The Master Builders' Association of New South Wales [2008] NSWIRComm 159 (3 September 2008)

Last Updated: 5 September 2008

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION :
The Master Builders' Association of New South Wales [2008] NSWIRComm 159



FILE NUMBER(S):
IRC 505

HEARING DATE(S):
21 May & 17 June 2008

DATE OF JUDGMENT:
3 September 2008

PARTIES:
APPLICANT:
The Master Builders' Association of New South Wales

CORAM:
Boland J President


CATCHWORDS: Registered organisations - Employer organisation - Building Industry - Application for declaration of invalidity - Invalidity arose in relation to conduct of election, filing of statutory declarations concerning membership register and reporting of financial accounts - Invalidities found - Court satisfied that orders proposed would not do substantial injustice to the members of the organisation or any creditor of the organisation or any person having dealings with the organisation - Declarations made - Orders made.

LEGAL REPRESENTATIVES
APPLICANT:
Mr G Thomas
Senior Industrial Officer
Master Builders' Association of New South Wales



CASES CITED:


LEGISLATION CITED:
Industrial Arbitration Act 1901
Industrial Relations Act 1996 ss 223(1), 239, 239(1)(b), 249, 278, 278(3), 278(4), 278(9), 280, 282(3), 288, 288(1)(a), 288(1)(b), 288(3), 288(4), 288(5)
Industrial Relations Act 1991 ss 421, 442-451, 444, 444(1), 510, 510(1), 513-516, 514, 517(1), 517(5), 518, 520, 521, 641
Workplace Relations Act 1996 (Cth)


TEXTS CITED:




JUDGMENT:

INDUSTRIAL COURT OF NEW SOUTH WALES

CORAM: BOLAND J, President

Wednesday 3 September 2008

Matter No. IRC 505 of 2008

THE MASTER BUILDERS' ASSOCIATION OF NEW SOUTH WALES

Application by The Master Builders' Association of New South Wales for a determination of the question of an invalidity under s 288 of the Industrial Relations Act 1996

JUDGMENT
[2008] NSWIRComm 159

1 This matter had its genesis in Matter No IRC 276 of 2008, being a report by the Industrial Registrar to the Industrial Court of New South Wales of a failure by the Master Builders' Association of New South Wales ('the applicant'), an organisation of employers registered under the Industrial Relations Act 1996 ('the 1996 Act'), to comply with its registered Rules and various statutory obligations associated with the election of officers, the reporting of financial accounts, and the like.

2 In particular, the report by the Registrar, filed on 29 February 2008, identified four substantive failures by the applicant organisation. The first two of these related to the election of office holders:

10. Section 249 of the 1996 Act provides that regulations may make provision for or with respect to the election of officers of State organisations.

11. Pursuant to clause 31 of the Industrial Relations (General) Regulation 2001 the provisions of sections 442-451 of the 1991 Act (and the regulations under those provisions) apply to a State organisation as regulations made under section 249 of the 1996 Act.

12. Rule 14 of the organisation's rules constitutes a Council of Management of the organisation, with officers to be elected annually.

13. Preserved section 444(1) of the 1991 Act provides that, when an election is required to be held, an organisation must apply in writing to the Industrial Registrar requesting that the Industrial Registrar arrange for the conduct of an election for an office in the organisation in accordance with the rules of the organisation.

14. There is no record of any application to the Industrial Registrar for an election of officers since an unsuccessful application for approval of special arrangements for the appointment of a returning officer other than the State Electoral Commissioner Office in 1995.

15. The organisation's sub-rule 14.24 provides, subject to certain criteria, that persons elected to office in a related organisation registered under Federal industrial legislation may be taken to be elected to corresponding offices in the State organisation. The Master Builders' Association of New South Wales has never lodged with the Industrial Registrar the documents required for sub-rule 14.24 to operate.

3 The other two substantive failures related to the lodgement of financial accounts and the lodgement of returns under s 278 of the 1996 Act:

16. Subsection 282(3) of the 1996 Act provides that, until other regulations are made, the provisions of the 1991 Act and the Industrial Relations Regulation 1992 ('the 1992 Regulation') relating to financial accountability continue to apply to State organisations. No other relevant regulations have been made.

17. Relevantly, those provisions provide that State-registered organisations must:

(a) prepare certain accounts and certificates as soon as practicable after the end of the financial year of the organisation (section 510 of the 1991 Act and clauses 58 - 59 of the 1992 Regulation);

(b) appoint an auditor to prepare a report on the accounting records of the organisation within six months of the preceding financial year (ss 513 - 516 of the 1991 Act);

(c) provide free of charge to members of the organisation a copy of the relevant accounts, certificates and auditor's report within 56 days of the making of that report (s 517(1) of the 1991 Act and cl 62 of the 1992 Regulation);

(d) between 8 and 28 days after they have been distributed to members, present the relevant accounts, certificates and auditor's report to a general meeting of members of the organisation or a meeting of the committee of management (s 517(5) of the 1991 Act and cl 63 of the 1992 Regulation);

(e) lodge copies of the accounts and financial statements with the Industrial Registrar, under cover of a certificate by the Secretary of the organisation, within 14 days of their presentation to such a meeting (s 518 of the 1991 Act and cl 64 - 65 of the 1992 Regulation).

18. Preserved subsection 10 of section 518 of the 1991 Act provides that an organisation must not fail to comply with the section.

19. Section 521 of the 1991 Act (preserved by s 282(3) of the 1996 Act) requires that the Industrial Registrar inform the Industrial Court if an organisation fails to comply with sections 517 or 518.

20. The financial accounts lodged with the Industrial Registrar in relation to the financial years ended 30 June 1992 through to 30 June 1996 appear to be those of 'Master Builders Association of New South Wales', an organisation registered under the Federal industrial legislation.

21. No financial accounts were lodged with the Industrial Registrar in relation to the financial years ended 30 June 1997 or 1998.

22. The financial accounts lodged with the Industrial Registrar on behalf of the organisation in relation to the financial years ended 30 June 1999 and 30 June 2000 are those of 'Master Builders Association of New South Wales Pty Limited (A.C.N. 074397 532)'

23. No financial accounts have been lodged with the Industrial Registrar in relation to the financial years ended since 30 June 2000.

24. Section 278 of the 1996 Act requires that each State organisation must lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders. Section 278(9) provides that if default is made in complying with the section by an organisation, it is guilty of an offence.

25. I have caused the records of the Industrial Registry to be searched and no record has been found of any return by the organisation under section 278 of the 1996 Act for the year 2007.

4 Upon the first return of Matter No IRC 276 of 2008 on 16 April 2008, the applicant announced it had filed an application pursuant to s 288 of the 1996 Act. The applicant filed an amended application on 20 May 2008. It is that application which is the subject of these proceedings, Matter No IRC 276 of 2008 having been stood over.

5 The amended application sought the following orders pursuant to s 288 of the 1996 Act:

(a) That an invalidity occurred in 2007 when the applicant State organisation failed to apply to the Industrial Registrar to conduct ballots, or to obtain the approval of the Industrial Registrar for a declaration that persons be declared elected to offices.

(b) Consequential orders to negate, modify or cause to be modified the consequences in law of the invalidities found to have occurred by way of determination under Section 288 of the Act.

(c) Orders to validate all acts, matters or things rendered invalid by or because of the invalidities found to exist pursuant to Section 288 of the Act.

6 The amended application was supported by the affidavit of Mr Brian Seidler, filed on 20 May 2008 and was the subject of a brief hearing on 21 May 2008. Upon a review of the papers filed, I arranged for my Associate to write to the applicant by way of letter dated 13 June 2008 seeking clarification of certain matters. A further affidavit of Mr Seidler was filed on 17 June 2008 and the matter was the subject of a further brief hearing on that day. I am satisfied that I am now in a position to deal with the matter.

7 The invalidities referred to in the amended application fell into three categories:

(a) Failure in 2007 to apply to the Industrial Registrar to arrange for the conduct of ballots to fill offices in the State organisation. This includes failure to lodge duly audited financial accounts and the failure to lodge related certificates and an auditors report.

(b) Failure in 2007 to obtain the Industrial Registrar’s approval under Rule 14.24.1 of the State organisation’s rules permitting persons elected to office in a related organisation to be validly elected to corresponding offices in the State organisation.

(c) Consequent failures in the management and administration of the State organisation involving the making of decisions and the taking of actions by persons not validly elected to offices of the State organisation as well as the calling and conduct of Council of Management and Executive Committee meetings.

Grounds

8 The grounds and reasons upon which the applicant relied in its amended application were as follows:

1. The rules of the State organisation were certified 22 December 1995 in accordance with the Industrial Relations Act 1991.

2. This application deals with the operations of the State organisation during the financial year ending 30 June 2007, and subsequently following the Annual Meeting of the corporate and Federally registered entity held on 11 December 2007. Matters related to financial years ending on 30 June 2006, 30 June 2005, and 30 June 2004 will be the subject of separate applications to the Court.

3. Attached to this application is a statutory declaration by the Executive Director stating as required by Rule 24.14.1 that the membership of The Master Builders Association of New South Wales registered under provisions of the Workplace Relations Act 1996 is identical to the membership of the State Organisation. Also attached are documents relating to the conduct of a ballot by the Australian Electoral Commission for offices of the Federally registered organisation.

4. Attached to this application is the Annual Report for the financial year ended 30 June 2007 of ABN 96 550 024 906, and controlled entities. The controlling entity is The Master Builders Association of New South Wales. Documents accompanying the Annual Report indicate the entity’s compliance with preserved provisions of the Industrial Relations Act 1991 and Industrial Relations Regulations 1992.

5. The attached affidavit of the Executive Director deals with the operations of the entity established under the corporate law and the relationship between the State organisation and the organisation registered under the Workplace Relations Act 1996. It also deals with associated matters of fact.

6. The organisation and its members have acted in good faith:-

(i) The invalidities did not arise as a result of a knowing and deliberate acts on the part of the officers of the State organisation;
(ii) The invalidities arose due to inadvertence; and,
(iii) The officers of the State organisation, upon appreciating the omissions, took the steps available to them to rectify the deficiencies in the affairs of the State organisation.

7. The orders sought will do no substantial injustice to the State organisation, or any member or creditor of the State organisation or any person having dealings with the State organisation.

(i) The audited accounts for The Master Builders Association of New South Wales are those accounts for ABN 96 550 024 906; these are attached to this application.

(ii) The membership roll, offices, and accounts of the State organisation are common to those of the entity registered under the Workplace Relations Act 1996.

(iii) Over the period of the invalidities in the management and administration of the State organisation covered by this application, the entity registered under the Workplace Relations Act 1996 operated in accordance with the requirements of the Workplace Relations Act 1996, and in accordance with the requirements of the Corporations law.

Evidence filed

9 Mr G Thomas, who appeared for the applicant, relied upon affidavits of Mr Brian Seidler filed on the 16 April 2008, 20 May 2008 and 17 June 2008. Mr Seidler was employed as the Executive Director of the applicant organisation and had held that position since January 2000.

10 In relation to Rule 14.24.1 of the applicant's Rules, Mr Seidler stated in paragraph 3 of his affidavit of 20 May that:

(a) The membership of the Master Builders Association of New South Wales registered under the Workplace Relations Act 1996 is identical to the membership of The Master Builders Association of New South Wales registered under the Industrial Relations Act 1996.

(b) Offices of President, Deputy President and four Vice Presidents forming the Executive Committee created under Rule 18 of The Master Builders Association of New South Wales registered under the Workplace Relations Act 1996 are identical to those offices of President, Deputy President and four Vice Presidents forming the Executive Committee created under Rule 18 of The Master Builders Association of New South Wales registered under the Industrial Relations Act 1996.

(c) In other respects the rules of The Master Builders Association of New South Wales registered under the Industrial Relations Act 1996 relating to the election of members of the Council of Management and the Executive Committee under Rule 14 and Rule 18 respectively comply substantially with those relating to the election of members of the Council of Management and the Executive Committee under Rules 14 and 18 respectively under the rules of the Master Builders Association of New South Wales registered under the Workplace Relations Act 1996.

(d) ....

(e) The 2007 election of office bearers of The Master Builders Association of New South Wales registered under the Workplace Relations Act 1996 was conducted by the Australian Electoral Commission on 11 December 2007 as Attachment 2.

(f) No separate ballot has been conducted to fill offices of the State organisation.

11 In paragraph 4 of Mr Seidler's 20 May affidavit, he stated:

Regarding the lodgement of an outstanding return of the State organisation for 2007, and regarding the validation of certain invalidities in the management and administration of the organisation and of certain decisions.

(a) Attached to the application under section 288 of the Act is the 2007 Annual Report for the Master Builders Association of New South Wales. This Report covers the economic entity and the controlling entity. The controlling entity is The Master Builders Association of New South Wales (ABN 96 550 024 906), an organisation registered under the Workplace Relations Act 1996.

(b) The 2007 Annual Report attached was presented to the annual general meeting of the controlling entity, The Master Builders Association of New South Wales, held on 11 December 2007.

(c) The reporting entity concerned for purposes of the Corporations law and other federal laws was The Master Builders Association of New South Wales (ABN 96 550 024 906). There is no separate entity for purposes of the Corporations law covering the State organisation registered under the Industrial Relations Act 1996.

(d) Also attached to the application are declarations made by the Committee of Management, Directors and Independent Auditors relating to both the full financial report and to a Concise Financial Report covering operations of the Economic Entity only. The Concise Financial Report and the other documents were been forwarded to members as an attachment to the October / November 2007 edition of Association’s journal “Executive Newsbrief” in accordance with requirements of the Workplace Relations Act 1996.

(e) This process meets the requirements of Chapter 8, Part 3 Division 5 of Schedule 1 Registration and Accountability of Organisations.

(f) Also attached to the application under Section 288 of the Industrial Relations Act 1996 are: -

(i) A certificate issued by me as required by Section 518 of the Industrial Relations Act 1991;

(ii) A statement issued by me as required by Section 280 of the Industrial Relations Act 1996;

(iii) A certificate issued by the Committee of Management as required by Section 510(1) of the Industrial Relations Act 1991 and Regulation 59(1)(b) of the Industrial Relations Regulations 1992;

(iv) An Auditors Report as required by Section 514 of the Industrial Relations Act 1991 and Section 282(3) of the Industrial Relations Act 1996; and,

(v) A certificate issued by the Accounting Officer of the controlling entity as required by Section 510(1) of the Industrial Relations Act 1991 and Regulation 59(1)(a) of the Industrial Relations Regulations 1992.

12 In paragraph 5 of the 20 May affidavit Mr Seidler addressed what he described as the "governance of the entity for purposes of the Corporations law and the entity registered under the Workplace Relations Act 1996". In that respect, he stated:

(a) Both entities are operating in accordance with the requirements of the Corporations law and of the Workplace Relations Act. 1996.

(b) Following from this I believe that, but for the subject matter of the application now before the Court under Section 288, the State organisation is operating in accordance with the Corporations law and of the Industrial Relations Act 1996.

(c) Based on this, the making of an order under Section 288 will not do substantial injustice to the State organisation, any member or creditor of the State organisation; or any person having dealings with the State organisation.

(d) In my capacity as Executive Director, I believe that: -

(i) there is no reason to suppose that those responsible for the invalidity have acted other than in a bona fide manner;

(ii) the invalidities did not arise as a result of a knowing and deliberate act on the part of the officers of the State organisation;

(iii) the invalidities arose due to inadvertence; and,

(iv) the officers of the State organisation, upon appreciating the omission, took the steps available to them to rectify the deficiencies in the affairs of the State organisation.

13 In his affidavit filed 17 June 2008 Mr Seidler addressed a matter raised with him in the proceedings regarding the persons comprising the applicant's Executive Committee. He clarified that Mr Scott Beynon and Mr Ron Bracken had vacated the office of Vice-President in February 2008 and that Mr Ross Mitchell and Mr Paul Maginnity had filled those two casual vacancies.

14 The annexures to Mr Seidler’s affidavit filed on 17 June included: extracts from the Rules of the federally registered Master Builders' Association of New South Wales (Rules 14, 15 and 18); extracts from the Rules of the applicant (Rules 14 and 18); a letter dated 13 December 2007 addressed to Mr Seidler from the Returning Officer of the Australian Electoral Commission declaring the outcome of certain uncontested elections and otherwise confirming the outcome of certain contested elections for the federally registered organisation; and finally, a Declaration of Mr Seidler dated 11 April 2008 confirming the applicant kept a “register of members” electronically and that “such register of members is updated regularly and in accordance with the requirements of the Regulations of the Industrial Relations Act 1996”, identifying those purporting to be “office-holders of the Association for President, Deputy President and 4 Vice-Presidents” and various “Councillors”, together with the registered offices of the applicant.

15 Rules 14.3, 18.2, 18.4 of the applicant's Rules provide that offices of the President, the Deputy President, the Vice-Presidents and the remaining members of the Council of Management shall be elected annually. I also note sub-rules 14.24.1 and 14.24.2 which state:

14.24.1 At least One month prior to an election the President shall provide the Industrial Registrar with a Statutory Declaration stating, if it be the case, that the membership of the New South Wales Branch of the Master Builders Association of New South Wales registered under the Industrial Relations Act 1988 (the NSW Branch) and the membership of the Association are identical.

At this time the President shall also provide the Industrial Registrar with a copy of the Rules of the NSW branch relating to the elections of the holders of offices and seek the Approval of the Industrial Registrar that the persons elected to office in the NSW branch be validly elected to the corresponding offices of the Association.

14.24.2 Should the Industrial Registrar grant such approval, the persons elected to offices of th eNSW Branch shall be taken to be validly elected to the corresponding offices of the Association.

16 It may be noted that the reference in the above sub-rules to "Association" is a reference to the applicant, whilst the reference to "the New South Wales Branch of the Master Builders’ Association of New South Wales" is a reference to the State branch of an organisation registered under Federal industrial legislation.

Relevant statutory provisions

17 The main provision with which the Court is concerned is s 288 of the 1996 Act. It enables the Court to overcome the potential adverse implications for an organisation where an invalidity has occurred in connection with the management or administration of the organisation, or an election or appointment in the organisation or the making or alteration of the rules of the organisation. The section is in the following terms:

288 Commission may make orders in relation to consequences of invalidity

(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 Commission for the determination of the question whether an invalidity has occurred in:

(a) the management or administration of the organisation, or

(b) an election or appointment in the organisation, or

(c) the making or alteration of the rules of the organisation.

(2) On an application under subsection (1), the Commission may make such determination as it considers appropriate.

(3) If, in a proceeding under subsection (1), the Commission determines that an invalidity of a kind referred to in that subsection has occurred, the Commission may make such order as it considers appropriate:

(a) to rectify the invalidity or cause it to be rectified, or

(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 Commission may give such ancillary or consequential directions as it considers appropriate.

(5) The Commission must not make an order under subsection (3) without satisfying itself that such an order would not do substantial injustice to:

(a) the organisation, or

(b) any member or creditor of the organisation, or

(c) any person having dealings with the organisation.

(6) The Commission may determine:

(a) what notice, summons or rule to show cause is to be given to other persons of the intention to make an application or an order under this section, and

(b) whether and how the notice, summons or rule should be given or served and whether it should be advertised in any newspaper.

(7) This section applies:

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

(b) to an invalidity occurring in relation to an association before it became an organisation.

18 Section 239 of the 1996 Act provides that:

239 Rules may provide for elections for offices in State branch of Federal organisation to be elections for purposes of State organisation

(1) The rules of a State organisation registered under this Chapter may provide that persons elected to offices in a State branch of a Federal organisation are taken to be validly elected to the corresponding offices in the State organisation registered under this Chapter if the Industrial Registrar is satisfied that:

(a) the membership of the State branch of the Federal organisation and the State organisation registered under this Chapter is identical or substantially similar, and

(b) the rules of the State branch of the Federal organisation relating to the election of the holders of offices comply substantially with the requirements relating to election of the holders of offices under this Act.

(2) The regulations may specify circumstances in which:

(a) the membership of organisations is or is not substantially similar for the purposes of subsection (1) (a), or

(b) the rules of an organisation comply or do not comply substantially with the relevant provisions for the purposes of subsection (1) (b).

(3) In this section, State branch of a Federal organisation means a State branch of an organisation registered under the Workplace Relations Act 1996 of the Commonwealth.

Section 278 of the 1996 Act provides:

278 Records to be kept and lodged by organisations

(1) A State organisation must keep the following records:

(a) a register of its members, showing the name, postal address of each member and such other particulars as may be prescribed by the regulations,

(b) a list of the offices in the organisation,

(c) a list of the names, postal addresses and occupations of the persons holding the offices,

(d) such other records as are prescribed by the regulations.

(2) A State organisation must:

(a) enter in the register the name and postal address of each person who becomes a member, within 28 days after the person becomes a member, and

(b) remove from the register the name and postal address of each person who ceases to be a member, within 28 days after the person ceases to be a member, and

(c) enter in the register any change in the particulars shown on the register, within 28 days after the matters necessitating the change become known to the organisation.

(3) A State organisation must lodge with the Industrial Registrar once in each year, at such time as is prescribed by the regulations:

(a) a statutory declaration by the secretary of the organisation certifying that the register of members has, during the immediately preceding calendar year, been kept and maintained as required by subsections (1) and (2), and

(b) a copy of the records required to be kept under subsection (1) (b), (c) and (d), certified by statutory declaration by the secretary of the organisation to be a correct statement of the information contained in those records.

(4) A State organisation must, within 28 days, lodge with the Industrial Registrar notification of any change made to the records required to be kept under subsection (1) (b), (c) and (d), certified by statutory declaration by the secretary of the organisation to be a correct statement of the changes made.

(5) The records kept by a State organisation under this section must be kept at the registered office of the organisation or other place approved by the Industrial Registrar.

(6) A person authorised by the Industrial Registrar may inspect, and make copies of, or take extracts from, the register of members of a State organisation, or a part of the register, at such times as the Industrial Registrar specifies.

(7) A State organisation must cause its register of members, or each part of the register, to be available, at all relevant times, for the purposes of subsection (6), at the office where the register is kept, to a person authorised by the Industrial Registrar under that subsection.

(8) If:

(a) a member of a State organisation requests the Industrial Registrar to give a direction under this subsection, and

(b) the Industrial Registrar is satisfied:

(i) that the member has been refused access to the register of members, or a part of the register of members, of the organisation at the office where the register is kept, or

(ii) that there are other grounds for giving a direction under this subsection,

the Industrial Registrar may direct the organisation to deliver to the Industrial Registrar, before a specified day, a copy of the register certified by statutory declaration by the secretary or other specified officer of the organisation to be, as at a day specified in the certificate that is not more than 28 days before the first-mentioned day, a correct statement of the information contained in the register, for the member to inspect at the office of the Industrial Registrar.

(9) If default is made in complying with a provision of this section, the organisation is guilty of an offence.

Consideration

19 It would appear the applicant was first registered under the Industrial Arbitration Act 1901 on 29 September 1906. The registration of the applicant was confirmed under Chapter 5 of the Industrial Relations Act 1991 ('the 1991 Act') on 22 December 1995, the organisation having been regarded as a 'continued unincorporated industrial organisation of employers' taken to be registered pursuant to s 641 of the 1991 Act on its commencement. The applicant organisation is to be taken to be an industrial organisation of employers registered under Chapter 5 of the 1996 Act pursuant to s 223(1) of that Act.

20 As The Master Builders' Association of New South Wales was incorporated under section 421 of the 1991 Act, it is considered to be a "State organisation" in terms of section 217 of the 1996 Act. Therefore, Part 4 of Chapter 5 of the 1996 Act (Regulation of State Industrial Organisations) is said to apply to the organisation. The rules of the applicant registered on 22 December 1995 have remained unaltered except for a change of registered office address on 24 April 1996. The registered office of The Master Builders' Association of New South Wales is at Level 3, 51-57 Holt Street, Surry Hills, NSW, 2010.

21 Section 249 of the 1996 Act provides that regulations may make provision for or with respect to the election of officers of State organisations. Pursuant to clause 31 of the Industrial Relations (General) Regulation 2001 the provisions of sections 442-451 of the 1991 Act (and the regulations under those provisions) apply to a State organisation as regulations made under section 249 of the 1996 Act. Rule 14 of the applicant's Rules constitutes a Council of Management of the organisation, with officers to be elected annually.

22 As it was noted earlier, preserved s 444(1) of the 1991 Act provides that, when an election is required to be held, an organisation must apply in writing to the Industrial Registrar requesting that the Industrial Registrar arrange for the conduct of an election for an office in the organisation in accordance with the Rules of the organisation. There is no record of any application to the Industrial Registrar for an election of officers since an unsuccessful application in 1995 for approval of special arrangements for the appointment of a returning officer other than the State Electoral Commissioner Office.

23 Having regard to the relevant preserved provisions of the 1991 Act, Rules 14.3, 18.2 and 18.4 and the evidence of Mr Seidler, I am satisfied that the applicant had an obligation to hold annual elections for its Council of Management, its President, its Deputy President and its Vice-Presidents. As I have noted, there is no record of any application to the Industrial Registrar for an election of officers since 1995, including for the year 2007.

24 Further, it will have been seen that pursuant to sub-rule 14.24 of the applicant's Rules, subject to certain conditions being met, the applicant may seek the approval of the Industrial Registrar that the persons elected to office in the NSW branch of the federal organisation be validly elected to the corresponding offices of the applicant. The applicant has never lodged with the Industrial Registrar the documents required for sub-rule 14.24 to operate.

25 I find that the provisions of Rule 14.24 have not been complied with in that the applicant did not seek the approval of the Industrial Registrar that the persons elected to office in the federal organisation (also known as the Master Builders’ Association of New South Wales) be validly elected to the corresponding offices of the applicant.

26 In its grounds and reasons supporting the amended application, it was stated by the applicant that:

This application deals with the operations of the State organisation during the financial year ending 30 June 2007, and subsequently following the Annual Meeting of the corporate and Federally registered entity held on 11 December 2007. Matters related to financial years ending on 30 June 2006, 30 June 2005, and 30 June 2004 will be the subject of separate applications to the Court.

27 Given my findings, it follows that for the purposes of s 288(1)(b) of the 1996 Act:

(1) an invalidity occurred in 2007 when the applicant failed to apply to the Industrial Registrar to conduct elections to fill offices of the applicant; and

(2) an invalidity occurred in 2007 when the applicant failed to obtain the Industrial Registrar’s approval under Rule 14.24.1 of the applicant's rules for persons elected to office in a related federal organisation to be validly elected to corresponding offices in the State organisation.

28 The applicant appears to concede that invalidities similar to or the same as those that occurred in 2007 also occurred in 2004, 2005 and 2006. Given the Industrial Registrar's report that there is no record of any application by the applicant to the Industrial Registrar for an election of officers since 1995, prima facie, invalidities also occurred from 1996 onwards. They will need to be addressed by the applicant. I propose to make orders in that respect pursuant to s 288(4) of the 1996 Act.

29 In relation to the invalidities in 2007, Mr Seidler deposed that the membership of The Master Builders’ Association of New South Wales registered under the Workplace Relations Act 1996 (Cth) was identical to the membership of the applicant. He further deposed that the rules of the State branch of the Federal organisation relating to the election of the holders of offices comply substantially with the requirements relating to election of the holders of offices under the 1996 Act (see s 239(1)(b) of the 1996 Act). Further, that the 2007 election of office bearers of The Master Builders’ Association of New South Wales registered under the Workplace Relations Act was conducted by the Australian Electoral Commission on 11 December 2007.

30 On one view, in the absence of a properly elected Council of Management, including those elected to the position of President, Deputy President and the four Vice-Presidents contemplated by the applicant’s Rules, there can have been no legitimate or valid dealing in any of the property of the applicant or any legitimate or valid actions taken with respect to the operation of the applicant in 2007 and thereafter. As such, on that view, it would be open to make an Order under s 288(3) of the 1996 Act in general terms as any action taken by those purporting to act in those positions would constitute an “act, matter or thing rendered invalid by or because of the invalidity”.

31 Mr Seidler has deposed that:

the making of an order under Section 288 will not do substantial injustice to the State organisation, any member or creditor of the State organisation; or any person having dealings with the State organisation;

and that in his capacity as Executive Director of the applicant:

(i) there is no reason to suppose that those responsible for the invalidity have acted other than in a bona fide manner;

(ii) the invalidities did not arise as a result of a knowing and deliberate act on the part of the officers of the State organisation;

(iii) the invalidities arose due to inadvertence; and,

(iv) the officers of the State organisation, upon appreciating the omission, took the steps available to them to rectify the deficiencies in the affairs of the State organisation.

32 I accept the foregoing affidavit evidence of Mr Seidler, there being no reason why I should not. The applicant indicated it was not aware of any member having any grievance or objection to the manner in which persons named had assumed office.

33 In light of my findings regarding the invalidities associated with the election of office holders in 2007, and having satisfied myself about the matters in s 288(5) of the 1996 Act, I intend to make the orders sought by the applicant.

34 I turn to the applicant's failure to lodge duly audited financial accounts and a failure to lodge related certificates and an auditor's report. In this respect, I have already referred to the Industrial Registrar's report and his correct description of the relevant legislative provisions governing financial accountability. As to the applicant's failures, the Registrar found that:

· no financial accounts were lodged with the Industrial Registrar in relation to the financial years ended 30 June 1997 or 1998;

· the financial accounts lodged with the Industrial Registrar on behalf of the organisation in relation to the financial years ended 30 June 1999 and 30 June 2000 are those of 'Master Builders Association of New South Wales Pty Limited (A.C.N. 074397 532)';

· no financial accounts have been lodged with the Industrial Registrar in relation to the financial years ended since 30 June 2000; and

· no record has been found of any return by the applicant under s 278 of the 1996 Act for the year 2007. Section 278 of the 1996 Act requires that each State organisation must lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders.

35 Filed with the amended application was:

· a certificate issued by Mr Seidler as the secretary of the applicant as required by s 518 of the 1991 Act;

· a statement issued by Mr Seidler as the Executive Director of the applicant as required by s 280 of the 1996 Act;

· a certificate issued by the Committee of Management of the applicant as required by s 510(1) of the 1991 Act and Regulation 59(1)(b) of the Industrial Relations Regulations 1992;

· an Auditor's Report as required by s 514 of the 1991 Act and s 282(3) of the 1996 Act;

· a certificate issued by the Accounting Officer of the "controlling entity", The Master Builders' Association of New South Wales (an organisation registered under the Workplace Relations Act 1996 (Cth)) purportedly as required by s 510(1) of the 1991 Act and Regulation 59(1)(a) of the Industrial Relations Regulations 1992;

· a certificate dated 13 December 2007 of Mr Seidler, as secretary of The Master Builders' Association of New South Wales (an organisation registered under the Workplace Relations Act 1996 (Cth)) pursuant to s 268 of Schedule 1B of the Workplace Relations Act 1996, certifying the lodgement of financial accounts that had been presented to the Association's Annual General Meeting of members held on 11 December 2007;

· the Annual Report of The Master Builders' Association of New South Wales (an organisation registered under the Workplace Relations Act 1996 (Cth)) presented to the Association's Annual General Meeting held on 11 December 2007 and containing that Association's financial accounts and those of its controlled entities for the financial year ended 30 June 2007; and

· the financial report to members of The Master Builders' Association of New South Wales (an organisation registered under the Workplace Relations Act 1996 (Cth)) for the year ending 2007.

36 What I gather from a reading of the amended application and Mr Seidler's affidavit of 20 May 2008 is that whilst the audited accounts filed with the application in respect of the 2007 year were the accounts of The Master Builders' Association of New South Wales, which is an organisation registered under the Workplace Relations Act 1996 (Cth):

(i) The membership roll, offices, and accounts of the State organisation [the applicant] are common to those of the entity registered under the Workplace Relations Act 1996.

(ii) Over the period of the invalidities in the management and administration of the State organisation covered by this application, the entity registered under the Workplace Relations Act 1996 operated in accordance with the requirements of the Workplace Relations Act 1996, and in accordance with the requirements of the Corporations law.

37 In other words, what the applicant was submitting was that, as the federal organisation had satisfied the requirements of the federal legislation regarding its financial accounts and given the federal organisation was, for all intents and purposes the same as the applicant, the Court should accept that as the necessary certificates, statements and reports had been filed in this matter the legislative requirements relating to financial accountability had been satisfied, at least in relation to the 2007 financial year.

38 There can be no doubt that an invalidity has occurred in the management or administration of the organisation by the failure of the applicant to lodge the necessary financial accounting documentation with the Industrial Registrar. I find that an invalidity occurred pursuant to s 288(1)(a) of the 1996 Act in relation to 2007.

39 I must say, however, I have some reservations about rectifying the invalidity by accepting the financial accounting documentation filed with the amended application. The financial accounts set out in the Annual Report and Report to Members relate exclusively to the federal organisation and its controlled entities. Nowhere in those documents is reference made to the applicant. Nevertheless, it was stated that the accounts, certificates and auditor's reports relate to the applicant and the material filed appears to me to comply with the legislative requirements regarding financial accountability.

40 The applicant appears to have overlooked in its amended application the terms of an order that seeks to rectify the failure to lodge financial accounting documentation for 2007. However, I will make the necessary orders in accordance with the requirements of s 288 of the 1996 Act, noting in particular s 288(5). The applicant will need to address the years prior to 2007.

41 I note, in passing, that s 520 of the 1991 Act was preserved. That section is in the following terms:

520 Waiver of requirement to lodge reports etc.

(1) An organisation may apply to the Industrial Registrar for exemption from the requirement under section 518 that the organisation must lodge specific documents with the Industrial Registrar if the organisation has lodged documents that comply with the requirement of section 280 of the Industrial Relations Act 1988 of the Commonwealth and that are also substantially in accordance with the requirements of this Act.

(2) On being satisfied by the organisation that it is not appropriate that the organisation should be required to lodge specific documents with the Industrial Registrar under section 518, the Industrial Registrar may issue to the organisation a certificate to that effect specifying the document or documents that need or need not be lodged by the organisation with the Industrial Registrar for the financial year specified in the certificate and, on issue of the certificate, section 518 applies to the organisation as modified by the certificate.

42 I further note, however, that no certificate has ever been issued under s 520. Moreover, there may be some doubt about the efficacy of the provision and how it fits with Pt 5 of Ch 5 of the 1996 Act, which deals with the regulation of industrial organisations other than State organisations.

43 There is one final matter and it is that on 11 April 2008 Mr Seidler filed a statutory declaration pursuant to s 278(3) of the 1996 Act. In his affidavit of 17 June 2008 Mr Seidler deposed as to certain changes to office holders, in that Mr Beynon and Mr Bracken vacated the office of Vice-President in February 2008 and the casual vacancies were filled by Messrs Mitchell and Maginnity following a Council of Management meeting on 12 February 2008.

44 This may have addressed that invalidity that occurred in relation to a failure to comply with s 278 in respect of the 2007 year, but it does not address the years prior to 2007 when the applicant appears to have failed to have lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders. This failure will need to be addressed by the applicant.

Orders

45 The Court makes the following orders effective from the date of this judgment:

(1) That the Court determines, declares and orders that invalidities have occurred in the management or administration of The Master Builders' Association of New South Wales.

(2) That the Court determines, declares and orders that invalidities have occurred in elections in The Master Builders' Association of New South Wales.

(3) That upon the basis of such invalidities, the Court, being satisfied that the following orders made do not do substantial injustice to The Master Builders' Association of New South Wales or to any member or creditor of that Association or to any person having dealings with the Association, orders:

(a) that the effect or effects of the failure to make an application to the Industrial Registrar in 2007 under the preserved s 444 of the Industrial Relations Act 1991 regarding the conduct of ballot for offices of the State organisation is negatived;

(b) that the effect or effects of the failure to make an application to the Industrial Registrar in 2007 under Rule 14.24.1 of the applicant organisation's rules is negatived and rectified by declaring that persons elected to office in The Master Builders' Association of New South Wales, an organisation registered under the Workplace Relations Act 1996 (Cth), in a ballot conducted by the Australian Electoral Commission on 11 December 2007 are declared to be validly elected to the corresponding offices in the applicant organisation;

(c) that any decisions made by the Executive Committee of the applicant organisation when constituted by Daniel Murphy, Gordon Leggett, Martin Patience, Peter Court, Ron Bracken and Scott Beynon from 11 December 2007 to the date of this order and any actions taken by Daniel Murphy, Gordon Leggett, Martin Patience, Peter Court, Ron Bracken and Scott Beynon in the performance of their duties and functions as the Executive Committee of the applicant organisation or in conformity with decisions of the Executive Committee of the applicant organisation that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated;

(d) that any decisions taken by the Council as constituted by persons declared to be elected to the Council by this order along with any actions taken by those persons so declared to be elected that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated;

(e) that the actions of the applicant organisation in filing audited accounts for the financial year ended 30 June 2007 are validated;

(f) that the effect of the applicant organisation's failure in 2007 to lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders pursuant to s 278 of the Industrial Relations Act 1996 is negatived and rectified by the statutory declaration filed by Brian Seidler on 11 April 2008 concerning particulars of office holders of the organisation and the affidavit sworn by Mr Seidler on 17 June 2008 in these proceedings;

(g) that the applicant organisation takes all necessary steps within three months of the date of this judgment to address any invalidity which may have occurred in an election in the organisation prior to the year 2007;

(h) that the applicant organisation takes all necessary steps within three months of the date of this judgment to file audited accounts for those years prior to 2007 when no such accounts were filed; and

(i) that the applicant organisation takes all necessary steps within three months of the date of this judgment to file the necessary statutory declarations pursuant to s 278(3) and s 278(4) of the Industrial Relations Act 1996 in respect of those years prior to 2007 when statutory declarations were not filed by the applicant organisation.

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LAST UPDATED:
3 September 2008