Leveridge v. Shop Distributive and Allied Employees' Association

(1977) 31 FLR 385
17 ALR 145

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(Judgment by: Smithers J)

Between: Leveridge
And: Shop Distributive and Allied Employees' Association

Court:

Judges:
Smithers JJ.B. Sweeney J
Evatt J

Subject References:
Conciliation and Arbitration

Judgment date: 26 August 1977

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Judgment by:
Smithers J

(EDITORS' NOTE: Section 141 of the Concilation and Arbitration Act 1904 was amended by Act No. 108 of 1977, which was assented to on 21st October, 1977, but has not yet been proclaimed, so as to include sub-s. (8A) which provides for the making of orders under s. 140 in proceedings under s. 141.)

In these proceedings the claimant Mrs. Leveridge seeks orders:

(i)

that r. 5 (c) (ii) of the rules of the Victorian branch of the Shop Distributive and Allied Employees' Association contravenes s. 140 (1) (c) of the Conciliation and Arbitration Act 1904;

(ii)

that r. 36 (b) of the rules of the Victorian branch of the Shop Distributive and Allied Employees' Association contravenes s. 140 (1) (c) of the Conciliation and Arbitration Act 1904;

(iii)

such further or other orders, interim or final, as the nature of the case may require upon the ground set forth in the affidavit of the claimant sworn on 14th March, 1977, and filed herein. (at p389)

Mr. Handley Q.C. and Mr. Kenzie appeared for the claimant, Mr. Macken appeared for the respondent association. Mr. Powell Q.C. and Mr. Lawrence appeared for the members of the State council of the Victorian branch of the Shop Distributive and Allied Employees' Association who appeared as persons on whom pursuant to an order of Sweeney J. notice of these proceedings had been served. (at p389)

Rules 5 (b) and (c) and 36 (a) and (b) are in the following terms:

"5.

BRANCH CONFERENCE.

(b)

The conference shall be the supreme governing body of the branch.

(c)

Delegates to the conference shall be:

(i)

The president, the vice-president, the secretary-treasurer, the assistant secretary-treasurer; and

(ii)

Delegates from the divisions who must have been financial members of the union for not less than two years immediately preceding the close of nominations and have been elected in accordance with these rules, provided that for the branch conference to be held in June 1975, persons who have been financial members for not less than twelve months immediately prior to nomination shall be eligible to be elected as delegates."

"36.

ELECTIONS.

(a)

The elections to be conducted pursuant to these rules shall be as follows:

(i)

the election of division delegates to conference;

(ii)

the election of secretary-treasurer and the assistant secretary-treasurer;

(iii)

the election of branch delegates to national council;

(iv)

the election, where necessary, of trustees.

(b)

No member shall be eligible to stand for election to any position (other than for the position of trustee for which position a life member may also be eligible) unless he has been a financial member of the union for two years immediately preceding the close of nominations, provided that for any election held prior to 31st December, 1976, a member shall be eligible to stand for election if he has been a financial member for twelve months immediately preceding the close of nominations." (at p390)

It appears that the main interest of the claimant in these proceedings is related to her desire to be a candidate for election as a divisional delegate to the Victorian branch conference in an election for that office currently in progress. That election is being conducted by Mr. Abbott, the Electoral Officer for the State of Victoria, pursuant to a request of the branch under s. 170 of the Conciliation and Arbitration Act 1904. The date on which nominations for that election closed as specified by Mr. Abbott was 4th March, 1977. (at p390)

The claimant did nominate as a candidate on or prior to that date but the returning officer rejected her nomination on the grounds that the records of the association did not show that she was a member of the Victorian branch. It also appears that even if, as she alleges, she were a member of the Victorian branch on 4th March, 1977, she had not been a member of the branch for a period of two years prior to that date. (at p390)

It is clear however that she is and has been a member of the association at all material times. Accordingly she is entitled to have the question of the validity of the rules in question determined under s. 140 of the Act. (at p390)

However, it is with relation to 4th March, 1977, that her challenge to the rules in question is intended to have practical significance. (at p390)

But the rule nisi in these proceedings was not made until 15th March, 1977. Accordingly a question arises as to the significance, with respect to the validity of the rules as at 4th March, 1977, of a declaration that the rules contravene s. 140 (1) in some respect which may be made in these proceedings.

Relief in proceedings commenced subsequent to date in respect of which a rule is challenged. (at p390)

The claimant has not sought a declaration of this Court such as is suggested in the observations of Windeyer J. in The Queen v. Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union (Australian Section) (1960) 103 CLR 368 , hereinafter referred to as "Shearer's case" namely that "at the date of the member's application" the challenged rules contravened s. 140 (1). (at p390)

In the absence of some special form of declaration relating back to 4th March it is difficult to see how a declaration made under s. 140 will assist the claimant to obtain acceptance by the returning officer of her nomination in the election for divisional delegate to branch conference and to national council. An order that a rule contravenes s. 140 (1), as contemplated by s. 140 (5) results in the rule being deemed to be void only from the date on which the order is made. And, if an order in a proceeding under s. 140 is regarded as being made pursuant to sub-ss. (2) and (3) of s. 140 only, it would be made only inter partes and the returning officer is not a party to these proceedings. (at p391)

If the claimant seeks to use the order in proceedings under s. 141, apart from any question as to whether the electoral officer is a person bound to obey the rules of the association, sub-ss. (5) and (9) of s. 141 expressly provide that in proceedings under s. 141 no order is to be made which would have the effect of invalidating a step taken in an officially conducted election. (at p391)

The claimant has not sought an inquiry into the election pursuant to s. 159 of the Act. Even if she did an order made in these proceedings under s. 140 (5) would say nothing as to the validity of the rules in question as at 4th March, 1977. (at p391)

However the validity of the rules in question in this case as at 4th March, 1977, is under challenge in proceedings by members of the association other than the claimant in proceedings V Nos. 9, 10 and 12 of 1977 brought by such members under s. 159 and instituted in this Court by virtue of s. 159 (4) (a) as inquiries as to whether the rejection of their nominations on grounds depending upon the validity of those rules was an irregularity in a step in the election. Those inquiries were held in this Court in conjunction with these proceedings of the claimant under s. 140 and certain other proceedings (V No. 5 of 1977) brought by the claimant under s. 141 of the Act. (at p391)

It is to be observed that according to circumstances, a rule may have actually contravened s. 140 (1) from the time sub-s. (1) was enacted, or from the time the rule was first made, or from some later time when circumstances arose as a result of which the rule operated in a manner which was in contravention of sub-s. (1). (at p391)

In the circumstances it is desirable to consider the effect of s. 140 in relation to proceedings brought otherwise than under that section where the validity of a rule of an organization registered under s. 132 of the Act is in issue in relation to a date prior to an order under s. 140 or in the absence of any such order, i.e. because Mrs. Leveridge did not seek such an order. (at p391)

If it is the effect of s. 140 that rules of an organization which actually are in contravention of sub-s. (1) are nevertheless to be considered and treated as valid until an order is made under sub-s. (5) and then treated as void only as from the date of that order, then, neither the claimant nor the other members whose nominations have been rejected can obtain any relief even although an order may be made at this stage that the rules contravene sub-s. (1). (at p391)

Apart from the observations of Windeyer J. in Shearer's case (1960) 103 CLR, at p 389 , there is no judicial support for the view that in proceedings under s. 140 an order may be made which will have the effect of establishing that a rule has contravened sub-s. (1) from some date prior to the making of the order or the relevant rule nisi. It is difficult from the terms of s. 140 to find a basis of authority for making an order so devised. In addition the observations of the learned justice themselves are somewhat tentative. But he recognizes the desirability of a member being able to challenge enforcement against him of a rule which does in fact contravene the provisions of sub-s. (1) but is not the subject of an order to that effect and he expresses the view that in proceedings under s. 140 the issue whether a rule contravenes sub-s. (1) should be determined by considering whether it contravened that subsection at the date in relation to which its observance is challenged. Again however there is no other judicial support for this view. (at p392)

It rests no doubt on what may be thought to be implied in the scheme of s. 140 and the intention to be seen in s. 140 to protect members from the operation of oppressive rules. (at p392)

But if the view of the majority in Shearer's case (1960) 103 CLR, at pp 372-388 is accepted then the difficulties discussed above are not encountered. The view of the majority is that sub-s. (1) operates of its own force to invalidate a rule which contravenes its provisions. It sees the judicial procedure authorized in s. 140 as providing a vehicle for a member to obtain an order that an existing rule contravenes s. 140 (1) which will operate inter partes but which will also operate to establish, in rem, as it were, that the rule in question is to be treated in all places and for all purposes as being void as from the date of the order. (at p392)

In accordance with this view no implication arises that an order under s. 140 is a condition of an attack upon the validity of a rule in any proceedings in any court where the validity of the rule may be relevant to the issues to be decided therein. Also if the correct view is that sub-s. (1) does operate of its own force to render void any rule which contravenes that subsection, it would seem to follow that whenever in any proceeding before any court an issue arises in the determination of which the validity or otherwise of a union rule, according to the standards prescribed in sub-s. (1) is relevant, it is the duty of that court where no relevant order has been made under s. 140 to determine for itself whether, with respect to any particular date, sub-s. (1) has operated to invalidate the rule. Not only would this appear to be involved in the reasons expressed by the majority of the justices in Shearer's case but it would appear to follow also from what was said by the Chief Justice and Kitto J. (1960) 103 CLR, at pp 379-385 . These justices took the view that sub-s. (1) did not of itself operate to invalidate a rule, but Kitto J., with whom the Chief Justice agreed, said that on the assumption that sub-s. (1) does operate of its own force to invalidate a rule which contravenes its provisions, the section would not possibly mean that invalidation of a rule by force of sub-s. (1) can never be judicially recognized until a second invalidation has been brought about by the application of sub-s. (5). And it would seem to follow on the assumption postulated that invalidity of a rule by force of sub-s. (1) must always be judicially recognized where it goes to a relevant issue. (at p393)

If this be so a member who has suffered as the result of action adverse to him being taken under a rule which does contravene sub-s. (1) of s. 140 but before he can seek an order under sub-s. (2) is not without a remedy or a procedure to obtain it. He may proceed under s. 141. (at p393)

In such a proceeding the issues raised might well involve the validity of a rule pursuant to which action, for example dismissal from office, had previously been taken against him; cf. Cameron v. Duncan (1965) 8 FLR 148 , at p 248 . The critical date on the issue of the validity of the rule would be the date of the action taken. That, in the words of Windeyer J. would be the date "in relation to which its observance is challenged" (1960) 103 CLR, at p 389 . The court not being under any restrictions arising by implication from s. 140 would be required to consider the state of the rules at the critical date so that it would make an order for the performance and observance of the rules as they really were on and in relation to that date. (at p393)

Similarly there is no reason to think that an implication is to be found in s. 140 or other provisions of the Act that, where there is no antecedent order under s. 140, the court is unable to investigate for itself the state of the rules at a critical date and treat as void any rule or part of a rule which according to the findings made by it contravened sub-s. (1) at the relevant time. (at p393)

But this all depends on whether the correct view is that s. 140 (1) operates of its own force to render void rules contravening its provisions. (at p393)

It is said that this view is expressed in Shearer's case only by way of obiter dicta . But it has stood now from 1960, as the majority view of the ultimate Court of Appeal formally expressed in a proceeding in which all the members of the High Court specifically directed their attention to the question. Since that time it has been applied in this Court. (See also Atkinson v. Lamont (1938) QSR 33 . Since that time also the Act has been dealt with by Parliament on a number of occasions in various respects. Sections 140 and 141 have been under review but nothing has been done to change any words in any way which would indicate that Parliament is not satisfied with the majority view that s. 140 (1) does operate of its own force to invalidate rules which contravene its provision or with the interpretation of the majority as to the effect of sub-s. (5). In addition the view of the majority contributes so materially and it would seem, so necessarily, to the protection and relief of members of organizations from the operation against them of oppressive rules that there is good reason to think that it accurately reflects the intention of Parliament. I would refer also on this question to the observations in my reasons in Clarke v. Maynes (1977) LB Co's Indus Arb Serv, Current Review, p 12 . (at p394)

Accordingly it will be necessary for the court in proceedings V Nos. 5, 9, 10 and 12 to ascertain whether on 4th March, 1977, in the circumstances then existing, rr. 5 (c) (ii) and 36 (b) did contravene the provisions of s. 140 (1).

Rules 5 (c) (ii) and 36 (b) - oppressive or unreasonable? (at p394)

It is said that the invalidity of branch rr. 5 (c) (ii) and 36 (b) arises out of:

(a)

the imposition upon each union member of a condition of the right to nominate for the office of divisional delegate to conference or for the other offices referred to in r. 36 (b) that he shall have been a member continuously during two years immediately preceding the close of nominations for any such office; and

(b)

the imposition upon each member of a condition of so nominating that he has been a financial member during the relevant two-year period of membership. (at p394)

From the argument presented by counsel it was clear that the solution of the questions raised required an examination of the operation of the rules in question in the context of the organizational structure of the branch in its setting in the federal organization and the characteristics of the membership. (at p394)

Relevant characteristics are that the membership includes, first, a substantial number of employees who engage in employment as a shop assistant or other occupation within the membership eligibility rules as a life-long or certainly long-term career and hold their union membership during a correspondingly long period; secondly, a substantial number of employees whose employment as a shop assistant is short-term and who engage therein and hold membership between one and three years; and, thirdly, a substantial number of employees whose employment in the industry may be termed transitory and who engage therein and hold their membership for a few months or perhaps for a year. In addition there is a very high turnover of members. (at p394)

The Shop Distributive and Allied Employees' Association (hereinafter called the "association") is a large organization with branches in several States. The current membership of the Victorian branch is 36,000 or thereabouts. The New South Wales branch is the largest branch. It has a current membership exceeding 45,000. The organization of the association and the branches and in particular the Victorian branch may be seen from the following provisions of the rules. (at p394)

The supreme governing body of the association is the national council. It meets in ordinary session in October each second year, but may meet more often. The national council consists of the national president, national vice-president, national secretary-treasurer, national assistant secretary and delegates of each branch elected biennially directly by the members of each branch (federal r. 8 (a)). A branch with a membership in excess of 35,501 is entitled to six national councillors. The national president, national vice-president, national secretary-treasurer and national assistant secretary are elected by and from the national council (federal r. 14). Between meetings of the national council the affairs of the association at the highest level are conducted by the national executive. That executive consists of the four officers mentioned above and at least three other members elected by and from the national council at its ordinary biennial meeting (federal r. 12 (a)). (at p395)

The supreme governing body of the Victorian branch is the branch conference. There are thirty-seven members of conference comprising the branch president, vice-president, secretary-treasurer and assistant secretary-treasurer and thirty-three delegates from divisions. There are eleven divisions throughout Victoria. The metropolitan division has the largest membership. It elects twenty delegates to conference. Ballarat, Bendigo and Geelong divisions elect two delegates each and the seven other divisions one each (branch r. 5). (at p395)

Conference is elected every second year. It meets only once, that being in June of the year of election unless specially called together for some particular reason. Nominations for divisional delegates to branch conference are to be called for not later than the month of December in each year preceding the year of conference and shall close in March of the year of conference (branch r. 40). If an election is necessary in any division a ballot is conducted of the members of that division (branch r. 40 (c)). (at p395)

Members of State council other than the secretary-treasurer and assistant secretary-treasurer are elected by secret ballot of the delegates present at the conference (branch r. 41 (1) (a)). The branch president, vice-president, nine metropolitan State councillors and four country State councillors are elected by secret ballot at each conference (branch r. 41 (1) (b)). They are elected by and from the delegates to conference and hold office until the conclusion of the next succeeding branch conference (cf. branch r. 12 (b) and branch r. 41 (1) (c)). (at p395)

Between branch conferences the management of the branch is in the control of the State council which has up to seventeen members comprising the four branch officers mentioned above, nine State councillors elected by and from the metropolitan division delegates to conference and not more than four State councillors elected from the country division delegates to conference (branch r. 9). (at p396)

The branch secretary-treasurer and assistant secretary-treasurer are elected every four years by secret ballot of all members of the branch (branch r. 12 (c)). (at p396)

The government of divisions is in the hands of divisional meetings, normally held quarterly (branch r. 11). Each division has a president, vice-president, secretary-treasurer and assistant secretary-treasurer. Such officers are elected at the first divisional meeting in each calendar year (branch r. 22). (at p396)

The characteristics of the membership of the Victorian branch referred to above derive from conditions in the industry. In recent years the trend of service in shops and stores has been to self-service. This has reduced the number of skilled sales-persons required in relation to food, clothing and many commodities. This has resulted in much short-term and part-time employment in supermarkets and the like of quite young people, married women, students and other people without lasting interest in the industry. The result has been that in the Victorian branch, during the last few years, there have been admissions and terminations of membership as follows:

(at p396)

It further appears from the evidence that on 4th March, 1977, the proportion of branch members who had a membership of less than two years prior to that date was about sixty-six per centum. (at p396)

There is no evidence of any precise count giving further details of the length of membership of the members on that date. However, with respect to the membership of the New South Wales branch, it is reasonably established that early in 1977 the membership of that branch was: as to ten per cent of members of less than two months' duration; as to fifteen per cent of members of less than six months' duration; as to thirty per cent of members of less than twelve months' duration; as to fifty-nine per cent of members of less than two years' duration; as to seventy-five to eighty per cent of members of less than three years' duration; as to the balance of twenty to twenty-five per cent of three years or longer. (at p396)

Subject to certain qualifications it is not contested that the situation in Victoria may be reasonably estimated by reference to the New South Wales experience. (at p396)

The main qualification is that in some areas late night shopping in supermarkets and other shops takes place in Melbourne on three nights each week whereas in New South Wales it occurs only on one night each week. The effect of this would be that the proportion of members of the Victorian branch with short membership would be likely to exceed that of the New South Wales branch. (at p397)

From the testimony of Mr. Maher it would seem that from 1975 onwards the membership of the Victorian branch could be divided into three categories, first, some 12,000 members being part-time casuals of the schoolboy, student, married woman classifications many of whom work less than ten hours per week and are transitory in their association with the industry and the union; secondly, about 12,000 part-time employees working between ten and thirty-nine hours per week and with relatively short-term interest in the industry and union membership; and, thirdly, full-time employees with a long-term interest in the industry and the union. (at p397)

It was pointed out by Mr. Powell that as to the 24,000 in the first and second groups the figures of new admissions and terminations would indicate that in any period of two years that group would have suffered a turnover of one and a half times or perhaps more. And no doubt the greatest turnover is in the group which has the most fleeting association with the industry, namely those in the first category. (at p397)

It is a reasonable inference, therefore, that in the Victorian branch those members of three or more years of membership constitute between twenty per cent and twenty-five per cent of the total membership. It may be inferred also that between nine per cent and fourteen per cent have a membership of between two and three years. As to the remaining sixty-six per cent it may be inferred that perhaps thirty-three per cent are in the under one-year category and thirty-three per cent in the one-year to two-years category. (at p397)

It is to be observed also that making the best inference possible from the available evidence, the average length of membership of the members of this group of forty per cent is about two years. (at p397)

The two-year members are excluded from office altogether by the current rules. A member whose membership lasts for three years may possibly be able to gain and take office, but only if he joined the association during a particular period of nine months ending two years and three months before June of a year of conference. Thus, he could only nominate in March 1979 and take up office in June 1979 if he became a member in the period commencing in June 1976 and ending in February 1977. If he joined earlier his term of membership would have expired before he took up office. If he joined later he would not have two years' membership before nominating. It is clear, therefore, that even with respect to members of three years' standing the general run of such members would be excluded from taking up office. It may be observed also that even a member who remains a member for four years has only a slight chance of ever qualifying to stand for office. Unless his membership commenced at least two years before the month of March of an election year he would be ineligible for the election in that year and his membership would not last long enough to enable him to stand in the election to be held two years later. (at p398)

It is to be noted also that a member who may remain a member for more than four years but whose membership commenced less than two years before the month of March in an election year will have to wait until March two years further on for an opportunity to stand for office. In such a case the two-year "apprenticeship" period may be extended nearly to four years. (at p398)

If one were to consider a union none of the members of which held their membership for more than two or three years, it would be manifest that members of less than three years' standing would have to be afforded the right to hold office, and this is not only because office bearers could not otherwise be provided but because in no other way could members fully participate in the affairs of the union; cf. s. 2 (f) of the Conciliation and Arbitration Act. No doubt such a union would be an unlikely phenomenon, but the circumstances of the association now before the court certainly approach it. So many of the members of this branch, about seventy-five per cent, are in the under-three-year category that the operations of the branch must necessarily be directed largely to the promotion of the interests of that section of members. Once that is seen, then although the association is not one all of whose members are short term, it is an association the great majority of whose members are short term, one expects that the representative provisions of the rules would reflect that situation. They do, but, for practical purposes, only to the extent that short-term members may vote for the officers if their membership happens to coincide with the time of the biennial ballots. (at p398)

The conclusion is that the association represents a large membership the bulk of whom are members for relatively short terms but has rules which:

(a)

prevent sixty-six per cent of the membership from ever holding office;

(b)

prevent the greater part of an additional ten per cent of groups of members, forming about ten per cent of the membership, from ever holding office; and

(c)

exclude many of the remaining members from standing for office for varying periods between two years and four years and three months. (at p398)

In the light of the foregoing the claimant contends that branch rr. 5 (c) (ii) and 36 (b) contravene the provisions of s. 140 (1) (a) and s. 140 (1) (c) of the Conciliation and Arbitration Act. Those subsections are in the following terms:

"140(1)

The rules of an organization-

(a)

shall not be contrary to, or fail to make provision required by, a provision of this Act, the regulations or an award or otherwise be contrary to a law; . . .

(c)

shall not impose upon applicants for membership, or members, of the organization, conditions, obligations or restrictions which, having regard to the objects of this Act and the purposes of the registration of organizations under this Act, are oppressive, unreasonable or unjust." (at p399)

The chief objects of the Act are expressed in s. 2 and include:

"(e)

to encourage the organization of representative bodies of employers and employees and their registration under this Act; and

(f)

to encourage the democratic control of organizations so registered and the full participation by members of such an organization in the affairs of the organization." (at p399)

It is clear from the authorities that provisions of the kind under discussion are not uncommon in registered organizations. They are based on considerations going to the stability of the organization, and the desirability of persons in office being acquainted with the rules, with the industry and with the practical administration of a union as a registered organization. (at p399)

As was said by Spicer C.J. in Cameron v. Australian Workers' Union (1959) 2 FLR 45 , at p 59:

"Whether any such period of apprenticeship as a member should be a condition of candidature, and if so, the length and character of such period, are matters best left to the decision of members of the organization themselves. No doubt the decision of such questions will differ from union to union and even within a particular union such a question will prompt a variety of views. True it is that a period might be chosen which in effect precluded such a large proportion of members from seeking office that it would be unreasonable".

In that case the court upheld a rule of the Australian Workers' Union which required a candidate for office to have been a member for at least five years and financial member for at least three years. (at p399)

However in MacDonald v. Amalgamated Engineering Union (Australian Section) (1962) 3 FLR 446 , the court disallowed a rule which required candidates for election to the committee of management of the organization to have at least seven years' continuous adult membership in a section which they were ineligible to join if they were not less than forty years of age and which contained in fact a minority of members of the organization. Spicer C.J. and Eggleston J. in their joint judgment said:

"In our view the rules which prescribe the qualifications for the three offices referred to impose upon applicants for membership and on members of the organization conditions and restrictions which are unreasonable and unjust. It is clear that no applicant for membership who is over the age of forty can ever aspire to any of those offices. It is also clear that no member of the industrial section as such can qualify and no member of that section who has reached the age of forty can thereafter qualify. The industrial section comprises over two-thirds of the total membership. Only those members of that section who are under forty can ever qualify and even they can only qualify by transferring to section 1 before they reach the age of forty. They must then wait a further seven years before being eligible for the office in question. With the relative decline of section 1 members and the increase of industrial section members the supreme governing body of the organization and the principal executive officers are necessarily chosen from a minority section of the organization. The members of the majority section as such are for ever excluded under the rules as they now stand. (at p400)

"One of the objects of the Act is to encourage the organization of representative bodies of employees. It is possible that an organization which disqualifies more than two-thirds of its members from possible membership of its supreme governing body ought not to be considered to answer to the description of 'representative'. That description contemplates an organization which can be fairly said to represent its members. A body governed wholly by non-members would not seem to answer that description. On the other hand, an organization may be representative despite the fact that some of its members, such as juniors or members who are no longer active in the industry, are disqualified from holding office therein. One can imagine many other restrictions on the holding of offices which would not affect its representative character. But it is not necessary to reach a final conclusion on this question, since it is a separate requirement that the rules should not impose unreasonable and unjust conditions or restrictions upon applicants for membership or members. The limitation of candidates for office is stringent, and bears no relationship to fitness, capacity or experience. If free transfer between the classes of members were possible, it might be said that every member was capable of qualifying for the highest office. But for the reasons given above, many members who are of an age to give effective service can never qualify, and an aspirant who is young enough to qualify must still wait seven years after transferring to section 1. These limitations are so drastic, and affect so many members, that we are forced to conclude that having regard to the objects of the Act and the purposes of the registration of organizations under the Act, the conditions and restrictions imposed by the qualifications prescribed for election to the offices under discussion are unreasonable and unjust" (1962) 3 FLR, at pp 447-448. . (at p400)

It is unnecessary to consider the issues in this case by reference to the statutory objects set out in s. 2 (e) of the Act, that is the encouragement of the organization of representative bodies of employees and employers. But it is clear that the court which decided MacDonald's case held the view that the exclusion from office of a substantial majority of members may well, according to circumstances, constitute a restriction or condition the imposition of which upon members is unreasonable or unjust. (at p401)

Mr. Powell did not challenge this but said that the rules in question in this case do not exclude any member from standing for office. All he has to do is to remain a member long enough to qualify. This is a logical comment but it does not touch the substance of the matter, namely the practical operation of the rule upon the bulk of the membership whose short-term association with the association is such an important feature. Mr. Powell rightly argued that the court should have regard not only to the context of the rules themselves but also the factual context in which the rules operate. In considering whether conditions and restrictions imposed upon members are reasonable or otherwise the fact that average or usual length of membership is short is clearly part of the relevant factual context and the practical effect of the rules upon members of short membership, as indicated above, is of fundamental importance. (at p401)

Accordingly the branch is to be regarded as having rules which exclude a large majority of its members from holding office. But Mr. Powell argued that it was not unreasonable so to do. Mr. Powell pointed to the inconvenience and futility of electing a short-term member to office. He showed that, even if there were no qualifying period for standing for office, the membership of many members might not persist long enough for a candidate elected in March to take up his office in June. This is a valid comment, but it is not of real significance when the position of members who hold their membership for two years and for three years is considered. (at p401)

Mr. Powell also pointed out, however, that as to some thirty-three per centum of the membership it is impracticable for them, whatever reasonable rules might say, to participate as officers in the management of the association. All rules must provide time for nomination and election and it is difficult to envisage any reasonable timetable which would permit a member of even, perhaps, eight to twelve months' duration to participate usefully as an officer of the association. In addition, the interest of such a member in the affairs of the association is likely to be so peripheral that it could hardly be said that such a person would be a satisfactory officer. That is not to say, however, that in the government of the association the interests of that portion of the membership, such as they are, should not be represented so far as is reasonable. But it cannot be said that the failure of the rules to provide for the persons in that group to attain office is unreasonable. But when one passes from the under-one-year to the one to three-year group different considerations appear. It would appear that this group represents more than forty per cent of the membership at any one time. To my mind a person who is a member of a union for more than a year, or for two years or for three years cannot be said to be a member of transitory or ephemeral association with the union. Forming such a large proportion of the membership with interests not necessarily identical with those of long-time members, it is going a long way to say that that group is not to be represented in the offices of the association, such as divisional conference delegates. Mr. Powell also said that it was desirable to ensure stability in government, and that there was stability in the Victorian branch in only about one-third of its membership. He said that all the offices covered by the rules were important, carried significant responsibilities, and required a degree of experience and skill.

Also the offices covered by the rules included high offices in the association and full-time offices. He urged that in respect of all the offices concerned, and particularly of the latter, restrictions of the kind in question are quite reasonable. He said also that the plebiscite provisions were practical and effective to ensure the control by members of the decisions of the various committees of the branch. In this respect he referred to federal r. 28 (a) according to which a meeting at which five per cent of the members of a branch are present may require the national secretary to submit a matter to the national executive or national council for review or decision. He referred also to r. 28 (b) according to which meetings of any three branches at each of which not less than five per cent of the financial members of the branch are present may by resolution request that a binding referendum of members be held on a proposal that the national council or the national executive take or refrain from taking any specified policy in the conduct of the association's business. (at p402)

Turning to the branch management he referred to branch r. 11 (A) pursuant to which a plebiscite to review a decision of State council or conference upon the receipt by the secretary of a petition requesting a plebiscite signed by 1,000 members of the branch or of resolutions to that effect of a specified number of divisions. (at p402)

These observations are all logical and entitled to weight. But they must be considered against the fundamental characteristic of this association that it is an organization of which the membership is dominantly short term. The unreasonableness of the rules must be assessed having regard, inter alia, to the statutory object of the encouragement of the full participation by the members in the affairs of the association as referred to in s.2 (f) of the Act. It is not to be doubted that for this purpose the affairs of the branch are the affairs of the association. To my mind it is impossible to regard the exclusion from office of such a large proportion of members as is achieved by these rules as compatible with the stated object. This statutory object was only declared by Parliament in 1973. Its presence in the Act has, of course, an influence on the degree of authority to be accorded to decisions on matters such as those now before the court which were delivered before 1973. However, in the present case it is my view that in accordance with those decisions the branch rules now in question are to be regarded as imposing unreasonable restrictions upon members even disregarding s. 2 (f). The situation is one in which an organization the bulk of whose members have short-term membership draws all the office bearers from a quite small minority with long-term membership whose interests are not necessarily the same as those of the majority. Rules imposing restrictions on members which produce that result impose restrictions which are unreasonable and oppressive. This is not to say that the requirements of stability and experience are to be ignored, but it is to say that the structure of government is to reflect the realities arising from the prevailing characteristics of the membership. It is not to say that every office in the organization is to be thrown open to the latest transitory, casual, youthful, employee.

Nor is it to say that a suitable proportion of representation by persons of lengthy membership should not be required by rule in respect of all management committees and for various particular offices. Indeed, with respect to the offices of branch secretary-treasurer and assistant secretary-treasurer it cannot be said that an "apprenticeship" of two years' membership or even two years' continuous financial membership is an unreasonable condition upon the rights of members to stand for those offices. Continuity in being financial during the two-year period may be thought to be an onerous condition but it would be going too far to say that the members of the organization might not reasonably consider it appropriate for such important offices. Similarly in respect of the office of trustee the condition imposed by r. 36 (b) cannot be said to be unreasonable. (at p403)

The other offices covered by rr. 5 (c) and 36 (b) are, of course, quite different in nature. Branch conference and national council have important functions to perform but both are large bodies. To exclude participation of the shorter-term members who form the majority in the branch from participation in such bodies is, in my opinion, as indicated above, unreasonable and oppressive.

Conclusion as to contravention by a "rule or part of a rule". (at p403)

Accordingly, I am satisfied that, in so far as r. 5 (c) (ii) specifies, as a condition upon membership of delegates to conference, that part of the condition expressed in the words "for not less than two years" it imposes restrictions and conditions upon members which, having regard to the objects of the Act and the purposes of registration of organizations thereunder, are oppressive and unreasonable. (at p403)

Similarly I am satisfied that r. 36 (b), so far as it provides that no member shall be eligible to stand for election to the position of divisional delegate to conference and branch delegate to national council unless he has been a financial member of the union for two years immediately preceding the close of nominations imposes conditions and restrictions which, having regard to the objects of the Act and the purpose of registration of organizations thereunder, are oppressive and unreasonable. Accordingly, orders should be made declaring that such rules to the extent mentioned contravene the provisions of s. 140 (1); that is to say that part of r. 5 (c) (ii) which requires that candidates for election as division delegates to branch conference must have been financial members for not less than two years immediately preceding the close of nominations for such election, and that part of r. 36 (b) which provides that a member is not eligible to stand for election to the position of division delegate to branch conference (or of branch delegate to national council) unless he has been a financial member of the union for two years immediately preceding the close of nominations for such election. (at p404)

There is no difficulty about this in relation to r.5 (c) (ii) because the part of that rule which contravenes s. 140 (1) is contained in expressions which are physically distinct from the other provisions of the rule and are severable in point of subject matter. With respect to r. 36 (b) however, the critical part of the provision of that rule which is invalid is contained in the expression "any position". In that one expression is comprehended a reference to a number of different offices and it is only in respect of what the rule says concerning elections to some of those offices that there is an invalidity. In my view, however, the authority conferred on the court by sub-s. (5) of s. 140 to declare that the whole or part of a rule contravenes sub-s. (1) extends to a declaration that part of a rule contravenes the section, not only where the contravening provision is contained in separate words which may be struck out, but also where the provision which contravenes sub-s. (1) is wrapped up in a single expression operating to enact, at the same time, not only the provision which contravenes but also provisions about distinct matters which may not contravene the section. In such a case merely to strike out words would be to destroy more of the rule than is desired or required or may be justified. (at p404)

Subsection (5) of s. 140, is, in my opinion, intended to operate upon the substance of provisions in rules and is not dependent upon modes of expression or upon the division of a rule into separately numbered parts or otherwise expressed in distinct expressions each dealing with one segment of a subject. (at p404)

In this case the expression "any position" is a convenient way of indicating that the operation of the rule is to extend to elections for each of the offices set out in r. 36 (a) as though the same were severally referred to and set out seriatim in r. 36 (b). Accordingly, in my opinion, declarations and orders as indicated above are authorized by s. 140 (5). Reference may be made to Thornton v. Mackay (1946) 56 CAR 561 , at p 591 ; Bowden v. Australian Workers' Union (1946) 56 CAR 530 , at p 531 ; and Re Federated Ironworkers Association of Australia (1947) 59 CAR 271 , at p 275 .

Requirement of continuity in financial membership. (at p405)

It was argued on behalf of the claimant that the rules in question contravene s. 140 on the separate ground that a candidate for office is required thereby to have been continuously financial for the two years immediately preceding the close of nominations. It was pointed out that the rules provide for members' contributions to be paid by two separate methods, first payment by the member at the association office or to an organizer and secondly payments made by the employer of a member from deductions made from his wages. Branch r. 30 (c) provides that so long as deductions continue to be made on his or her behalf a member shall be deemed to be a financial member of the association for all purposes of the rules. About ninety-five per cent of members are said to have their contributions deducted and paid by their employers. However there is a risk that through changes in an employer's policy a member may unwittingly fall into arrears. Also, in between periods of employment a member may not realize the necessity to attend to the matter himself and could easily fall into arrears. And other circumstances such as periods of illness or lengthy holidays could cause a member to fall into arrears. But not all employers make deductions from wages and pay union contributions. And it is apparent that members who have to make payments to the association office or to organizers are at a distinct disadvantage. Some of the members are mobile and are seldom, if ever, contacted by an organizer. Some not mobile are also seldom visited by an organizer. To make payments at the association office is inconvenient for many members especially country members. Many ordinary members are not efficient in business practices such as the use of bank accounts and postal services. In this case there is evidence that quite keen union members have, for lack of convenient facilities, fallen seriously into arrears. In respect of this section of the membership the risk of being unfinancial for a short period appears to be a major one.

And of course it is common for most ordinary people to overlook payments they should make. It is said to be oppressive and unreasonable that a member perhaps of many years' financial membership should be debarred from standing for office on the rare occasions available in the association through such a failure, possibly quite accidental, and of a short duration, perhaps almost two years earlier when he was unfinancial. (at p405)

It was recognized that a candidate for office should be a financial member at the time of nomination but it was urged that the mere fact that a member may have been unfinancial for a short time in the not so recent past is little guide to his fitness to stand for office. To my mind, in respect of offices such as delegate to conference or national council there is much force in this. However, it is unnecessary to pursue this matter for the purposes of this case.

V No. 5 of 1977. (at p406)

These proceedings were commenced by rule nisi made on 22nd March, 1977. Therein Elizabeth Leveridge seeks orders pursuant to s. 141 of the Conciliation and Arbitration Act against Mr. Maher who is the secretary-treasurer of the Victorian branch of the Shop Distributive and Allied Employees' Association and the members of the State council of the branch giving directions for the performance and observance by them of the rules of the association by recognizing her as a member of the Victorian branch of the association and by recognizing her entitlement, in accordance with the rules, to vote and nominate for office in ballots of the Victorian branch. (at p406)

She also seeks such further order or orders, interim or final as the nature of the case may require, upon the grounds set forth in the affidavit of her solicitor of 21st March, 1977. According to that affidavit it is clear that the claimant seeks recognition of her claim to have been entitled under the rules to be a candidate qualified to nominate in the elections for metropolitan division delegate to branch conference and branch delegate to national council, nominations for which closed on 4th March, 1977. (at p406)

The fact is that she did nominate as a candidate for such elections but her nominations were rejected on the ground that the records of the association did not show that she was a member of the Victorian branch. It is proper, therefore, to regard the relief she seeks as including an order that the respondents recognize her as a member as from 4th March, 1977. Her entitlement to be a candidate depended not only on her being a member of the Victorian Branch at the relevant date but on the rules of that branch including rr. 5 (c) (ii) and 36 (b) referred to in the proceedings V No. 4 of 1977 which are discussed above. There is no suggestion that the respondents themselves would not recognize the claimant as a candidate if she were a member and qualified under the rules to be a candidate. Nor would they not recognize her as a member of the branch if it were clear that she is entitled to membership. These proceedings are convenient to test that question which in the circumstances is quite important to the claimant and the branch. (at p406)

The claimant first became a member of the association in October 1975. If rr. 5 (c) (ii) and 36 (b) were valid rules of the Victorian branch on 4th March, 1977, then the claimant had no entitlement to nominate even if she were then a member of the branch. If, therefore, the claimant were a member of the branch on 4th March, 1977, her entitlement to nominate depends upon her showing that the rules in question were void on 4th March, 1977.

Factual basis of alleged Victorian branch membership. (at p407)

The claimant's claim that she was a member of the Victorian branch of the association as at 4th March, 1977, arises as follows. She first became a member of the New South Wales branch of the association in October 1975 whilst employed in Canberra as a shop assistant by David Jones (Canberra). As there is no branch of the association in the Australian Capital Territory applicants for membership of the association who work in that Territory become members of the New South Wales branch. Some time after commencing work with David Jones (Canberra) she worked as a shop assistant with Williams the Shoeman (Canberra). In January 1977 she and her husband then took up residence in Victoria. On 14th February, 1977, she commenced employment with Williams the Shoeman (Northland) in Melbourne as a shop assistant. On 1st March, 1977, she attended the office of the Victorian branch. She spoke to one Miss Black, told her that she had transferred from Williams the Shoeman in Canberra to Williams the Shoeman at Northland in Melbourne and that she desired to be a member of the Victorian branch. Miss Black was authorized to receive this kind of communication. She appears to have taken the view that the claimant should "join" the union and do so through her employer. She was unwilling to enrol the claimant as a member in any other manner and gave her a payroll deduction card and a form of application to join the branch. And the probability is that the claimant was also under the impression that the transaction involved something in the nature of "joining" the branch. It appears that Williams the Shoeman at Northland was unwilling to take any action to assist the claimant to join the union and no such action was taken. Williams the Shoeman actually attempted to discourage the claimant from joining the union. At the time of her conversation with Miss Black the claimant was in possession of a letter dated 7th January, 1977, from Mr. O'Neill, the New South Wales branch secretary of the union, to the following effect:

"Memo To: Anne Sullivan From: B. W. O'Neill Date: 7th January, 1977. Re: E. LEVERIDGE

I acknowledge receipt of your telex of yesterday and advise that it is not possible to make Leveridge eligible to vote in the current elections as she was not on the roll submitted to the electoral officer because she was unfinancial for a short period prior to 31st December, 1976.

In respect to the clearance, whilst there is no provision in the branch rules for a clearance, this letter will indicate that she is now a financial member of the New South Wales branch having paid her arrears and is financial to 3rd June, 1977. Please supply a copy of this letter to the member so that she can take it to the Victorian branch office at 17 Anthony Street, Melbourne.

(Signed)

B. W. O'Neill, Secretary." (at p408)

The addressee Anne Sullivan was then an organizer of the New South Wales branch of the association in the Australian Capital Territory. (at p408)

The claimant did not produce this letter to Miss Black or inform her of its existence. She said that she failed to do this because of the refusal of Miss Black to consider the matter on any basis other than that the claimant would have to join the association through her employer. (at p408)

On 3rd March one M. P. Alexander called at the office of the Victorian branch. He had a conversation with Mr. Brian Maher, the branch secretary. He had in his possession and produced a photostat of an application for membership form filled in and signed by the claimant. He showed this to the secretary who said it was not sufficient. Mr. Alexander left the photostat in the foyer of the branch office. On 4th March Mr. Alexander returned to the branch office with a written authority to pay appropriate union contributions on the claimant's behalf. He informed the secretary of this and stated that he was there to pay the claimant's fees for joining the association. The secretary would not accept the application of the claimant and said the matter would have to be dealt with through the proper channels. The secretary said that he wished to ensure that the claimant really worked for Williams the Shoeman and that he would get an organizer to go there the next day. There were no subsequent communications between the claimant and the respondents or the association branch until these proceedings were commenced. When served with the relevant documents in these proceedings the respondents received knowledge of the existence of the "clearance" of the New South Wales branch, namely Mr. O'Neill's telex of 7th January, 1977.

Arguments for and against branch membership. (at p408)

In these circumstances Mr. Handley argued that the claimant acquired membership of the Victorian branch before 4th March, 1977. This, he said, was the result of (a) the claimant being a financial member of the association enrolled in the New South Wales branch who had already paid contributions making her financial in the New South Wales branch until 3rd June, 1977, together with her change of residence and place of employment from the Australian Capital Territory to Victoria; or (b) her change of residence and place of employment together with the fact that she had informed the branch that she was a New South Wales branch member who had transferred to Victoria and was working in the industry and sought to join the Victorian branch and to pay the fees appropriate thereto; or (c) the matters referred to in (a) and (b) in the light of the fact that the clearance was in existence. (at p409)

Mr. Handley relied upon various federal and branch rules, including federal rr. 36 (a) and (b) and 27 (2). Rule 36 (a) and (b) provides:

36(a)

"Members, throughout the Commonwealth of Australia shall be enrolled into the association through branches. There shall be one branch in each State excepting in the State of New South Wales, where in the County of Yancowinna (Broken Hill) and County of Northumberland, Parish of Stockton and the Shire of Port Stephens (Newcastle-Northern branch) separate branches may be formed.

Provided that any two (2) branches may amalgamate to form one (1) branch but national council shall first give authority for such amalgamation.

(b)

Branches shall consist of members employed in the area where branches are formed." (at p409)

Rule 27 (2) provides:

"Any member who leaves the industry or moves into another branch area may request a clearance from his branch. Upon such request the branch shall issue such clearance provided such member has paid all monies owing and is financial on the books of the branch." (at p409)

Mr. Handley submitted that by virtue of r. 36 a duty was impliedly imposed upon a branch to enrol a member of another branch on her becoming employed in an area in respect of which that branch was formed. He said that the operation of the receiving branch accommodating the transferring member was purely ministerial and in the case of a member of the association the duty of enrolment arose as soon as the facts arose by virtue of which the member became of the class of member of which that branch is said to consist. The operation of enrolment in such a case is not part of the process of a non-member of the association acquiring membership thereof through an appropriate branch. It is an operation of enrolling as a member of the association in the Victorian branch a person already a member of the association. There is no express provision in the rules of the Victorian branch as to the conditions on which such enrolment shall take place. The rules are silent on the subject and make no provision whatsoever for any such enrolment. (at p409)

In relation to this problem further rules should be noted. Branch r. 3 (k) provides that one of the objects of the branch is to be the Victorian branch of the Shop Distributive and Allied Employees Association. Federal r. 5 provides that any person desirous of becoming a member of the association shall do so through the branch covering the area in which he or she works. Membership of a branch shall automatically ensure membership of the association. Federal r. 18 imposes on the national secretary-treasurer the duty to ensure that a proper register of members is kept. Federal r. 25 (a) provides that:

"Any member failing to pay his contribution, and/or fines, and/or levies, imposed under the rules of his branch within the time allowed by those rules of becoming due, shall be deemed to be unfinancial and shall remain unfinancial until all monies owing by such member have been paid and shall be liable to be sued in any court of competent jurisdiction for all or any of the amount owing".

Federal r. 25 (c) provides:

"An unfinancial member shall not be entitled to the benefits and privileges of the association or to vote on any question at any meeting of the association or on any ballot taken, nor shall an unfinancial member have any claim whatsoever on any of the funds of the union whilst such member remains unfinancial".

Federal r. 27 (1) (a) provides:

"A member may resign his membership of the branch by notice in writing if:

(i)

being a member of the branch, he accepts employment in an industry other than the industry in connection with which the branch is registered; or

(ii)

the notice is given not less than three months before the resignation is to take effect and any requirements of these rules as to payment of dues to the date on which the resignation is to take effect".

Federal r. 27 (2) provides:

"Any member who leaves the industry or moves into another branch area may request a clearance from his branch.

Upon such request the branch shall issue such clearance provided such member has paid all monies owing and is financial on the books of the branch".

Federal r. 30 provides:

"PURGING OF REGISTER. Branches may from time to time purge their respective register but this purging shall not exempt any such purged member from the payment of any monies owing by him to the branch".

Federal r. 29 provides that branches shall keep a register of the names and addresses, so far as they are known, of the members in their respective areas at the registered office of the branch and that the national secretary-treasurer if he so desires may also keep such register at the registered office of the association. Federal r. 37 (a) and (c) provides:

"(a)

Each branch of the association shall have full autonomy and representation and control of the industrial interests of members of the association in their respective States or areas."

"(c)

Each branch of the association shall have power to make and/or alter and/or amend and/or rescind rules for the proper conduct of their branch. Such rules and/or alterations and/or amendments and/or rescissions shall not conflict with the rules of the association. They shall lodge with the national secretary-treasurer any such rules and/or alterations and/or amendments and/or rescissions for certification." (at p410)

Branch r. 24 provides that a member may resign his membership of the organization by notice in writing to the secretary-treasurer if he goes to another industry or by giving three months' notice and payment of all dues to the date the resignation is to take effect. Branch r. 25 provides:

(a)

that a financial member leaving the industry and desiring to transfer to another union shall upon application be granted a transfer stating that dues have been paid to date; and

(b)

any member may be transferred to another branch of the Shop Distributive and Allied Employees' Association and the secretary-treasurer shall forward a transfer to the secretary of the branch to which the member desires to transfer, together with the application for membership form made by the member on joining the union.

Branch r. 26 provides that members changing their private or business address shall notify the secretary-treasurer in writing within fourteen days. Branch r. 30 (a) provides that upon being admitted to membership of the union members shall pay the contributions therein set out. Branch r. 30 (d) provides that any member owing more than twelve months' contributions may be removed from the membership roll if State council so directs but such member shall remain liable for all arrears of dues. Branch r. 33 provides that:

"Any member failing to pay his or her contributions, fines and/or levies within three months of the date upon which they become due, shall be deemed to be an unfinancial member. An unfinancial member shall be ineligible to vote on any matter and shall lose all the privileges of membership." (at p411)

It is against the express provisions of the rules and the necessary implications arising therefrom that the validity of Mr. Handley's submissions must be tested. Mr. Powell submitted that those submissions could not be accepted without qualification. He suggested that some formal act on the part of a member of the association transferring from one branch to another other than mere change of residence and commencement of work as a shop assistant was necessary before that member could be said to have acquired the status, rights and duties of a member of a new branch. He rather left it to the court to help the branch by saying what that formal act should be. However it is my conclusion that no such formal act is necessary.

Significance of corporate and federal structure. (at p411)

As an organization registered under the Conciliation and Arbitration Act the association is a legal entity distinct from its branches and its members. That it should have members who are employees in the industry it represents is vital to its entitlement to registration. Its rules provide a method by which it acquires members. As federal r. 5 puts it, the method is that membership of the association is to be sought "through the branch covering the area in which" the applicant works, and as federal r. 36 (a) states, "members throughout the Commonwealth of Australia shall be enrolled into the association through branches". Once membership of the branch is acquired, membership of the association is automatically ensured (federal r. 5 (b)). There is no other way by which membership of the association can be acquired. The existence of branches thus being essential to the existence of the association the rules provide that there shall be at least one branch in each State and that branches shall consist of members employed in the area where branches are formed (branch r. 36 (b)). (at p412)

When a member is accepted by a branch and enrolled therein he has acquired two varieties of membership. First he has become a member of the association. The quality of that membership is derived from the nature of the association as an incorporated entity. Its government is in the hands of its members in accordance with its rules which provide for a national council to manage its affairs (federal r. 7). Secondly, the member concerned has acquired what is called membership of the branch. The quality of that membership derives from acceptance in common with other persons in the same membership of the obligations of branch membership as provided by the branch rules and the consequent entitlement to rights of branch membership as provided therein. The group of persons of whom the branch consists may incur legal liabilities and acquire rights as such and may represent the association in many union affairs but does not have an incorporated personality. (at p412)

Basically, the whole organization of the membership and the distribution of functions and authority under the federal and branch rules is designed to support the existence and functioning of the association as the single entity representing the whole of the membership. Autonomy and authority in branch affairs are conferred on each branch (federal r. 37). But there are aspects of the organizational structure designed for administrative order and efficiency and which the branches must accept. One of these aspects relates to the organization of association membership and the distribution of the association members between the branches. In this respect it seems clear that the rules do not contemplate that there can be a member of the association who is not a member of a branch. Association membership is acquired through a branch, the only kind of resignation provided for is resignation from the branch (federal r. 27) and the purging of membership rolls for financial default is a function of the branch. (at p412)

It is to be inferred from the general thrust of the rules and from federal r. 27 that loss of branch membership involves loss of association membership. At the same time transfer of branch membership from one branch to another is contemplated and authorized (federal r. 27 (2)). Such a transaction involves loss of branch membership from the transferred branch, but loss of association membership is not contemplated. The procedure of transfer, by its very nature, does not involve the transferor in having to seek association membership all over again. There is and must be no gap in association membership, but there has to be a change in branch membership. And this may be achieved quite readily through the operation of federal r. 36 (b) which is clearly one of those administrative provisions essential to the organization of the membership and which it is the duty of the branches to implement. (at p413)

If a member takes up employment outside the area of the branch of which he was theretofore a member then, pursuant to r. 36 (b), he is no longer a member of which that branch "consists". But it is essential to the continuation of his association membership that thereupon he be equipped with membership of the branch in whose area he is employed. And r. 36 (b) by its very terms brings this about. There are no Victorian branch rules specifically dealing with enrolling a transferee. But the problems created by the presence in Victoria of a transferee working in the industry are purely administrative. There is some possible inconvenience but no fundamental difficulty. The inconvenience is that the transferee branch has a member of whose existence and membership it does not necessarily know. But, of course, it will know these things as soon as the new member is discovered by an organizer or makes his or her membership felt by claiming to exercise the rights of a member of the new branch. In the meantime the member will have been liable for all dues payable by members of the Victorian branch in respect of that period and if he falls into arrears will suffer the consequences provided in the branch rules.

Inter-branch financial adjustments on transfer of member. (at p413)

A question arises as to the financial obligations of the member on his being transferred to another branch. The clearance provisions appear to be designed to do no more than to close off financial relations between the member and the branch to which theretofore he belonged. He is liable to that branch for all moneys due at the time of leaving it. Until these are paid he is an unfinancial member in respect not only of his branch membership but also of his association membership. See federal r. 25. Pursuant to that rule it would seem that that status will attach to him notwithstanding his membership of his new branch. Mrs. Leveridge was not unfinancial in her New South Wales branch. As to her obligations to pay contributions to the Victorian branch, that matter would appear to be governed in the first instance by the statement of a branch member's liability in the rules of that branch. Under Victorian rules the member concerned is, having regard to his capacity as a member already admitted to membership of the association, subject to the provisions of r. 30 (a) that "members shall pay contributions as follows". In that part of the rule "members" clearly means "members of the branch". (at p413)

A further question is whether a member such as Mrs. Leveridge who appears to have paid contributions in advance to the New South Wales branch of an amount which would make her a financial member of the association, as a member of that branch, until June 1977, is entitled in Victoria to any credit against her liability under branch r. 30. Equity would suggest that in respect of the proportion of the advance contributions as is referable to the period from 14th February when she took up work in Victoria until the relevant date in June 1977 a credit should be allowed. If, as I think, one should regard the whole operation of transferring from one branch to another as basically an administrative matter it ought to follow that the transferee should not be in the position of being subjected to double payments for any period of membership. There appears to be no provision in the New South Wales branch rules for the member to obtain a refund from that branch in respect of the advance contribution. If, therefore, the member is not to be subjected to double payment it is necessary to imply a term in the rules of the Victorian branch rules read in conjunction with the federal rules that a member in the position of Mrs. Leveridge is entitled to an appropriate credit. In my opinion such an implication does arise. The words of Jordan C.J. in Heimann v. Commonwealth (1938) 38 SR (NSW) 691, at p 695 are in point. He said terms are to be implied only when the matter to which they relate is not covered by the express terms of the contract and ". . . be such that it is clearly necessary to imply the term in order to make the contract operative according to the intention of the parties as indicated by the express terms". This principle has frequently been held in this Court to be applicable in the interpretation of union rules. The matter of adjusting contributions upon transfer from one branch to another of a member who has paid in advance is not expressly dealt with in the rules.

But the express terms of the Victorian rules as to contributions, made with the authority of the federal rules, expressly proceed upon the basis that the contributions payable by a member are contributions referable to a period. It is clear also that such contributions are payable in respect of membership of the association, even if they are also referable to branch membership. The express terms of the rules, federal and branch, certainly do not contemplate that a member shall incur double liability in respect of any period merely because of a transfer and such a notion offends all considerations of fairness. It is reasonably to be inferred from the rules that they disclose an intention that double liability shall not occur. To make this intention operative it is necessary to imply a term to the effect that a transferring member shall carry with him any contribution credit. It follows that there ought to be a provision that the New South Wales branch shall pay the amount of the credit to the Victorian branch. The terms of federal r. 36 (e) which provide that "branches are pledged to support one another financially . . . when requested, if approved by national council" certainly provides the machinery for the solution of this problem in the event of inter-branch difficulties.

Specific relief discussed and deferred. (at p415)

It is probable that Mrs. Leveridge is correct in saying that she has paid to the New South Wales branch sufficient moneys to make her financial there until June 1977. However the actual extent of the credit to which she is entitled in Victoria is not established. Accordingly, I would be satisfied at this stage that she has been a member of the Victorian branch as from 14th February, 1977. But her financial status in that branch remains unestablished. The pronouncement of any particular relief in V No. 5 of 1977 should therefore be deferred pending clarification of that aspect. (at p415)

It should be added that any administrative difficulties in respect of transfers can easily be overcome with that degree of co-operation between branches which the rules contemplate. The Victorian branch has gone far in the direction of eliminating such difficulties by making r. 25 concerning members desiring to transfer from the Victorian branch to some other branch. (at p415)

It is said that if Mrs. Leveridge be found to have been financial as at 4th March, 1977, then having regard to the declaration of this Court in proceedings V No. 4 of 1977 it would follow that she has established an entitlement as at 4th March, 1977, to have been a candidate for election to the position of divisional delegate to branch conference. But two considerations arise, first, whether the declaration of the court in V No. 4 of 1977 made in proceedings commenced by rule nisi dated 15th March, 1977, of itself establishes that the rules therein declared to be in contravention of s. 140 were in contravention of that section as at 4th March, 1977. Secondly, whether it is appropriate to make an order against the respondents under s. 141 of the Act in respect of the recognition by them of the claimant's entitlement to have been a candidate in the election should such entitlement be established. (at p415)

Whether she was so entitled depends upon her having been a financial branch member on that date and upon rr. 5 (c) (ii) and 36 (b) of the branch rules then being invalid to the extent stated in the declaration made in V No. 4 of 1977. It would be one thing to order the respondents to treat the claimant as a branch member of that date, and if so it be, a financial member, but another to direct the respondents to perform and observe the rules by treating her as having been entitled to be a candidate for election on 4th March, 1977. The claimant's entitlement to be a candidate is not a matter depending upon the performance and observance by the respondents of any rules or certainly of any rules which the respondents are unwilling to perform or observe.

V No. 8 of 1977. (at p416)

Nigel Arthur Webster, Frederick James Maddern and Mano Alexakis sought orders pursuant to s. 140 of the Conciliation and Arbitration Act 1904 that rr. 5 (c) (ii) and 36 (b) of the Victorian branch rules of the association contravene s. 140 (1) (c) of the said Act or, alternatively, that pursuant to s. 141 of the Act, the respondent L. J. Abbott perform and observe the rules of the Victorian branch of the Shop Distributive and Allied Employees Association by treating as valid the nominations of each of the claimants for election to the offices of delegate to the national council and metropolitan divisional delegate to branch conference in the branch election at present being conducted by him as returning officer. They sought also such further or other orders as the nature of the case may require upon the grounds set forth in the affidavits of the claimants sworn on 23rd March, 1977. (at p416)

At the hearing the parties addressed themselves to the question as to whether the validity of each of the rules which are the subject of the proceedings might be in question as being in contravention of sub-ss. (1) (a) or (1) (c) of s. 140. We approach the matter on the basis that by reason of par. (iii) of the relief sought it is open to the court to interpret the rule nisi, without amendment, as seeking relief in respect of each rule on the basis that it contravenes the provisions of sub-ss. (1) (a) or (1) (c) of s. 140. (at p416)

During the hearing of these proceedings Mr. Alexakis withdrew therefrom and seeks no order. (at p416)

The order against Mr. Abbott was sought as one to be made in exercise of the jurisdiction of the court conferred by s. 141 (1). But sub-s. (5) of s. 141 clearly provides that no order shall be made under sub-s. (1) that would have the effect of treating as invalid a step taken in an officially-conducted ballot. The elections in question in these proceedings are for the purpose of sub-s. (5) an officially-conducted ballot because they are being conducted pursuant to s. 170 of the Act. (at p416)

As to the relief sought under s. 140, on the grounds appearing in the reasons for judgment in proceedings V No. 4 of 1977 delivered this day, orders should be made in the terms of the orders made therein.

V No. 9 of 1977. (at p416)

In this proceeding brought pursuant to s. 159 of the Conciliation and Arbitration Act 1904 Terence Vincent Moloney alleges that in one of the steps taken in the conduct of an election for the office of metropolitan division delegate to the Victorian branch conference of the association an irregularity has occurred. (at p416)

Nominations for this election closed on 4th March, 1977. On 7th March, 1977, the returning officer notified Mr. Moloney that his nomination as a candidate for such position had been rejected on the ground that he had not been a financial member of the union for the two years immediately preceding the close of nominations. By letter of 11th March the returning officer explained that the records of the union showed that Mr. Moloney had been unfinancial from 1st July, 1975, to 24th May, 1976. He stated also that the time allowed to remedy the defects in the nomination if practicable would expire on 15th March, 1977, at 5 p.m. (at p417)

Mr. Moloney commenced employment as a shop assistant at the Third World Bookshop, Melbourne, on 5th November, 1974, and has been employed there continuously since. On 8th November, 1974, he applied to join the association through the Victorian branch and it would appear that his application was accepted at the following December or January State council meetings. Since making his initial quarterly payment in November 1974 he has paid contributions on a slightly irregular basis to an organizer who called at the bookshop to collect the contributions. However there is no suggestion that on 4th March, 1977, Mr. Moloney had not paid all sums then due and payable. Accordingly, in view of the decision of this Court in V No. 4 of 1977 pronounced this day and the invalidity as at 4th March, 1977, of branch rr. 5 (c) (ii) and 36 (b) to the extent indicated in the reasons for judgment in V No. 10 of 1977, Mr. Moloney was duly qualified to nominate as a candidate in the election for divisional delegate to conference. It was argued on his behalf, however, that he had never been unfinancial. It is due to him and helpful to the branch that this question be considered. (at p417)

Mr. Moloney's contributions were not made per medium of deductions made by his employers. He was one of those association members who depended mainly upon the visits of an organizer in making his contributions. He made his contributions as follows:

(at p417)

Whether Mr. Moloney ever ceased to be a financial member of the association depends on branch r. 30 (a) and (b) and branch r. 33. Mr. Moloney's liability to pay contributions is found in r. 30 in its application to members whose contributions are not paid by their employers out of deductions from the member's wages. As to such members r. 30 (a) provides that upon being admitted to membership members

"shall pay contributions as follows:

(i)

All members working forty hours or more per week (i.e. full-time employees) shall pay $39 per annum.

(ii)

All members working less than forty hours per week (i.e. part-time and casual employees) shall pay as follows: those working less than forty hours per week but not less than ten hours per week shall pay $33.80 per annum; those working less than ten hours per week shall pay $23.40 per annum." (at p418)

Rule 30 (b) provides that contributions "shall be due and payable quarterly on the first day of January, April, July and October in each year. Notwithstanding anything else contained in these rules, any member who by agreement with his employer has his union contributions deducted from his wages shall contribute as follows:

(i)

All members working forty hours or more per week (i.e. full-time employees) shall contribute seventyfive (75) cents per week in the case of weekly deductions or $3.25 per month in the case of monthly deductions.

(ii)

All members working less than forty hours per week (i.e. part-time and casual employees) shall contribute as follows: those working less than forty hourse per week but not less than ten hours per week shall contribute sixty-five (65) cents per week in the case of weekly deductions or $2.82 per month in the case of monthly deductions; those working less than ten hours per week shall contribute forty-five (45) cents per week in the case of weekly deductions or $1.95 per month in the case of monthly deductions." (at p418)

Clearly then the obligation of Mr. Moloney as a full-time employee was to pay contributions of $39 per annum and those contributions were due and payable quarterly on the stated days. (at p418)

Having become a member in December 1974, the first day on which any payment by way of contribution was "due" was 1st January, 1975. A payment of the appropriate quarterly amount having been made in November 1974 liability for the amount due and payable on 1st January, 1975, was thereby discharged. No further payment was "due and payable" until 1st April, 1975. A payment of the appropriate quarterly amount having been made in March 1975 the liability for the April quarterly payment was thereby discharged. No further payment was due until 1st July, 1975. But no further payment was made until 21st August, 1975. Mr. Moloney was accordingly in arrears from 1st July, 1975, until 21st August, 1975. Similarly he was in arrears between 1st October, 1975, and 17th December, 1975, and 1st January, 1976, and 22nd March, 1976, and between 1st April, 1976, and 25th May, 1976. It is another question, however, whether during any of those periods he was a financial member. None of the periods during which he was in arrears extended for three months. Rule 33 provides:

"Any member failing to pay his or her contributions, fines and/or levies within three months of the date upon which they become due, shall be deemed to be an unfinancial member. An unfinancial member shall be ineligible to vote on any matter and shall lose all the privileges of membership".

To my mind the effect of this rule is that for the purposes of the rules a member is not to be considered as unfinancial until he has failed to pay a contribution within three months of the date on which it became due. It is then and only then that he shall be deemed to be an unfinancial member and lose the privileges of membership. (at p419)

I do not think there is any support to be found for the notion that the rules contemplate a category of member who is to be regarded for the purposes of any of its rules as other than a financial member and yet not as an unfinancial member. (at p419)

Accordingly, to say that Mr. Moloney was unfinancial for the period from 1st July, 1975, until 24th May, 1976, was erroneous. Mr. Moloney has never been an unfinancial member. Accordingly, the alleged irregularity in a step in the election for division delegate to conference has been proved and appropriate relief should follow.

V No. 10 of 1977. (at p419)

This is an inquiry instituted by virtue of s. 159 (4) (a) of the Conciliation and Arbitration Act 1904 upon a reference to the court by the industrial registrar of an application by Nigel Arthur Webster for an inquiry into the matter of a claim by him that in a step taken in the 1977 election for the office of delegate to national council and that in a step taken in the 1977 election for the office of metropolitan divisional delegate to the Victorian branch conference of the association an irregularity has occurred. (at p419)

The elections are being conducted by the Commonwealth electoral officer upon the request by the branch pursuant to s. 170 of the Conciliation and Arbitration Act. (at p419)

Nominations for each election closed on 4th March, 1977. Mr. Webster duly nominated as a candidate in each election. However, on 7th March, 1977, the returning officer notified Mr. Webster that his nominations had been rejected on the ground that he had not been a financial member of the association for the two years immediately preceding the close of nominations. By letter of 11th March the returning officer explained that the records of the association showed that Mr. Webster had resigned from the association to be re-enrolled on 30th September, 1976. He stated also that the time allowed to remedy the defect in the nomination if practicable, expired on 15th March, 1977, at 5 p.m. (at p419)

Taking the view that because Mr. Webster's most recent period of membership commenced only in September 1976, he was not eligible to nominate for election to the national council or branch conference, the returning officer acted on the basis that rr. 5 (c) (ii) and 36 (b) were valid. But the information obtained by the returning officer from the association records was incorrect - Mr. Webster has never resigned and in fact, as at 4th March, 1977, he has been a member continuously for more than two years. Nevertheless he could not qualify to nominate if branch rr. 5 (c) (ii) and 36 (b) were valid because he had not been continuously financial during the two years preceding 4th March, 1977. His membership record was as follows. (at p420)

He joined the staff of James McEwan & Co. in October 1973 and signed a deduction authority and membership application on 29th October, 1973. Thereafter contributions were made to the association on his behalf by James McEwan & Co. out of wage deductions until 20th February, 1976. At that stage he ceased employment with James McEwan & Co. and joined Atom Industries Pty. Ltd. From that time until 14th October no contributions were made on his behalf nor were deductions made from his wages although he rejoined James McEwan & Co. on 8th June, 1976. During that period he had made a number of requests to the Victorian branch office for the services of an organizer and completed a new wage deduction authority and even an undated application for membership form. From October 1976, deductions from his wages were made by James McEwan & Co. in respect of his contributions and they were duly paid to the association by James McEwan & Co. until after 4th March. It was apparently in the period between February and October 1976 when no deductions were made or contributions paid that the branch endorsed the branch membership card kept in relation to Mr. Webster with the word "resigned". There would appear to have been no justification for this because mere failure to make contributions, although rendering a member unfinancial, does not operate to terminate membership of the association. Nevertheless it is clear that Mr. Webster had become unfinancial by 14th October, 1976. Accordingly, by reason of rr. 5 (c) (ii) and 36 (b) if valid, Mr. Webster could not claim entitlement to nominate as at 4th March, 1977. If those rules were invalid as at 4th March, 1977, to the extent set forth in the order of the court in proceedings V No. 4 of 1977 his entitlement to nominate was conditional upon him then being a financial member of the association or thereafter becoming financial pursuant to the provisions of s. 133 (1) (c).

However the evidence, such as it is, supports the view that although Mr. Webster was in arrears with his contributions in the middle of 1976 he had paid all outstanding arrears as at 4th March, 1977. In addition, by reason of the fact that for a substantial period extending to 4th March, 1977, deductions did "continue to be made on his behalf", Mr. Webster was at that date deemed to be a financial member of the union for all purposes of the rules. See r. 30 (c). (at p420)

Accordingly, if rr. 5 (c) (ii) and 36 (b) were invalid on 4th March, 1977, Mr. Webster was entitled to nominate and the action of the returning officer in rejecting them was taken in error, although of course understandably so. There can be no doubt that such erroneous action would be an irregularity in a step in each election. Although such action may not be one of the items of conduct specified in the definition of "irregularity" in s. 4 of the Act as being included in the relevant meaning of that expression, it was an action inconsistent with the provisions of the rules as they really were. As such, it was an irregularity within the natural meaning of that word in the relevant context. (at p421)

By reason of the declaration made in V No. 4 of 1977, it is clear that for the purposes of this inquiry, rr. 5 (c) (ii) and 36 (b) are to be treated as invalid at least as from the date of that declaration. But that date and the date of the relevant rules nisi are subsequent to 4th March, 1977. However in accordance with the views expressed in the reasons for judgment in V No. 4 of 1977 it is the duty of the court in this inquiry to ascertain what were the valid rules of the Victorian branch of the association as at 4th March, 1977. This involves consideration of the invalidity of rr. 5 (c) (ii) and 36 (b) of the branch rules as at that date in the light of the provisions of s. 140 (1) of the Act. The facts and circumstances relevant to this question are set out in the reasons for judgment in V No. 4 of 1977. Those facts and circumstances are before this inquiry both because I understand that there is agreement between the relevant parties that they should be and because the court has informed itself thereof pursuant to s. 164 (4) (b) of the Act. For the reasons set forth in the reasons for judgment in V No. 4 of 1977 it is manifest that the rules in question were in contravention of the provisions of s. 140 (1) on 4th March, 1977, to the same extent as they were at the date of the rule nisi in proceedings V No. 4 of 1977 and at the date of judgment therein. Accordingly the rejection of the nomination of Mr. Webster in each of the elections was an irregularity in a step in each election and relief should be granted accordingly. (at p421)

In my view that relief should provide inter alia for the calling of fresh nominations and consequential directions. It should perhaps be mentioned that I do not regard s. 141 (5) as affecting the operation of Pt IX of the Act.

V No. 12 of 1977. (at p421)

In this proceeding Frederick James Maddern alleges that in a step in the procedures so far taken in the conduct of an election for the offices of delegate to national council and metropolitan divisional delegate to the Victorian branch conference of the association for 1977 an irregularity has occurred. (at p421)

Nominations for this election closed on 4th March, 1977. On 7th March, 1977, the returning officer informed Mr. Maddern that his nomination had been rejected on the ground that he had not been a financial member of the union for the two years immediately preceding the close of nominations. By letter of 11th March the returning officer explained that the records of the union showed that Mr. Maddern had been unfinancial for a considerable time and that there was no record of any fees being paid after 30th June, 1975, until 18th February, 1977, when $19.50 was paid. Since then he has paid contributions irregularly. Frequently he was in arrears with his payments but by 4th March, 1977, he had paid all arrears and was a financial member. The last payment was made on 3rd March, 1977, and was for a sum of $67.40. (at p422)

It would appear that the returning officer did not have information of this last payment or of one other payment made on 3rd March, 1977, but the fact is that by his payments on that day all sums for arrears and amounts then due had been paid. (at p422)

It was true that Mr. Maddern had not on 4th March, 1977, been a financial member continuously during the two years preceding 4th March, 1977. However, in view of the reasons for the decision in the proceedings V No. 4 of 1977 pronounced on this day and the invalidity on 4th March, 1977, of branch rr. 5 (c) (ii) and 36 (b) to the extent indicated in the reasons for judgment in proceedings V No. 10 of 1977, Mr. Maddern was on 4th March, 1977, duly qualified to nominate as a candidate in the election for divisional delegate to branch conference and delegate to national council. (at p422)

Accordingly, an irregularity did occur in a step in the conduct of the election and appropriate relief should be granted. (at p422)