection, accede to the submissions put on behalf of Mr. Squires. The provisions of paragraph 140(1)(c) will, in my opinion, be contravened unless the rules provide that amendments thereto may only be effected by a plebiscite held pursuant to Rule 22. I feel strengthened in the view I have formed by statements in Mr. O'Connor's letter to the effect that it was the Association's practice in the past to make "major alterations" to the rules by plebiscite only.

My conclusions indicate some change in my thinking on this matter since I published my earlier reasons. That change has come about as a result of the argument which has been presented on this question and the further reflections I have had since I reserved my decision. I would add that I think my views would be different if a provision were inserted in the rules providing that members likely to be absent from general meetings might give proxies indicating their voting intentions to the chairman of the meeting or some other member likely to be present. I express no concluded view on that matter because it has not been the subject of any argument.

(c) In the circumstances of this Association I can understand the need for a telegram voting procedure. I would have thought, however, that it should only be used in cases of emergency. Furthermore providing for it only in the case of motions or questions of importance may be too limited. It may be highly desirable to have it in relation to matters of minor importance as well.

Although I have stated my views about this rule, I do not consider that the amended form of the rule offends s.140. The matter is one for the membership. I have said what I have because of the arguments addressed to me about the rule.

I would add that in saying what I have I have taken into account a matter put to me on behalf of the Association, namely that the telegram procedure often enables greater participation of members of the Council than is possible at a meeting. This is because of frequent absences of members overseas. I appreciate the force of this consideration, but the procedure has the same inflexibility as the plebiscite procedure and prevents the benefit of discussion which is so desirable at a council meeting. Furthermore, the secretary or any other member of the Council is always able to ascertain the views of most members by telegram, or preferably telephone. These can be conveyed to a meeting, though I acknowledge that the absent persons will not in those circumstances be able to vote.

(d) There could be no possible objection to this amendment.
(e) This amendment concerns the giving of notice of general meetings. I am totally opposed to a provision such as amended Rule 15(c)(iii) which provides for the giving of notice of a meeting by means of an advertisement in a newspaper. In my opinion such a provision, concerning as it does notice of a general meeting of members, plainly contravenes s.140. In the case of this Association I see no reason why the requirement should not always be that provided for in Rule 15(c)(ii), that is notice by "a letter, circular, telegram or written notice to the member". However, telegrams should only be used in cases of emergency. Really I would think that all the provision need say is "by written notice (including, in cases of emergency, a telegram) to the member". In case I have not made myself clear I expressly state that I regard the provisions of Rule 15(c)(i) as undesirable. I would also note in passing Rule 27 which contains the usual provision that notices may be sent to any member if they be addressed to him at his last address appearing in the register of members.

(f) On behalf of Mr. Squires it was submitted that it was wrong to delete the whole of Rule 15(d). It was said that the proper amendment was to delete the word "not" so that the rule would expressly make it clear that decisions of general meetings were to bind the Council. I do not think it matters which amendment is made. Rule 12(A)(a) opens, as I have mentioned, with the words, "The supreme governing body of the Association, subject to the control of the Association by the members in accordance with these rules shall be the Federal Council". If Rule 15(d) is deleted the problems referred to in my earlier judgment (pp.35-36) disappear. In my opinion the amendment involves no contravention of s.140.
(g) On behalf of Mr. Squires it was submitted that it was wrong to delete the provisions in Rule 15(e) concerning compulsory general meetings. In my opinion no contravention of s.140 is involved and the matter is one for the membership. It is not a matter upon which I feel it useful to express any view.

(h) This amendment is consequential upon that referred to in paragraph (g) above. It is not open to objection.

It remains to say something of the plebiscite rule. It has not been the subject of any amendment. It will be recalled that in my earlier judgment I expressed the view (p.39) that the percentage provided for before a members' ballot could be required should be reduced from ten to five. I have given the matter further thought, but see no reason to change my view. Accordingly the present form of Rule 22(1)(b) continues to contravene s.140 of the Act.

In summary, my conclusions are that the amended Rule 32(b) (paragraph (b) above) and Rule 15(c)(paragraph (e) above) contravene s.140 of the Act. No other amended rule does so. Additionally, I have the misgivings about Rule 12(A)(g) (paragraph (c) above) which I have mentioned. The plebiscite rule, Rule 22, continues to contravene s.140; it has not been the subject of any amendment. I have used the expression "contravenes s.140 of the Act" in a general sense. For the purpose of what I am about to say it is not necessary to decide whether the three instances of contravention I have mentioned fall within the first or second limbs of sub-section 140(5D).

My conclusions lead to the further conclusion that, so far as amended Rules 32(b) and 15(c) are concerned, it would not be appropriate to make an order under s.171C of the Act to rectify the invalidity I have found to exist, that is the passing of the resolution of 8 September, 1982. To do so would give the Court's imprimatur to rules which were in contravention of a provision of the Act.

Should the application nevertheless be granted insofar as it concerns those amendments as to which there can be no exception? An initial difficulty about this course lies in the fact that the amendments, including those which contravene s.140, were purported to be passed by the resolution of 8 September, 1982. The passing of that resolution is the invalidity upon which the Court's jurisdiction to act depends. That jurisdiction is "to rectify or cause to be rectified the invalidity" (paragraph 171C(2)(a), i.e. the resolution of 8 September, 1982. It seems to me that there is a question as to whether the Court may act to rectify the resolution in part. If the Court has power so to do, the further question arises as to whether it should.

Apart from these considerations, there is the fact that the amendment proposals were put to the Council and to the members at the general meetings which were held as a package. Members of the Association and members of the Council may have approved them on this basis. One cannot know. Finally, there is a question as to the form of the provision, Rule 12(A)(g), which provides for the telegram voting procedure and the problem of the plebiscite rule, Rule 22, which is not affected by the amendments.

All these considerations lead me to think that it would be undesirable to take a course which would have the effect of validating in part what was attempted to be done by the resolution of 8 September, 1982. I think, therefore, that the application under s.171C (N.S.W. No.41 of 1982) should be dismissed in its totality. That is the order which will be made.

I can now return to the application V No.6 of 1981 for the purpose of determining what further orders, if any, should be made therein. Notwithstanding my rejection of the Association's application under s.171C, the resolution of 8 September, 1982, subject to s.139 of the Act, continues to have effect according to its terms. However, sub-section 139(4) provides that an alteration of the rules of an organisation to which the consent of the Industrial Registrar under the section is not required (this is such a case) does not have effect until particulars of the alteration have been filed and the Registrar has certified that, in his opinion, the alteration complies with and is not contrary to the provisions of the Act and regulations or of an award. The remaining part of the sub-section need not be referred to. Quite apart from views which the Industrial Registrar himself may have as to any of the amendments, it seems unlikely that he would certify those which I have found to be in contravention of s.140. Indeed he may take the view that none should be certified. For that reason some or all of the amendments, although in a sense validly passed, may never have effect.

That being the position, the substantial matter to be determined is how best the Association's rules can be satisfactorily and effectively amended. There are two courses of action open to me to achieve this end. I can act, as I have been asked to do by Mr. Squires, pursuant to sub-section (5D), thus bringing into play the provisions of sub-sections (5G) and (7), or I can act, as I have been asked to do by the Association, pursuant to sub-section (6) and adjourn the matter for a period. In that time the Association would be expected to take steps :-

(a) To rescind the resolution of 8 September, 1982.

(b) To formulate fresh amendments to the rules to take account of what I have said in both this judgment and the earlier one.

(c) If the Council of the Association thinks it helpful, to submit such suggested amendments to meetings of the membership to ascertain members' views thereon.

(d) In due course to hold a ballot (plebiscite) of members pursuant to Rule 22 for the purpose of determining whether the proposed amendments are to be made.

(e) Assuming, which seems probable, the amendments are approved, to submit the amendments to the Industrial Registrar pursuant to sub-section 139(4) of the Act.

Having reflected on the matter, I have decided that I prefer to act as suggested by the Association. That is subject to one matter which I shall mention in a moment. I have decided upon this course firstly, because I would prefer the Association itself to make the necessary amendments and secondly, because I fear that the period of three months provided for in sub-section 140(7) may not be sufficiently long for the Association itself to do what is necessary. I propose to grant liberty to all parties to apply so that if matters do not proceed as they should, the application V No.6 of 1981 may be restored to the list with a view to orders for declarations being made pursuant to sub-section (5D).7

The one matter of reservation referred to above concerns the order sought on Mr. Squires' behalf concerning Rule 15(d). The immediate abolition of that rule is, in my opinion, highly desirable. Although it has been deleted by the resolution of 8 September, 1982, it continues to have force and effect because the amendments have not been certified pursuant to sub-section 139(4). The probability is that that will never occur. I therefore propose to make an order pursuant to the first limb of sub-section 140(5D) concerning it. I have no doubt that it is that limb which applies; no argument to the contrary was put.

In summary the orders to be made will involve:-

(a) The dismissal of the Association's application (N.S.W. No.41 of 1982) under s.171C of the Act.

(b) The making of orders in terms of those numbered 4 and 5 referred to on p.3 hereof.

(c) The making of an order that it be declared that the whole of Rule 15(d) of the Rules of the Association contravenes sub-section l40(1) of the Act.

(d) The standing over of the balance of the outstanding matters in application V No.6 of 1981 for a period, say, of six months.

(e) The reserving of liberty to any party in that matter to apply on seven days' notice to the others.

I do not propose formally to make those orders today. I propose to stand the matter over for a short time to enable the parties and their legal representatives to consider what I have said. When the matter is again in the list counsel for the Association is to bring in short minutes of order to give effect to my decision.