Re Zvonko Kasum v Operative Painters and Decorators Union of Australia [1993] FCA 64; (1993) 40 FCR 444 (1993) 117 ALR 447 (26 February 1993)

FEDERAL COURT OF AUSTRALIA

Re: ZVONKO KASUM
And: OPERATIVE PAINTERS AND DECORATORS UNION OF AUSTRALIA
No. V I7 of 1993
FED No. 86
Number of pages - 13
Industrial Law
[1993] FCA 64; (1993) 40 FCR 444
(1993) 117 ALR 447

COURT

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

CATCHWORDS

Industrial Law - registered organisation - membership - entitlement to be admitted - whether declaration can be made of entitlement at a date prior to commencement of proceedings - whether organisation can be ordered to treat a person as a member from such date.

Industrial Relations Act 1988 ss. 253, 261.

Industrial Relations Regulations reg. 98.

Conciliation and Arbitration Act 1904 s.144.

R. v. Dunphy; Ex parte Maynes [1978] HCA 19; (1978) 139 CLR 482.

Re Keystone Knitting Mills' Trade Mark (1929) 1 Ch 92.

Cook v. Crawford (1982) 62 FLR 34.

Turner v. Australian Coal and Shale Employees' Federation [1985] FCA 356; (1984) 6 FCR 177.

Re Keogh v. Federated Clerks Union of Australia; Ex parte Linehan [1979] FCA 100; (1979) 40 FLR 445.

Troja v. Australasian Meat Industry Employees' Union (Victorian Branch) (1978) 46 FLR 340.

Ford v. Merchant Service Guild of Australia (1987) 16 FCR 302.

Australian Iron and Steel Limited v. Australasian Coal and Shale Employees' Federation (1957) 1 FLR 54.

Drake v. Australian Workers' Union (1976) 20 FLR 399.

Co-operative Bulk Handling Limited v. Waterside Workers' Federation of Australia [1980] FCA 141; (1980) 49 FLR 355.

Pickersgill v. Seamens Union of Australia (1990) 32 IR 308.

HEARING

MELBOURNE, 19 February 1993
26:2:1993

Solicitors for the applicant: Rennick Gaynor Kiddle Briggs

Counsel for the applicant: C. Fenwick

Solicitors for the respondent: Slater and Gordon

Counsel for the respondent: A.M. North QC and M. Hickey

ORDER

THE COURT ORDERS THAT the preliminary question be answered as follows:
Question: Does s.261 of the Industrial Relations Act l988

empower the Court to order that the applicant
has been a member of the Operative Painters and
Decorators Union of Australia from a date prior
to 4th February 1993?
Answer: No.

(Note: Settlement and entry of orders is dealt with by O.36 of the Federal Court Rules.)

DECISION

GRAY J. The Operative Painters and Decorators Union ("the Union") is an organisation of employees, registered pursuant to the Industrial Relations Act 1988 ("the Act"). Pursuant to the provisions of Division 7 of Part IX of the Act, a ballot has been held of the members of the Union, for the purpose of determining whether a proposed amalgamation of the Union with the Construction, Forestry, Mining and Energy Union, the Federated Furnishing Trade Society of Australasia and the Victorian State Building Trades Union should proceed. A majority of the members of the Union who voted in that ballot cast votes in favour of the proposed amalgamation. There were also favourable results of ballots in some of the other organisations involved in the proposed amalgamation.

2. By virtue of s.253M of the Act, application may be made to the Court, as prescribed, for an inquiry by the Court into alleged irregularities in relation to a ballot concerning a proposed amalgamation. Regulation 98(1)(aa) of the Industrial Relations Regulations prescribes that such an application must be made by a member of the organisation whose members were eligible to vote in the ballot. On 20th January 1993, there was lodged in the Victoria District Registry of the Court a document purporting to be an application for an inquiry relating to the ballot of the members of the Union. That document was given the number VI 6 of 1993. It named as applicant Zvonko Kasum, the applicant in the present proceeding.

3. On 18th January 1993, the applicant attended at the office of the Victorian branch of the Union. He completed an application form for membership, as required by rule 5(1) of the rules of the branch. Rule 5(1) of the rules of the Union provided that all candidates for admission should sign an application form, should be nominated by two financial members of the Union and that such application should be submitted for approval to a general meeting or a meeting of the management committee of the branch. Rule 5(1) of the rules of the branch contained similar provisions, except that it required that the application be submitted for approval to a meeting of the executive committee of the branch. In each case, the rule provided that, "On approval they shall be admitted on probation for a period of six months, during which time it shall be competent for any member to challenge their admission." The applicant's application for membership was not submitted to any meeting in the two days which elapsed between his attendance at the branch office of the Union and the filing of his purported application in no. VI 6 of 1993. It seems clear, then, that he did not become a member in accordance with the rules of the Union. This was conceded by his counsel.

4. On 4th February 1993, the applicant applied for and was granted the rule to show cause which commenced the present proceeding. That rule to show cause was granted under s.261 of the Act. It sought orders that the applicant be declared to be entitled to be a member of the Union and to have been a member of the Union since 18th January 1993.

5. On the return of the rule to show cause, on 5th February 1993, the Court ordered, pursuant to O.29 r.2(1) of the Federal Court Rules, that a question of law be tried separately from any other question in the proceeding. In its amended form, that question is whether s.261 of the Industrial Relations Act 1988 empowers the Court to order that the applicant has been a member of the Union from a date prior to 4th February 1993.

6. The relevant provisions of s.261 of the Act are as follows:

"(1) Subject to any award or order of the Commission, a
person who is eligible to become a member of an organisation
of employees under the eligibility rules of the organisation
that relate to the occupations in which, or the industry in
relation to which, members are to be employed is, unless of
general bad character, entitled, subject to payment of any
amount properly payable in relation to membership:
(a) to be admitted as a member of the organisation; and
(b) to remain a member so long as the person complies with
the rules of the organisation.
......
(5) Subsections (1) and (3) have effect in spite of
anything in the rules of the organisation concerned, except
to the extent that they expressly require compliance with
those rules.
.......
(7) Where a question arises as to the entitlement under
this section of a person:
(a) to be admitted as a member of an organisation (whether
for the first time or after having resigned, or been
removed, as a member of the organisation); or
(b) to remain a member of an organisation;
application may be made to the Court for a declaration as to
the entitlement of the person under this section by any of
the following:
(c) the person;
(d) where the person is an employee - a person who is or
wants to become the employer of the person;
(e) where the person is an independent contractor - a
person who is or wants to be a contractor for the
services of the person;
(f) the organisation concerned.
(8) On the hearing of an application under subsection (7),
the Court may, in spite of anything in the rules of the
organisation concerned, make such order to give effect to
its declaration as it considers appropriate.
(9) The orders which the Court may make under subsection
(8) include:
(a) an order requiring the organisation concerned to treat
a person to whom subsection (1) or (3) applies as
being a member of the organisation; and
(b) in the case of a question as to the entitlement under
this section of a person to be admitted as a member of
an organisation, where the person has previously been
removed (whether before or after the commencement of
this section) from membership of the organisation - an
order that the person be taken to have been a member
of the organisation in the period between the removal
of the person from membership and the making of the
order.
(10) On the making of an order as mentioned in paragraph
(9)(a), or as otherwise specified in the order, the person
specified in the order becomes, by force of this section, a
member of the organisation concerned.
(11) Where:
(a) an order is made as mentioned in paragraph (9)(b); and
(b) the person specified in the order pays to the
organisation concerned any amount that the person
would have been liable to pay to the organisation if
the person had been a member of the organisation
during the period specified in the order;
the person shall be taken to have been a member of the
organisation during the period specified in the order.
......".

7. The argument put by counsel for the applicant was that s.261(1) gives a continuing right to any person who falls within its terms to membership of the relevant organisation. A declaration can therefore be made under subs. (7) as to the existence of such a right at a date anterior to the commencement of the proceeding in which the declaration is made. In the exercise of its power under subs. (8), the Court may make an order giving effect to its declaration by directing that the person entitled to the declaration is to be treated as having been a member from the date by reference to which the declaration is made.

8. It is a well established rule that, "In general the order of a court speaks as to the rights of the parties as at the commencement of the proceedings in which the order is made." See R. v. Dunphy; Ex parte Maynes [1978] HCA 19; (1978) 139 CLR 482, at p 495, in the judgment of Mason J., with whom Barwick C.J., Stephen and Aickin JJ. expressed agreement. See also Re Keystone Knitting Mills' Trade Mark (1929) 1 Ch 92. The discussion of this principle is ordinarily in the context of a determination whether the rights of parties to litigation can be affected by events occurring after the commencement of the litigation. That was the context in which the principle was discussed in the two cases to which I have referred and in Cook v. Crawford (1982) 62 FLR 34, at pp 42-45 in the judgment of Smithers J., p 74 in the judgment of Keely J. and pp 102-105 in the judgment of Sheppard J. Discussion of the application of that principle with respect to applications under s.144 of the Conciliation and Arbitration Act 1904, a provision replaced by s.261 of the Act, occurred in Turner v. Australian Coal and Shale Employees' Federation [1985] FCA 356; (1984) 6 FCR 177, at pp 187-188. The Full Court held that there might be circumstances in which a person entitled to a declaration and an order at the date of commencement of proceedings became disentitled by events occurring between that date and the date of judgment. These authorities do not assist in dealing with the question whether the Court can order that a person became a member at a time prior to the making of any application. It is worth noting, however, that the Full Court in Turner recognised that the applicant in that case ought to have been admitted to the relevant organisation on his having applied for admission at a date earlier than his application to the Court. Nonetheless, the relevant declaration was made only by reference to the date of application to the Court. See Turner at pp 193 and 195-196.

9. There can be no doubt that a person who has acquired a right may be entitled to a declaration that that right has been acquired prior to the commencement of the litigation in which the declaration is made. In that sense, a declaration can be made retrospectively; it recognises that, when the facts and the law are examined as they stood at the date when the litigation was commenced, the right had already been acquired on an earlier date. The issue in the present case is, therefore, whether s.261 of the Act, properly construed, gave to the applicant, at a date prior to 4th February 1993, a right which can be the subject of a declaration under subs. (7) and an order under subs. (8).

10. Section 261(1) does not provide that any person is to be deemed, or taken, to be a member of an organisation. Nor does it provide that any person is to become a member of an organisation by operation of subs. (1) alone. In its terms, it provides for the entitlement of a person "to be admitted" as a member of an organisation. The words are prospective. The right is only to become a member after some process which constitutes admission. The later provisions of the section set out how this admission is to be perfected. It is necessary for the Court first to make a declaration under subs. (7) of the entitlement of the person "to be admitted as a member" of the organisation. The Court must then consider what order it should make pursuant to subs. (8) to give effect to its declaration. An order which may be made under subs. (9)(a) is an order requiring the organisation concerned to treat a person as being a member. Finally, the person specified in the order becomes a member of the organisation concerned by force of the section, as is provided in subs. (10).

11. The provisions to which I have just referred are similar to those in the former s.144. It is instructive to see what authority existed as to the nature of the right given by that section. In Re Keogh and Federated Clerks Union of Australia; Ex parte Linehan [1979] FCA 100; (1979) 40 FLR 445, at pp 449-451, J.B. Sweeney J. discussed the nature of the right conferred by s.144. At p 450, his Honour said:

"What it does is to give a dual right to those persons who
are not of general bad character and who are eligible for
membership in an organization under a constitutional rule,
firstly, to be admitted to the union and, secondly, to
remain a member so long as they comply with the rules.
Clearly such persons are not, until the order of the court,
members. This is a very limited right."

In Troja v. Australasian Meat Industry Employees' Union (Victorian Branch) (1978) 46 FLR 340, the Full Court rejected an argument that s.144 operated in such a way that a person desiring to join and paying an amount properly payable in respect of membership became a member of an organisation automatically. The argument is dealt with at pp 350-351 in the judgment of Keely J., with whom the other two members of the Court expressed agreement. His Honour relied on the structure and terminology of s.144 as being inconsistent with the argument. At p 351, his Honour said:

"In my view s.144(6) shows a clear legislative intention that the
person concerned shall not be a member until the happening of one
of two possible events - either his admission to membership by act
of the organization or his becoming a member of the organization
"by force of" the Act - an event which only occurs upon the making
of an order by the court under s.144(6)."

In Forward v. Merchant Service Guild of Australia (1987) 16 FCR 302, at p 304, French J. referred to the dual right said to be granted in Re Keogh and noted that the right carried with it a correlative obligation on the part of the organisation to admit the person so entitled, citing Australian Iron and Steel Ltd. v. Australasian Coal and Shale Employees Federation (1957) 1 FLR 54, at p 56. The reference should be to p 66. These authorities are inconsistent with the proposition that any right to be regarded as a member prior to the commencement of proceedings was provided by s.144. To the extent to which s.261 repeats in substance the provisions of s.144, these authorities establish the law.

12. The major difference between s.261 and s.144 is that the current provision applies expressly to a person who has been a member of an organisation and has been removed from membership. In the case of such a person, express provision is made for retrospectivity by subs. (9)(b) and subs. (11). The Court may order that the person be taken to have been a member of the organisation in the period between the removal of the person from membership and the making of the order. If such an order is made, and if the person concerned pays amounts which he or she would have been liable to pay if membership had continued, by force of subs. (11) the person is to be taken to have been a member during the period specified in the order. These provisions would be unnecessary if the general powers found in s.261 permitted the Court to back date the membership of an applicant. Their express inclusion is a strong indication that the general powers are not to have that effect.

13. If s.261(1) had the effect for which counsel for the applicant contended, it would be difficult of application and inconvenient. Any person who satisfied the criteria of the subsection could be the subject of a declaration that he or she had satisfied those criteria at a date prior to the commencement of any proceeding under the section, and to an order that such person was to be treated as a member of the organisation concerned from that date. Thus, rights to membership could be claimed retrospectively for periods of many years. The relationship between such retrospective membership and the rights and entitlements of other members under the rules of an organisation, the Act, or awards made under the Act, would be entirely unclear. The relationships between a person obtaining such a retrospective order and other persons, such as employers and other members of the organisation, and the relationships between the organisation concerned and other persons, such as employers and other members of the organisation, would be unclear, especially in the case of persons who were not parties to the relevant proceeding. It is worth noting that, if the applicant in the present case is entitled to the relief that he seeks, the rights of members of the Union and of the organisations other than the Union which are parties to the proposed amalgamation may be affected drastically. It is conceded by counsel for the applicant that, if the applicant is unable to obtain an order that he be treated as a member from a date prior to 20th January 1993, his purported application for an inquiry into the amalgamation ballot will be unable to proceed. If, on the other hand, he is to be treated as a member from an earlier date, the proposed amalgamation will be delayed until the inquiry is disposed of, even if the applicant does not succeed in persuading the Court that any irregularity occurred in relation to the ballot. Further, the Union, and perhaps other parties, will be put to the expense of contesting the inquiry.

14. It was said by counsel for the applicant that results such as those to which I have referred could be avoided by the use by the Court of its discretionary power to refuse to make retrospective orders where they would be inappropriate. Section 261(8) does give the Court a discretion as to the form of order which might be made to give effect to a declaration. Subsection (7) does not give any discretion as to whether a declaration ought to be made. If subs. (1) has the effect for which counsel for the applicant contends, the Court would be obliged to declare that membership existed as at the earlier date. The existence of a discretion not to order an organisation to treat a person as a member from that earlier date would only be productive of great confusion.

15. A major difficulty confronting the applicant's argument was the selection of a date earlier than the commencement of a proceeding under s.261, by reference to which a declaration could be made. It will be noted that s.261(1) is not predicated at all upon the making of an unsuccessful application to an organisation for admission to membership in accordance with its rules. A question as to the entitlement under the section of a person may arise within the meaning of subs. (7) in circumstances where no application for admission to membership under the rules has been made, and perhaps even where a successful application for admission to membership under the rules has been made. The former s.144 has been used to test the eligibility of persons who have purported to join organisations to do so. Examples may be found in Drake v. Australian Workers' Union (1972) 20 FLR 399 and Co-operative Bulk Handling Ltd. v. Waterside Workers' Federation of Australia [1980] FCA 141; (1980) 49 FLR 355.

16. The applicant's construction of s.261(1) would therefore mean that a person might be entitled to be granted membership rights retrospectively to a date prior to the institution of any court proceeding in respect of his or her membership of the organisation concerned, and without having made any attempt to secure admission in the normal way. In my view, clear words in the legislation would be required to produce that result.

17. Finally, there is authority directly contrary to the applicant's contention. In Pickersgill v. Seamens Union of Australia (1990) 32 IR 308, at p 310, Lee J. said:

"However, according to the terms of s. 261 a declaration of
entitlement to membership would be based upon entitlement at
the time of the order and not at the time the application
for membership was refused or the time the question of
entitlement to membership first arose."

In making this statement, his Honour appears not to have been informed as to the discussion which occurred in Turner, to which I have referred already. That in no way weakens the force of the statement to the effect that a declaration would not be based on entitlement at the time of any application for membership or of the arising of a question as to entitlement. I take the view that I should follow what his Honour said in that respect.

18. The preliminary question in the present proceeding must therefore be answered to the effect that s.261 of the Act does not empower the Court to order that the applicant has been a member of the Union from a date prior to 4th February 1993. I shall order accordingly. That order will not dispose of the proceeding, as it is still open to the applicant to proceed for a declaration as to his entitlement on 4th February 1993 to be admitted as a member of the Union and for any consequential order pursuant to s.261(8).