Re Roger Copeland v John Parker; Larry White; Mike Mann; Adrian Dickie; John Kapene; Martin Sheehan; Peter Pohl; Lou Laribino and Amalgamated Society of Carpenters and Joiners of Australia (Intervener) [1991] FCA 36 (18 February 1991)

FEDERAL COURT OF AUSTRALIA

Re: ROGER COPELAND
And: JOHN PARKER; LARRY WHITE; MIKE MANN; ADRIAN DICKIE; JOHN KAPENE; MARTIN
SHEEHAN; PETER POHL; LOU LARIBINO and AMALGAMATED SOCIETY OF CARPENTERS AND
JOINERS OF AUSTRALIA (Intervener)
No. V I6 of 1991
FED No. 113
Industrial Law
(1991) 36 IR 284

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Gray J.(1)

CATCHWORDS

Industrial Law - registered organisation - rules - performance or observance - interim order - branch general meeting dismissing elected officers of branch - whether single resolution involved findings of guilt of each officer in relation to charges - whether matter capable of being resolved within organisation - whether assistant secretary could act as secretary while secretary ill - ability of one member to enforce rules in respect of all.

Industrial Relations Act 1988 s.209.

HEARING

MELBOURNE
18:2:1991

Counsel for the applicant: Dr C. Jessup QC, Mr D. Staindl

Solicitors for the applicant: Maurice Blackburn and Co.

Counsel for the respondents: Mr H. Borenstein

Solicitors for the respondents: Harry Nowicki and Co.

Counsel for Intervener: Mr M. Carn

Solicitors for Intervener: Maurice Blackburn and Co.

DECISION

On 13th February 1991, a rule was granted to the applicant, calling on the respondents to show cause why orders should not be made pursuant to s. 209 of the Industrial Relations Act ("the Act") 1988. The orders sought are that the respondents perform and observe the rules of the Amalgamated Society of Carpenters and Joiners of Australia ("the society") and of its Victorian branch ("the branch"), by refraining from holding themselves out to be officers of the society or the branch, by ceasing to occupy the premises of the branch at 76-78 Victoria Street, Carlton South, and by treating as null and void and of no legal effect a resolution passed at a branch meeting held on 12th February, purporting to dismiss from office the applicant and various other persons.

2. Before me today is a notice of motion, filed on behalf of the applicant, seeking certain interim orders pursuant to s. 209(4) of the Act. There is also a notice of motion filed on behalf of the respondents, by which interim orders are sought that would have the effect of giving to the respondents authority to operate the bank accounts of the branch and access to all of the books, documents and property of the branch. Dr Jessup QC and Mr Staindl of counsel appeared for the applicant to move the Court on his notice of motion. Mr Borenstein of counsel appeared for the respondents to oppose the applicant's notice of motion and to move the Court on their notice of motion. Mr Carn of counsel was granted leave to intervene, appearing for the society itself; the Court took the view, pursuant to s. 59 of the Act, that the organisation should be heard in the proceeding, it having interests of its own in the construction and validity of its rules.

3. The society is an organisation, registered pursuant to the Act. The branch is governed by its rules, which include a standard set of branch rules. It is necessary to refer to some of the provisions of those branch rules.

4. Under rule 7(a), subject to the control and direction of the members of the branch in meeting assembled, the government of a branch is vested in a branch committee of management, which consists of the branch president, one vice-president, a secretary/treasurer, an assistant secretary, two trustees and two committee men. Under rule 8(a), the officers and members of the branch committee of management assume office at the completion of the meeting of the branch in the year the election is held, and hold office for a period of four years, or until their successors take office.

5. On the evidence, elections were held which culminated in a declaration of the results in December 1989. In those elections, the applicant was elected as assistant secretary and Kevin Casey, J. Collins, A. Nanov, G. Benedetto, E. Bentley, J. Catterson and G. Bertucci were elected to the other positions which comprise the committee of management. Subsequently, Mr Casey, who was elected as secretary, has become unwell; he is in receipt of WorkCare payments and is not working. The evidence is that the applicant describes himself as the acting secretary/treasurer of the branch.

6. Under rule 12(a) of the branch rules, an officer of a branch or member of a branch committee of management shall cease to hold office if he is dismissed from office in accordance with the rules, or if he resigns from office by writing under his hand addressed to the secretary of the branch. Rule 12(b) provides for the circumstances in which an officer or member of the branch committee of management can be dismissed. It appears to accord substantially with the provisions of s. 195(1)(c) of the Act. It provides that there shall not be a dismissal from office unless a majority of members, present at the meeting of the branch, by resolution finds the person guilty, in accordance with the rules, of misappropriation of the funds of the society or the branch, a substantial breach of the rules of the society, gross misbehaviour or gross neglect of duty, or finds that he has ceased, according to the rules, to be eligible to hold his office. That provision is followed by a proviso which lays down the procedural requirements for the dismissal of an officer or member of the committee of management. Those procedural requirements involve at least fourteen days' notice in writing of intention to move a resolution and of the date and place of the meeting at which the resolution is to be considered and an opportunity of being heard by such meeting. The proviso requires the notice to include the particulars of the ground or grounds upon which it is proposed to consider removal from office. There is also a provision that, upon any such resolution being passed, the office named therein shall immediately become vacant.

7. Under rule 13(a) of the branch rules, meetings of the branch are held monthly, on the first Tuesday in each month. By virtue of rule 13(c), ten financial members is all that is necessary to form a quorum.

8. On the applicant's evidence, on 31st January he received a notice signed by Mr Parker and Mr Dickie, two of the respondents, indicating that certain charges were laid against him and that resolutions would be moved at the next general meeting of the branch on 12th February, which would have the effect of removing him from the offices which he held. In the notice which he received, there were specified two charges. One was that the applicant was guilty of substantial breaches of the rules of the society committed in 1989 and 1990. The other was that the applicant was guilty of gross neglect of duty committed in 1989 and 1990. Each of the charges was followed by a considerable number of particulars, all of which appear to turn on the proposition that there existed a deficiency in branch funds exceeding $100,000. There has been little debate on the particulars of the charges today. It is sufficient to say that a reading of them, together with the branch rules, suggests that the framer of them exercised a fair degree of imagination in connecting specific provisions of the rules with the alleged guilt of the applicant. There is evidence that the charges were posted to the applicant, and to the other persons who had been elected to the branch committee of management, at Port Melbourne on 25th January.

9. There is also evidence that the other members of the committee of management received charges in a form similar to those directed to the applicant, with the possible exception of G. Benedetto, whose notice was received at the office of the branch on or about 6th February, it having apparently been redirected from his home address.

10. On 12th February, the general meeting of the branch took place in accordance with rule 13(a). Copies of the charges were handed to persons who entered the meeting; the evidence is that some 120 copies were distributed. In the course of the meeting, a single motion was moved and seconded with respect to the members of the committee of management. During the course of the debate on that motion, there was a closure motion moved. A closure motion is provided for by rule 24(2)(m) of the branch rules, which is part of the standing orders of the branch, applicable to the conduct of meetings. The closure motion was passed by forty-eight votes to forty-seven. Thereupon, the original motion was put to the meeting and was passed by fifty-five votes to forty-five votes.

11. There is some contention on the material before me as to the precise form of the resolution which was passed. In a second affidavit of the applicant, which is filed in support of his notice of motion, the text is put as follows:
"That the Executive of the A.S.C. and J. Victorian

Branch be dismissed because of their
incompetence and replaced by more competent members."

An affidavit of the respondent Mr Parker takes issue with the text of that resolution and says that his recollection of the resolution was that it was in the terms that appear in the notice of charge. Unfortunately, Mr Parker does not say which of the charges the motion followed in its terms. It appears that, upon the passage of that resolution, there was another resolution passed, by which the respondents were purportedly appointed to the various offices and positions that make up the branch committee of management. They have subsequently held themselves out as occupying those positions; in particular there have been returns lodged with the Industrial Registrar under the Act, purporting to contain the names of those persons as holding various offices in the branch. There is also some suggestion on the part of the applicant that he and the other persons who were elected to the branch committee of management have been excluded from the premises which comprise the branch office, although there is some dispute arising from the affidavit of Mr Parker as to the extent to which that has occurred.

12. One of the major difficulties concerning the operation of the branch arises from the question of authority to sign in respect of bank accounts. It appears from the material that the bank at which the branch's accounts are kept had refused to recognise any attempt to operate them, because of uncertainty as to who was in office. The Court was informed from the bar table that correspondence had been received; indicating that the bank is prepared to act on the existing authorities, for the purpose of paying wages to those who are entitled to them, but otherwise is not prepared to recognise any signatures at the present time. This fact, in itself, gives rise to the necessity for the Court to resolve on an interim basis the question of who should conduct the affairs of the branch until the trial of this proceeding.

13. It seemed to be common ground among the parties that, in deciding whether to make interim orders under s. 209(4) of the Act, I should apply the test of asking whether there is a serious question to be tried and of examining the balance of convenience. I do remain unconvinced that this is necessarily the appropriate test, but I shall examine, firstly, the question of the case that the applicant makes out to overturn the resolutions of the meeting of 12th February and, secondly, and probably in conjunction with that issue, the question whether there is any balance of convenience one way or the other.

14. The factual issue as to the terms of the resolution purportedly dismissing the applicant and his colleagues is one that cannot be resolved finally today. It does seem to me that for the purposes of these notices of motion, I should act on the basis that the evidence discloses a resolution in the terms alleged by the applicant. I do that not only because he has set out in his affidavit the terms in a form indicating that he is setting out the precise words, whereas Mr Parker is somewhat vague about the terminology of the resolution, but also because it has been agreed between the parties that there is in existence a minute book which purports to show the terms of the resolution and which shows it in the terms which the applicant has set out. If indeed the resolution is in those terms, it is abundantly clear that no step in accordance with rule 12 of the branch rules has been taken to dismiss the applicant or any of his colleagues from their office. It is necessary under branch rule 12, and necessary indeed for compliance with the Act, that any meeting purporting to dismiss officers of the branch do so only after a finding of guilt in terms laid down by the rules. A finding of incompetence is clearly insufficient. Even if it were the case, as Mr Parker suggests, that there was a resolution following the terms of one of the charges, that fact would not give me great confidence that the meeting had understood properly its function, which was to find each of the office holders guilty of a specific offence if they were to be dismissed. I inquired of counsel for the respondents as to which of the charges was the basis of the resolution on his version. His answer seemed to indicate that he believed it to have been the charge of gross neglect of duty and that the other charge had simply not been dealt with. That fact in itself does not indicate an appreciation by the meeting of its function. It is difficult to imagine that if the meeting dealt with a single resolution, it dealt with it on the basis that the minds of those present at the meeting were applied separately to the question of the guilt of each of the officers of the offence or offences with which that officer was charged specifically.

15. It is said by counsel for the respondents that the evidence may ultimately show that the applicant and his colleagues accepted the proposition that the resolution should be dealt with in a specific way. Even if they had done that, it is very doubtful whether the resolution could be valid in accordance with rule 12 of the branch rules to effect their dismissal from office. It will be recalled that rule 12 requires either dismissal in accordance with rule 12(b) or resignation. Mere consent to a meeting dealing with a resolution in a particular way may not be sufficient to satisfy those criteria.

16. It follows from what I have said that there is a strong case on the evidence before me, suggesting that the applicant will be entitled to final relief at the trial.

17. There are also various other issues which will no doubt arise at the trial. Counsel for the applicant informed me that the applicant intends to raise the issue of the time of notice of charges laid down by rule 12(b), the issue of the form of the particulars to the various charges and the question whether the general provision relating to closure motions is applicable to the procedure under rule 12. There is also a question which arises under rule 8, as to whether the respondents have been appointed in accordance with the rules to fill the offices which they purport to fill, even if a casual vacancy in respect of each of those offices has occurred. The relevant provisions are found in rule 8(f). They are provisions which certainly raise the argument that there needs to be an election of the whole of the branch membership in order to fill each casual vacancy and that the only power to fill such a vacancy is a power to fill it by appointment pending such an election. That question is arguable in each direction.

18. Counsel for the respondent suggested that I should make interim orders in accordance with s. 209(4) of the Act, intended to further the resolution within the organisation concerned of the matter the subject of the application. He pointed to the provisions of rule 24(1)(b), under which the second item in the order of business at meetings of a branch is the reading and confirmation of minutes, and rule 24(2)(q), which is a standing order permitting a member to move for the rescission of a resolution, after giving fourteen clear days' notice in writing to the branch secretary of an intention to negative an earlier resolution. The suggestion seemed to be that at the next ordinary meeting of the branch, on the second Tuesday in March, it would be possible for the meeting itself to resolve, on the question of confirmation of the minutes, what the true text of the resolution of 12th February was and it would then be possible for the applicant, if he had given the appropriate notice, to seek rescission of the resolution. The difficulty with this argument is that, if indeed the resolution of 12th February was entirely inappropriate with respect to branch rule 12, then there is nothing to rescind, so far as the effect on the holding of office by the applicant and his colleagues is concerned. In addition, if a rescission motion were not to receive the necessary two-thirds majority, the question would still remain as to whether the resolution of 12th February was or was not valid.

19. There is a further difficulty, of course, as to what would happen in the meantime and as to whether, if the resolution of 12th February were to be rescinded, the applicant and Mr Casey would be entitled to be paid for holding office in the intervening month. For those reasons, I do not regard it as appropriate to make orders of the kind sought by counsel for the respondents in this respect.

20. By way of the balance of convenience, counsel for the respondents put several other submissions. He submitted that there is no rule under which there can be an acting secretary/treasurer, the implication being that the applicant does not hold such a position and is not properly a signatory to any of the bank accounts. Rule 10 of the branch rules provides for the powers and duties of the officers of the branch. Under Rule 10(e), one of the trustees, with the secretary, is required to sign all instruments for the withdrawal of money from the branch's bank. Under rule 10(f), the duties of the assistant secretary are to assist the secretary in the carrying out of his powers and duties under the rules and perform such other duties appertaining to his office as the branch, the branch committee of management or the secretary may direct from time to time. On the basis that the occupant of the office of secretary is ill and unable to perform his duties, it does not seem to me that there is any reason why the branch committee of management should not act under rule 10(f) and appoint the assistant secretary to perform those duties, and, therefore, why the assistant secretary should not be capable of signing withdrawals from the bank account in conjunction with one of the trustees.

21. Reference was also made to an auditor's report presented in December, in which the auditor commented on what had apparently been a practice within the branch, of one of the signatories signing cheques before they were filled out and before they were signed by the secretary. The auditor, not surprisingly, recommended against that practice. It is said in the affidavit of Mr Parker that there is some evidence that that practice has continued, notwithstanding the recommendation of the auditor. Those matters, of course, are serious matters and should not be taken lightly. The question is whether their weight is sufficient to balance the factors the other way in respect of this application.

22. It was also suggested by counsel for the respondents that, because the applicant brings this proceeding alone and does not purport to bring it on behalf of the other persons who were purportedly dismissed from office, that should be a factor of great weight in the balance of convenience. Of course, under s. 209 of the Act, it is open to any member to bring an application to enforce the rules of an organisation and the applicant is able to remedy any breaches of those rules, not only in respect of himself but in respect of anybody else. Indeed, it is of fundamental importance to the members and to the organisation as a whole that the rules should be observed and acted upon by all the members. The applicant may properly be regarded as bringing his application on behalf of the membership of the organisation.

23. A second suggestion was that only the applicant should be returned to his position of assistant secretary, pending the trial of the proceeding. In my view that would be undesirable. It would not assist to have one person put back amongst a hostile, or potentially hostile, committee of management. It must be recalled that some of the respondents were persons who stood for office at the last elections for the branch committee of management and were defeated by substantial majorities by those who have now been purportedly dismissed from their offices.

24. The overwhelming factor in the balance of convenience is closely related to the principal question, namely, whether the applicant and his colleagues were dismissed effectively from their offices. It is my view that, on the evidence before me at present, the strength of the case that they were not properly dismissed is quite high. It would, therefore, take a very considerable weight of factors on the other side to induce the Court not to return them to office pending the trial of the proceeding. There is a substantial risk that, if the respondents are simply allowed to continue to hold the offices which they purport to hold, the acts which they perform in those offices pending the trial may turn out to have no validity whatsoever.

25. For those reasons, it seems to me that I should make the orders sought on the applicant's notice of motion or something like them. It follows that I should dismiss the respondents's notice of motion because, if they are not to occupy the offices which they claim to occupy at the moment, they will have no business in operating the bank accounts or in controlling the books and documents of the branch. I therefore order in the following terms: that, pending the hearing and determination of this proceeding or further order, the respondents and each of them:

(a) refrain from holding themselves out to be officers or
members of the branch committee of management of the
Victorian branch of the Amalgamated Society of
Carpenters and Joiners of Australia;
(b) cease to occupy the premises at 76-78 Victoria Street,
Carlton South; and
(c) treat as null and void and of no legal effect the
resolution purportedly passed at a meeting of the
Victorian branch of the Amalgamated Society of
Carpenters and Joiners of Australia on 12th February
1991, whereby the applicants, Kevin Casey, J. Collins,
A. Nanov, G. Benedetto, E. Bentley, J. Catterson and
G. Bertucci were dismissed from office.