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Federal Court of Australia |
Last Updated: 1 June 1998
Workplace Relations Act 1996 , s 258
CARLO FRIZZIERO v FREDA BOGAR
NG148 OF 1998
JUDGE: WILCOX J
PLACE: SYDNEY
DATE:: 29 MAY 1998
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG148 of 1998 |
|
BETWEEN: | CARLO FRIZZIERO
Applicant |
|
AND: | FREDA BOGAR
Respondent |
JUDGE:
WILCOX J DATE: 29 MAY 1998 PLACE: SYDNEY
THE COURT ORDERS THAT:
1. The matter stand over until 9.30am on Friday, 12 June.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG148 of 1998 |
|
BETWEEN: | CARLO FRIZZIERO
Applicant |
|
AND: | FREDA BOGAR
Respondent |
JUDGE:
WILCOX J DATE: 29 MAY 1998 PLACE: SYDNEY
The proceeding came before me for directions on 11 March 1998 when both Mr Frizziero and Ms Bogar appeared by counsel. Mr W Haylen QC, for Mr Frizziero, indicated his client desired to obtain orders under s 258 of the Workplace Relations Act 1996 validating irregularities that had occurred in connection with the rule change. As the proposed orders had not been formulated, I adjourned the directions hearing until the following week. On 18 March the applicant filed an Application setting out proposed orders. On that day I made directions concerning notification to Union members of the desired orders and adjourned the directions hearing until 24 April. The directions included a requirement that a notice of the application be placed in the next edition of the magazine entitled "The Food and Confectionery World" and for written notice to each Regional Secretary of the Division by 31 March 1998. These directions were complied with. However, when the matter was called on 24 April 1998 no Union member, save Ms Bogar, appeared in opposition to the proposed orders. I made some directions regarding further affidavits and fixed the matter for hearing on 11 May 1998. Because of concern expressed by Ms Bogar's counsel about the cost to her of a hearing in Sydney, I directed the hearing be by videolink between Sydney and Melbourne. This method was used. Despite the fact that both counsel had to use the videolink to cross-examine the opposing party, I thought this method of proceeding entirely satisfactory. It saved appreciable expense.
The Rule Structure
The Union came into existence, in its present form, as a result of various amalgamations. The disparate interests of the members was recognised by the creation of five separate Divisions: Food and Confectionery, Vehicle, Printing, Technical and Supervisory and Metals. Each of these Divisions has its own officer bearers but, as one would expect, there are also National officers whose authority extends across all Divisions. The supreme governing body of the Union is the National Conference which ordinarily meets every second year, although there is provision for special conferences and decisions by postal ballots: see rules 3 and 4. Importantly, in the context of this case, the National Conference has rule making powers. The provision relevant to the Food and Confectionery Division is rule 4.1A(b) which reads:
"(b) The National Conference may make, alter, amend or rescind rules or adopt new rules affecting the Food and Confectionery Division provided that any decision by the National Conference to make, alter, amend or rescind rules or adopt new rules which directly affects the Food and Confectionery Division shall have no effect unless approved by a majority vote of the Food and Confectionery Division Conference such vote to be taken within 30 days of the National Conference approving the rule alteration."
The Rules also provide for a National Council comprising the National President, the National Secretary, the Assistant National Secretary assigned to each of the five Divisions and various other officers. The National Council is the Committee of Management of the Union. Subject to the powers and decisions of the National Conference, it has "the care, control, superintendence, and management in all respects of the affairs, business, funds and property of the Union": see rules 5 and 6.
Rule 7 provides for half yearly meetings of National Council unless otherwise decided. It also permits meetings to be convened as necessary at the instance of the National President and National Secretary or any four members of the National Council. Additionally, the rule provides for decisions of National Council by postal ballot or telephone hook-up.
Rule 7.2 provides for the creation and operations of a National Administrative Committee which must meet at least once every four weeks.
Members of the Food and Confectionery Division are divided into four Regions: Victoria, New South Wales (including the Australian Capital Territory), Tasmania and South Australia. The Regions have their own officer bearers. Mr Frizziero is the President of the Victorian Region. There is a Food and Confectionery Division Conference comprising specified Regional representatives and the Federal Secretary. Rule 47.7 of the Union Rules provides that, subject to the Rules and decisions of the National Conference, National Council and National Administrative Committee, the Food and Confectionery Division Conference shall have the management and control of the affairs of the Division. The Food and Confectionery Division Conference must meet biennially but provision is also made for special meetings and for decisions of the Division Conference by a postal ballot or telephone hook-up at the initiative of the Division's Federal Executive. The Executive comprises six people: the Federal President, the Federal Vice-President and the Federal Secretary (in each case of the Division) and three elected members. When the Food and Confectionery Division Conference is not in session, the Federal Executive has and may exercise all its powers, subject to decisions of National Conference and National Council.
The facts
Ms Bogar was elected Federal Secretary of the Food and Confectionery Division in 1994. She took up office on 2 September 1994. Her predecessor had also held the position of Victorian Regional Secretary of the Division which, I gather, is a full-time paid position. Although Ms Bogar was also a candidate for the position of Victorian Regional Secretary, she was not elected to that position. A question arose as to whether she was entitled to a salary as Federal Secretary of the Division. Ms Bogar made an application to the Industrial Relations Court of Australia for an order requiring the respondents, members of the National Council of the Union, to observe and perform the Rules of the Union by treating the office of Federal Secretary of the Division as a full-time position. She succeeded. Keely J held that, as a matter of construction of the Rules, the office was a full-time position: see Bogar v Campbell (Keely J, 18 August 1995, not reported.). He made the order sought by Ms Bogar, retrospective to the date of her election. An appeal against his Honour's decision was dismissed: see Campbell v Bogar (Ryan, Moore and North JJ, 3 July 1996, not reported.)
Ms Bogar's term will expire at the end of August 1998. On 9 October 1997, the Tasmanian Regional Council resolved as follows:
"Regional Council notes the initiatives being taken by the National Council to reduce costs and develop a strategic plan for the operation of the Union.
Regional Council expresses concern at the delays in implementing Rule changes endorsed by the 1996 National Conference caused by legal action. In particular, the delay in implementing the unanimous intent of National Conference to ensure that the position of Federal Secretary, Food & Confectionery Division/National Assistant Secretary becomes an Honorary position, as in the past, thus saving money on a position which is not required.
Regional Council calls on the Food & Confectionery Division National Executive and National Council to take immediate steps to have a rule change made to the current rules which is designed to carry out the intent of the 1996 National Conference by inserting a rule and schedule that ensures the current Federal Secretary, Food & Confectionery Division/Assistant National Secretary position becomes honorary on and from the declaration of the result of the 1998 election."
On the following day the Victorian Regional Executive passed a resolution in like terms, with the substitution only of the words "Regional Executive" for "Regional Council" wherever appearing.
These resolutions were conveyed to Ms Bogar, as Federal Secretary of the Division, with requests that she place the matter on the agenda of the Federal Executive meeting scheduled for 20 October 1997. On that day the Federal Executive passed a resolution in identical terms to that of the Tasmanian resolution, with the substitution of "Federal Executive" for "Regional Council" wherever appearing and a reference in the last sentence only to calling on National Council to take immediate steps to have the rule change made.
It appears from the minutes of this meeting that the participants originally comprised five of the six members of the Federal Executive, including Mr Frizziero and Ms Bogar. However, it seems that, at some stage, Ms Bogar left the meeting and the resolution mentioned above was passed in her absence by the remaining four participants.
Mr Frizziero notified Doug Cameron, the National Secretary of the Union, of two resolutions passed on 20 October, including that described above. Ms Bogar later formally conveyed that resolution to Mr Cameron. It was considered by National Council at its meeting of 9 to 11 December 1997. National Council resolved to authorise the National Secretary "to take appropriate action" consistent with the resolutions. Mr Cameron responded to this authority by arranging a postal ballot of National Conference delegates. On 11 December he forwarded a letter to each delegate enclosing a copy of the Federal Executive resolution and a ballot paper in which the delegate was asked to signify endorsement or non-endorsement to a rule change. The proposed change was the substitution of a new para (n) in rule 47.12 reading as follows:
"(n) The offices of Federal Secretary - Food and Confectionery Division and Assistant National Secretary of the Union under paragraph (a) of this sub-rule shall be held on an honorary basis only provided that notwithstanding anything provided elsewhere in these rules the person holding those honorary offices may also occupy at the same time either of the full-time offices of Regional Secretary or Regional President of the Division."
Although the ballot had not yet closed, by 16 January 1998 it was apparent the proposed rule change was endorsed by a majority of National Conference delegates. On that day Mr Cameron wrote to Ms Bogar advising her that 70 delegates had endorsed the change with only 16 against. He drew attention to rule 4.1A(b), with its reference to approval by a majority vote of the Food and Confectionery Division Conference, to be taken within 30 days of the National Conference decision. He ended his letter in this way:
"Would you now take the necessary steps to implement the above Rule as a matter of urgency.
I note that if the Rule change is adopted by your Divisional Conference and approved by the Industrial Registrar, the Rule shall take effect from the expiry of your term of office."
Ms Bogar took no action in response to this letter. In her evidence before me, she said she "was waiting for the move to happen from the very people who were so keen to see the position made honorary". Ms Bogar conceded she knew it was her duty to take steps to have the Divisional Conference delegates express their view on the rule change. But she added it was "the same as the Federal President's duty, together, it wasn't my duty alone". She said she took no steps to contact the Federal President to have a vote taken. The evidence continued:
"Well, you took no steps because you did not want the rule adopted?---That might have been the case, yes.
It was the case, was it not?---I'm not quite sure. If the President had asked me and conducted himself under the rules, I would have had no choice but to do it."
The Federal President, Mr Frizziero, did make a request of Ms Bogar. On 6 February he wrote her a letter in these terms:
"I require without delay confirmation that you have issued ballot papers to Food and Confectionery Federal Conference members regarding ratification of the recent rule changes.
This is of extreme urgency and I am concerned at the apparent delay in your conducting the required ballot.
I request a response from you by 5.00 pm today advising me of your actions in this matter.
Should I not receive a response I advise that I will convene a telephone Hook-Up of Federal Executive."
Ms Bogar responded with a letter dated the same day the full text of which was as follows:
"I acknowledge receipt of your letter dated 6th February, 1998.
Please be advised that all steps will be taken in accordance with the rules of the union regarding the above."
Still no action was taken in relation to a ballot of Division Conference delegates. On 13 February Mr Frizziero wrote again to Ms Bogar. In this letter he set out the history of the proposed rule change. In referring to Mr Cameron's letter of 16 January, Mr Frizziero emphasised Mr Cameron's use of the word "urgency". He went on:
"I wrote to you on 6 February 1998 seeking confirmation that you have issued Ballot Papers to the Food and Confectionery Federal Conference regarding this matter your reply on the same day was `that all steps will be taken in accordance with the Rules of the Union' I am not sure what Rules you are referring to?! Nowhere in the Rules does it say that a Federal Secretary can delay taking the appropriate action on properly constituted issue.
Indeed the Rules say `such vote to be taken within 30 days of National Conference approving the Rule alteration ['].
This provision in the Rules is to ensure that action is taken promptly and without delay.
You are a participant on the various bodies that so far have endorsed the Rule change, you have no excuses for not been [sic] consulted with or that you have been denied the right of raising objections.
You are currently a fully paid official so why don't you perform the small amount of work when it is given to you?" (Original emphasis)
Ms Bogar did not respond to this letter. Neither did she take any action to implement a ballot of Division Conference delegates. Asked by Mr Haylen why she did not tell Mr Frizziero what rules she was referring to, Ms Bogar replied "I didn't respond to that". The evidence went on:
"We know that. Why did you not? It was clear from that letter, he did not know what rules you were referring to. Why did you not tell him?---I didn't think I had to tell him. I thought he was well equipped with it.
You were content to allow him to wallow in ignorance so long as you avoided having this rule being adopted?---I don't think that is the case.
Well, why did you not, as the paid Secretary, tell him what rules that you were relying on or he should be relying on?---Because I didn't, it was one of those things. I didn't do it."
A regular four-monthly meeting of the Federal Executive of the Division had been scheduled to take place in Melbourne on 20 February 1998. In anticipation of the meeting, the remaining five members of the Federal Executive sent a memorandum to Ms Bogar on 18 February in which they inquired what steps she had taken "to implement a Ballot of Food and Confectionery Division Federal Conference Delegates in relation to the decision of the Federal Executive to revert the full time position of the Federal Secretary of the Food and Confectionery Division to an honorary position". They also asked when she expected to circulate ballot papers. The memorandum concluded:
"This information is expected by close of business tomorrow 19th February 1998.
Your failure to provide the information can only be taken as your refusal to comply with the rules. This being the case the relevant action will be taken to ensure Food and Confectionery Federal Conference Delegates receive the opportunity to have a say in this matter."
On 19 February, without reference to Mr Frizziero as Federal President, Ms Bogar cancelled the meeting scheduled for 20 February. Her stated reason was the unavailability of the two New South Wales members of the Executive, Jenny Dowell and John Oborn. Rule 47.9(c) provides that, in a case of inability to attend a Federal Executive meeting, the relevant Regional Council may nominate a substitute. Ms Bogar made no attempt to obtain the nomination of substitutes for Ms Dowell or Mr Oborn.
After the cancellation of the meeting, Mr Frizziero sought advice from Taylor and Scott, solicitors. On 24 February the solicitors wrote a letter to Ms Bogar that concluded in this way:
"We are instructed to request that, by no later than 12.00 noon Thursday, 26 February, 1998, you advise us that you will convene a meeting of the Federal Executive of your Division as soon as practicable thereafter. At that meeting of Federal Executive our client proposes to move a motion to the effect that the attitude of the Division Federal Conference to the rules change proposed by National Conference of the Union be determined by means of a postal ballot of Federal Conference delegates to be organised forthwith.
We advise that failure by you to convene a meeting of the Federal Executive of the Division within the stipulated time will result in our client taking action in the Federal Court of Australia to enforce the rules of the Union."
Ms Bogar immediately responded but her reply was uninformative. It read:
"I acknowledge receipt of your letter dated 24th February, 1998 and advise that a response will be forwarded to you accordingly.
In the meantime, could you please advise by 12.00 noon Thursday, 26th February, 1998 which body of the union has authorised Carlo Frizziero to engage your services."
The solicitors tried again. On the following day they sent a letter that acknowledged receipt of Ms Bogar's letter and proceeded:
"We find your response curious in view of the simplicity of the question we asked on behalf of our client. May we know at your earliest convenience whether or not you will call a meeting of Federal Executive of your Division.
Our client requires details of when the meeting will be called for by you by no later than 12.00 noon tomorrow."
Ms Bogar responded to this letter through solicitors, Howie and Maher. They repeated the reason for cancelling the meeting, stated the matter had a complicated history and sought time to take proper instructions. They foreshadowed a substantive reply by 13 March.
Notwithstanding this letter, Mr Frizziero wrote again to Ms Bogar. On 27 February he sent her a memorandum referring to the correspondence from Mr Cameron and saying:
"I concur with the National Secretary's view that a special meeting or a meeting of the Federal Executive be convened as soon as possible.
I would formally request, consistent with Rule 47-(9)(f), that a special meeting of the Federal Executive be held within 14 days of your receipt of this request.
Please advise me as a matter of urgency of what steps you intend to take to comply with my request under Rule 47-(9)(f).
I await your response."
Ms Bogar did not respond. In evidence she said she did not receive the memorandum.
A meeting of the National Council of the Union was held in Sydney on 3 to 5 March 1998. Ms Bogar was a member of National Council and attended the first day of the meeting. During the course of the day, National Council considered the position that had arisen in relation to the ballot. It carried a resolution that noted certain matters and concluded:
"Council calls on Sister Bogar to convene a special meeting of the Federal Executive of the Food & Confectionery Division on Thursday, 5 March 1998 at 4:00pm consistent with Rule 47(9)(h)A.
Council calls on Sister Bogar to advise Council by 12 Noon, Wednesday, 4 March 1998 of the steps being taken to conduct a ballot of the Food & Confectioner Conference.
Failure to advise Council as above will force Council to support the legal action being taken by Federal President, Brother Frizziero."
It is not clear whether Ms Bogar was present when this resolution was carried but she said she "was aware" of the resolution on 3 March. Notwithstanding that, she took no steps to convene a Federal Executive meeting for 5 March. However, she did reschedule the cancelled regular meeting (of 20 February) for 19 March in Melbourne.
On 4 March Ms Bogar returned to Melbourne. That afternoon Mr Cameron tried to contact her. He had a conversation with Ms Bogar's secretary, Aurora. Aurora gave a response which Mr Cameron asked her to confirm in writing. She subsequently sent a fax that read:
"Advised Freda that you wanted to speak to her. She advised me to pass on the message that if you want to discuss any matters it should be in writing or via her lawyer."
On 5 March Ms Bogar forwarded to Mr Cameron a memorandum stating that "due to ill health and on Doctor's advice I will be absent from work for a short period of time". She tendered her apologies to National Council.
On 5 March Mr Frizziero took steps to arrange a meeting of the Federal Executive of the Division. He contacted Noel Trehearne, the Tasmanian Regional Secretary. Mr Trehearne was a member of Federal Executive and had previously acted in place of Ms Bogar when she was absent from duty. Mr Frizziero gave evidence that he contacted Mr Trehearne about midday on 5 March and asked him to arrange a telephone meeting for the morning of 6 March. The telephone meeting took place on 6 March. Five of the six members of the Federal Executive participated, the absentee being Ms Bogar. She says she received no notice of the meeting. This may be true, but it is not inconsistent with Mr Trehearne having attempted to notify her.
When the meeting commenced, Mr Trehearne was appointed "acting Federal Secretary for the purpose of this meeting and to cover all other absences of the Federal Secretary until otherwise determined by the Federal Executive". Mr Frizziero reported on the situation that had developed. The meeting resolved that Mr Trehearne "arrange for the immediate conduct of a postal ballot of the delegates to Division Conference, with the completed ballot slips of the delegates returned with (sic) 7 days, i.e. by 5.00pm Monday, 16th March 1998". The resolution specified the form of the notice to delegates. It included an explanation that the rule changes "will have the effect of reverting the office of Federal Secretary of the Division to an honorary office from the commencement of the term of office of the person selected in the election currently under way".
By 10 March seven (out of the ten) delegates to Division Conference had returned ballot slips to Mr Trehearne indicating endorsement of the proposed rule change . As this constituted a majority of delegates, Mr Trehearne immediately wrote to Mr Cameron asking him to "take all the necessary steps to ensure that the Rules are changed in accordance with the decisions of the Union".
The contentions of counsel
In their submissions both Mr Haylen and Mr D Staindl of counsel, who appeared at the hearing for Ms Bogar, referred to decisions in which the courts have stressed the importance of organisations complying punctiliously with rule requirements in amending their Rules. Some of those decisions discuss the situation in terms of the mandatory/directory dichotomy developed by administrative law. It is not necessary to consider whether that is a useful dichotomy for present purposes. If, as contended, compliance with the relevant rules was mandatory, in relation to the amendment of rule 47.12, that only means non-compliance would result in the amendment being invalid. But Mr Haylen concedes the amendment is affected by invalidity. That is why he seeks validating orders pursuant to s 258 of the Act. It is pointless spending time discussing the juristic nature of the relevant rules; the question is whether the Court should exercise its discretion to make orders under s 258. That section relevantly reads:
"(1) An organisation, a member of an organisation or any other person having a sufficient interest in relation to an organisation may apply to the Court for a determination of the question whether an invalidity has occurred in:
(a) the management or administration of the organisation or a branch of the organisation;
(b) an election or appointment in the organisation or a branch of the organisation; or
(c) the making or alteration of the rules of the organisation or a branch of the organisation.
(2) On an application under subsection (1), the Court may make such declaration as it considers proper.
(3) Where, in a proceeding under subsection (1), the Court finds that an invalidity of the kind referred to in that subsection has occurred, the Court may make such order as it considers appropriate:
(a) to rectify the invalidity or cause it to be rectified;
(b) to negative, modify or cause to be modified the consequences in law of the invalidity; or
(c) to validate any act, matter or thing rendered invalid by or because of the invalidity.
(4) Where an order is made under subsection (3), the Court may give such ancillary or consequential directions as it considers appropriate.
(5) The Court shall not make an order under subsection (3) without satisfying itself that such an order would not do substantial injustice to:
(a) the organisation;
(b) any member or creditor of the organisation; or
(c) any person having dealings with the organisation.
(6) ...
(7) ..."
Mr Haylen identifies four possible invalidities:
(a) The decision of the National Conference to substitute a new para (n) in rule 47.12 was not approved within 30 days by a majority vote of the Food and Confectionery Division Conference. There is no doubt this invalidity occurred.
(b) Rule 47.9(f) provides for the Federal Secretary of the Division to call a special meeting of the Federal Executive at the request of the Federal President or on receipt of a request from two or more Regions. The meeting of 6 March was called by Mr Trehearne at Mr Frizziero's request. Mr Trehearne was not the Federal Secretary, although he had acted as such in the past. There is a question about Mr Trehearne's capacity to call the meeting.
(c) Rule 47.9(g) requires that each member of the Federal Executive receive at least three clear days notice in writing of a meeting of the Federal Executive and of the business to be dealt with at that meeting. The telephone meeting of 6 March was convened on the preceding afternoon. Apparently there was no written notice of the meeting or the business to be transacted.
(d) Rule 47.8(i) requires that each member of the Food and Confectionery Division Conference receive a notice in writing at least 14 days before the date of a special meeting with advice as to the business to be dealt with at the meeting. This did not occur in relation to the postal ballot. However, rule 47.8(j)B permits the Federal Executive, "where the matter is urgent", to direct a postal ballot or telephone hook-up "and dispense with or shorten the period of notice required by paragraph 47.8(i)". On 6 March the Federal Executive resolved on an immediate postal ballot with completed ballot slips to be returned by 16 March. Although Mr Staindl submits there had to be a specific resolution of Federal Executive on the subject, I think it must be inferred the Federal Executive regarded the matter as urgent and decided to dispense with the notice required by para 47.8(i). Where a collective body has power to take a particular course only if it is of a particular opinion, it is to be presumed from a decision to take that course, in default of reason to conclude to the contrary, that the body held that opinion: see Western Stores Ltd v Orange City Council [1971] 2 NSWLR 36 at 46-47 and the cases there cited. I would not regard the Federal Executive's failure expressly to dispense with notice as an item of invalidity separate from items (b) and (c) above. If the apparent invalidities in the convening of the meeting are validated, that validation will cover this item.
In addition to these invalidities, Mr Staindl refers to the lack of satisfactory evidence about Ms Bogar being given notice of the Federal Executive meeting of 6 March. Ms Bogar gave evidence that she received no notice of the meeting. Mr Frizziero was only able to say he had "a vague recollection that Mr Trehearne informed me or informed the meeting that contact or communication was made with Freda Bogar's office in respect to that meeting". Mr Trehearne did not give evidence. Mr Staindl cites Joske's Law and Procedure at Meetings (7th ed, 20) for the proposition that "(f)ailure to give notice of a meeting to a person entitled to be present at it will, unless that person happens to be present, invalidate the meeting and any resolutions passed at it". I accept this is so and the lack of proof that notice was in fact given leads to a further invalidity in connection with this meeting.
Mr Haylen argues all the invalidities originated in Ms Bogar's refusal to take any steps to have the Division Conference delegates consider the rule change adopted by National Conference. Ms Bogar failed to obtain support for maintaining the Federal Secretaryship as a full-time position; two Regions within the Division sought the rule change, it was overwhelmingly adopted by National Council (70 votes to 16) and by the seven (out of ten) delegates to Division Conference who returned their ballot papers by 10 March 1998. Mr Haylen suggests that "at every level in the rule altering process Ms Bogar's position was resoundingly rejected"; so Ms Bogar used her position to frustrate adoption of the alteration.
Mr Haylen concedes the rule change will affect Ms Bogar personally, if she is successful in the 1998 election. However, he says:
"(t)he rule change is beyond mere personalities: Ms Bogar may not win the 1998 election and there were other full time positions for which she could have nominated. She did so [in] 1994 when she nominated for the full time position of Victorian Regional Secretary as well as the position of Federal Secretary of the Division. There was nothing stopping her from doing the same thing in this election."
Moving to a suggestion of mala fides made by Mr Staindl, Mr Haylen argues any such suggestion necessarily involves an attack on the members of all the bodies within the Union that voted in favour of the rule change, including (within the Division) the Tasmanian Regional Council, Victorian Regional Executive and Federal Executive and (within the wider Union) National Council and National Conference. Mr Haylen suggests the task of establishing such an allegation is enormous and Ms Bogar has failed to produce any evidence to support it. Moreover, although Mr Staindl vigorously cross-examined Mr Frizziero, he did not suggest to him he was actuated by improper motives or had sought to influence others to act improperly. Mr Haylen says:
"This failure to put the suggestion to the person that Ms Bogar regarded as one of her main opponents, the Federal President of her own Division, is a stunning omission. It is quite clear that there was no acceptable evidence available or cross-examination which could be conducted on this matter and the allegation by Ms Bogar was probably no more than a tactic adopted as part of her election campaign."
Mr Haylen says the evidence discloses there has been debate within the Union since 1994 about the issue of a full-time Federal Secretary for the Food and Confectionery Division. Under cross examination Ms Bogar conceded she had known, ever since her election in 1994, that a number of members of the Federal Executive of the Division believed there is insufficient work to justify a full-time position. The fact that the debate had not dissipated in four years, Mr Haylen says, shows "there was a live and proper debate within the Union as to how this office was to be treated. It also strongly suggests that there was no lack of bona fides on the part of those who participated in that debate and in the decision making process which led to the alteration of the rule". Mr Haylen concedes an important factor for the Court to consider, in determining whether to exercise the power given to it by s 258, is "whether the organisation and its offices have acted honestly": see Re Food Preservers' Union of Australia (1988) 79 ALR 138 at 144 per Northrop and Ryan JJ. But he says that, on a proper approach to the evidence in this case, there can be no suggestion that the Union and its officers have not acted honestly. Mr Haylen goes on:
"Also of relevance is the number and nature of persons who have appeared in the proceedings to oppose the application for validation. In this case despite notifications in the union's journal no other person other than Ms Bogar (who has a personal interest in the matter), has appeared to oppose the application. On the evidence no Regional Council or other meeting of members has passed any resolution opposing the rule alteration or has otherwise supported Ms Bogar's position. The Court is then left in the situation that the union has demonstrated, by large majorities of its peak representative bodies, that the rules should be altered and none of the other representative bodies of the Division have apparently adopted any stance, resolution, or petition, or aired any other view against the rule change.
In such circumstances the Court can comfortably come to the view that the making of an order would not do substantial injustice to any member let alone to the union, a creditor or any person having dealings with the union."
Mr Staindl responds to Mr Haylen's submissions by emphasising the importance of the requirement of rule 4.1A(b) for approval by the Division Conference within 30 days. He says this requirement
"is of great significance: it aims to ensure that the Food and Confectionery Division of the Union retains a degree of autonomy and independence and that for a rule change which affects that Division to be passed, it must be passed within the 30 day period. The Division must therefore act promptly following a National Conference vote if such a vote is to be approved. The National Conference cannot rely upon resolutions passed a long time beforehand which can be reactivated and voted upon by the Division when it is politically expedient".
Mr Staindl argues Mr Cameron's request to Ms Bogar of 16 January to "now take the necessary steps to implement the above Rule" was ineffective to create any obligation; under rule 47.7 the Food and Confectionery Division Conference had management and control of the affairs of that Division. He spells out the problems surrounding the convening of the Federal Executive meeting of 6 March. Dealing with the cause of the invalidities, Mr Staindl says:
"The applicant seeks to blame the respondent for failing to take any steps to have the Federal Conference consider the rule change. This issue was obviously a contentious one and the respondent was entitled to rely on the Rules. If a proper request had been made to the applicant to call a meeting of the Federal Executive or Federal Conference and she had failed to do so then the application would have more substance. The respondent is entitled to expect that the rules will be observed by others while she is obliged to follow the rules herself. There was no power for the respondent to call a meeting of Federal Executive `off her own bat'. She could only do so pursuant to a request by the Federal President or 2 or more regions or act in conjunction with the Federal President. To say that this was `disingenuous' ignores the Rules. The applicant seeks to be rewarded for his failure to act in accordance with the Rules and to penalise the respondent for acting according to the Rules."
Mr Staindl submits Ms Bogar would suffer substantial injustice if validity orders were made:
"The evidence of the respondent reveals that she is a candidate in the current election and that she is the incumbent in the position of Federal Secretary of the Food and Confectionery Division. She also says that the other candidate is ineligible and an election inquiry has been instituted in the Federal Court in respect to the other candidate's eligibility. Thus, it is apparent that the respondent has a real interest in the position. Accordingly, the Court cannot be satisfied that making an order would not do substantial injustice to the respondent because she would then be required (if successful in the current election) to carry out on an honorary basis the duties which she has formerly carried out on a full-time basis."
Conclusions
The first task for the Court, when confronted with an application under s 258(1) of the Workplace Relations Act 1995 , is to determine whether an invalidity has occurred in respect of any of the matters described in the subsection. In the present case it is apparent that invalidities have occurred in "the alteration of the rules of the organisation" (para (c)); and possibly also in "the management or administration of the organisation" (para (a)). It will be appropriate to make declarations to that effect: see subs (2).
The next question is whether it is appropriate to make any of the orders described in subs (3):
"(a) to rectify the invalidity or cause it to be rectified;
(b) to negative, modify or cause to be modified the consequences in law of the invalidity; or
(c) to validate any act, matter or thing rendered invalid by or because of the invalidity."
In the present case, the applicant seeks an order under para (c) validating the rule change. That order may be made only if I am first satisfied that the order would not do substantial injustice to the Union, any member or creditor of the Union or any person having dealings with the Union. There is no suggestion of prejudice to any creditor of the Union or to any person having dealings with it. Nor has it been argued that validation would prejudice the Union itself. The only suggested injustice is to Ms Bogar; validation would result in her position becoming an honorary position. It is true the change will not take effect until the expiration of her current term of office and she may not be re-elected. But she is a candidate for re-election and it is appropriate to consider the matter of substantial injustice on the supposition she may be adversely affected by the rule change as from 1 September 1998.
On that supposition, there is no doubt the rule change operates to the serious disadvantage of Ms Bogar. It has the effect that she is no longer entitled to payment of a full-time salary for her work as Federal Secretary of the Division. She may, perhaps, receive some reward for her work but any payment is bound to be substantially less than the remuneration she now enjoys. Although there is no evidence before the Court as to Ms Bogar's means, it is reasonable to assume she would need to seek other employment; and this may force her to resign her position as Federal Secretary. Under these circumstances, I can understand Ms Bogar feeling, as she obviously does, that the rule amendment does her a substantial injustice. However, despite Mr Staindl's contrary submission, this is not the issue the Court has to address. The issue for the Court is whether the order would do substantial injustice to Ms Bogar; in other words, whether it would be a substantial injustice to Ms Bogar to validate what has been done invalidly. It is not to the point that Ms Bogar would have been better off if nobody had ever proposed the rule-change. The Court it is not concerned with the substantive merits of the rule alteration; the issue for the Court is whether it should make good the defects in process. In considering that question, the Court is primarily concerned with the nature of those defects and the way they occurred.
In considering how the invalidities occurred, I think it is fair to say, with Mr Haylen, that, "having failed to obtain any substantial support for her position, Ms Bogar quite deliberately set about frustrating the intentions of the overwhelming majority of members of the Union". There is no other explanation for her failure to comply with Mr Cameron's request on 16 January to "take the necessary steps to implement (Rule 4.1A(b)) as a matter of urgency".
No doubt it is correct to say Mr Cameron had no power to direct what action should be taken by the Division. Possibly he had no power to give any direction at all. But the request he made was no more than was Ms Bogar's responsibility: to take whatever steps were necessary (subject to the view of Federal Executive) to provide an opportunity for Division Conference delegates to approve the National Conference decision, if they saw fit.
It is true, as Mr Staindl points out, that Ms Bogar did not have the power, acting alone, to convene a special meeting of the Federal Executive of the Division, at which it could be determined whether to hold a postal ballot of delegates to the Division Conference. Ms Bogar was empowered to call a special meeting of the Federal Executive only at the request of the Federal President or of two or more Regions. But Ms Bogar had no reason to doubt Mr Frizziero would request a meeting if she advised him this was the appropriate course to take; and after she received his letter of 6 February, this must have been abundantly clear. If Ms Bogar had responded to Mr Frizziero's letter of that day by pointing out it was necessary to have a Federal Executive meeting, and this would require a formal request by him, I have no doubt he would have made the request. If Ms Bogar had advised that the Federal Executive should meet urgently, so as to ensure ballot papers could be returned by 15 February, I have no doubt Mr Frizziero would have been prepared to join with her in a direction under rule 47.9(h)B that the Federal Executive deal with the matter by a telephone hook-up and dispense with the three clear days notice required under rule 47.9(g). And, when Federal Executive met, it could have resolved under rule 47.8(j)B to have the Division Conference deal with the matter by postal ballot or telephone hook-up and, for that purpose, dispense with or shorten the notice required under rule 47.8(i). In short, even by 6 February, it was not too late to procure a decision regarding approval of the rule change within the 30 day period specified in rule 4.1A(b).
No doubt it is true to say, as Ms Bogar did in evidence, that Mr Frizziero might have worked out for himself what to do about organising a Division Conference ballot. He also had access to the Union's Rules. But Ms Bogar was the Federal Secretary of the Division, occupying a full-time paid position in which her prime responsibility was the efficient management of the Division. It was her obligation to tender appropriate advice to her President, who was not employed full-time by the Division, especially when he asked for information. However, Ms Bogar did not tender any advice. Despite Mr Frizziero's announced concern about the delay, she contended herself with writing a meaningless response, "all steps will be taken in accordance with the rules of the union", and then doing nothing at all. So the 30 day period elapsed without a decision of the Division Conference concerning approval of the rule change. This was the first invalidity and it occurred because of the deliberate obstruction of Ms Bogar.
The other invalidities arise out of the method of convening the Federal Executive meeting. They would not have occurred if Ms Bogar had tendered appropriate advice to Mr Frizziero in January or early February; and he had acted on it, as I think probable. These other invalidities arose because of two factors: the desire of those who supported the rule change to resolve the matter promptly and Ms Bogar's failure to respond appropriately to the National Council resolution of 3 March 1998.
The evidence does not spell out the reason why the proponents of the change desired, in March, to proceed so promptly. There may have been a measure of impatience in their attitude, perhaps exacerbated by annoyance with Ms Bogar. They may have been alive to the desirability of resolving the issue before closure of the ballot for the subject office. To the extent these were factors, they arose out of Ms Bogar's inaction in January and early February.
The National Council resolution of 3 March called on Ms Bogar to convene a special meeting of the Federal Executive of the Division two days later, at 4pm on 5 March. With Mr Frizziero's concurrence, this could have been done, in which case the remaining invalidities would not have occurred. But Ms Bogar chose to ignore this directive; preferring instead to call a meeting for a date two weeks later and then depart for Melbourne, from where she refused to speak to Mr Cameron.
The situation then comes down to this: the only person who is said to suffer injustice by a validation order is the person whose omissions were the very cause of the invalidities. As I say, Ms Bogar may be disadvantaged by the substance of the rule change. But it is no injustice to her to validate procedural invalidities that would not have occurred at all, absent her own breaches of duty. On the contrary, a refusal to make a validating order would have the effect of rewarding her intransigence and breach of duty. Moreover, a refusal would derogate from the principle of democratic control of a registered organisation. As Ms Haylen stresses, the proposed rule change has received strong support from each of the bodies within the Union that have given consideration to it. This consideration would not justify a validation order that imposed a substantial injustice on a member. But it is a relevant factor in determining how the Court should exercise its discretion.
In writing the above, I have not overlooked that one of the invalidities surrounding the convening of the Federal Executive meeting of 6 March is the apparent failure of Mr Trehearne to give notice of the meeting to Ms Bogar. The opportunity to be heard on an issue is an important aspect of membership of a deliberative body in a registered organisation. Under most circumstances, I would be loathe to make a validating order that absolves a deprivation of that opportunity. But in the present case it is apparent Ms Bogar had ample opportunity to express her view about the rule alteration to her fellow members of the Federal Executive. She could have stayed for the debate on the item at the meeting of 20 October. She could have responded to the memorandum of 18 February. She could have maintained the scheduled meeting of 20 February. She could have obeyed the National Council instruction to convene a Federal Executive meeting on 5 March. In any event, as Mr Haylen points out, Ms Bogar's view was already well known to her fellow Federal Executive members. Moreover, the step of the Federal Executive meeting of 6 March was the purely procedural purpose of authorising a Division Conference ballot. Federal Executive had already made its substantive decision about the rule-change, on 20 October 1997. Its concern on 6 March was the intent of rule 4.1A(b); that there be a prompt decision of Division Conference whether or not to endorse the alteration adopted by National Conference.
Refusal of a validating order would not rule out the possibility of the Rules being altered in the manner contemplated by the National Conference resolution. But it would mean the rule amendment process would have to start all over again. The issue would remain unresolved at the time of the declaration of the ballot for Federal Secretary, possibly even at the commencement of the new term of office. Such a situation would be undesirable at least; depending on the precise facts, possibly a source of further invalidity.
There is no evidence of mala fides on the part of anyone associated with the proposal to alter rule 47.12. Mr Frizziero, perhaps with others, obviously has a strong view that the alteration is desirable. But there is nothing to suggest this view arises out of any consideration other than what he (and they) think is in the best interests of the Union, and the Division, in particular. Subject to one qualification, the case for a validation order is compelling.
The qualification I have in mind arises out of a submission of Mr Staindl concerning the evidence put before the Court as to the results of the Division Conference ballot. The evidence about both the National Conference and Division Conference ballots comes from copy letters annexed to affidavits. In the case of the National Conference ballot, the relevant letter was that from Mr Cameron to Ms Bogar of 16 January. In that letter Mr Cameron stated:
"The results of the ballot have endorsed a rule change to implement the Federal Executive's decision by the following figures:
Endorse 70
Not endorse 16"
Mr Staindl did not object to the admission of this letter into evidence and does not suggest any lack of probative evidence about the result of the National Conference ballot. I think his attitude was, and is, correct; the letter was clearly a "business record", within s 69(1) of the Evidence Act. Accordingly, the hearsay rule does not exclude receipt into evidence of the previous representation (of Mr Cameron) I have quoted. It is also strongly arguable that the hearsay rule is excluded by s 60, the letter being relevant for a purpose other than proof of the fact intended to be asserted by the representation; namely proof of the history of the rule alteration process. The evidence about the Division Conference ballot is a copy letter from Mr Trehearne to Mr Cameron of 10 March 1998 that is annexed to the affidavit of Lachlan Neil Riches of Taylor and Scott, solicitors. In that letter Mr Trehearne informed Mr Cameron that "seven out of ten Delegates have responded to date with three votes outstanding" and that "there is a clear majority in favour of the Rule changes". When Mr Riches' affidavit was read, Mr Staindl objected "to the majority of it because of its hearsay nature". After discussion with counsel, I upheld Mr Staindl's objection to the extent Mr Ritchie retailed hearsay information he had received, but I admitted the affidavit to the extent it placed documents before the Court. One of these documents was the copy letter from Mr Trehearne to Mr Cameron of 10 March.
In his written submission Mr Staindl argues there is no proper evidence of the conduct of the ballot of Division Conference delegates or the result. "All we know", he says "is that by 10 March 1998 Mr Trehearne purported to declare the result of the ballot".
I think it is strongly arguable Mr Trehearne's letter is in the same category as Mr Cameron's letter of 16 January; that is, it is both a business record and covered by s 60 of the Evidence Act. However, the argument is complicated by the dispute between the parties as to Mr Trehearne's status. If he had no authority to conduct the ballot, it is at least faintly arguable the letter is not, and never was, part of the official records of the organisation.
If this case was merely inter partes litigation between Mr Frizziero and Ms Bogar, I would resolve the question about the admissibility of Mr Trehearne's letter and determine the application accordingly. However, the case concerns the organisation as a whole. The Court is asked to validate something that is incontestably invalid and it has a discretion whether or not to take that course. One of the arguments for doing so is to uphold the principle of democratic control of the organisation, but that principle will only be upheld if it is certain that a majority of the Division Conference did vote to endorse the rule change. Although the material before me suggests this was the case, I think I should insist on certainty before making any validating order. Accordingly, I will not make a validating order unless and until a person with direct knowledge of the Division Conference ballot, presumably Mr Trehearne, makes an affidavit detailing its conduct and result. The affidavit should identify the ballot documents that were sent to delegates, and the persons to whom they were sent, and it should reveal the result of the ballot; both the number of votes cast and the numbers for and against endorsement.
I propose to stand over the matter until Friday, 12 June 1998 at 9.30am. If the applicant proposes to provide an affidavit of the kind I have described, it should be filed and served not later than Tuesday, 9 June. If the respondent seeks to challenge the affidavit, notice of the nature of the challenge should be given to the applicant's solicitors not later than noon on Thursday, 11 June. If there is no challenge to the affidavit, and I find it satisfactory, I am likely to make validation orders on Friday, 12 June. If there is a challenge, I will determine on 12 June what course to take.
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I certify that this and the preceding twenty-two (22) pages are a true copy of the Reasons for Judgment herein of the Honourable
Justice Wilcox |
Associate:
Dated: 29 May 1998
_
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Counsel for the Applicant: | W Haylen QC |
| Solicitor for the Applicant: | Taylor and Scott |
| Counsel for the Respondent: | D Staindl |
| Solicitor for the Respondent: | Howie and Maher |
| Date of Hearing: | 11 May 1998 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/1998/567.html