WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PRESIDENT

CITATION : 2009 WAIRC 00024

DELIVERED : Friday, 23 January 2009

FILE NO. : PRES 3 OF 2008, PRES 4 OF 2008, PRES 5 OF 2008, PRES 6 OF

  2008

PARTIES Ben Richard Thompson

APPLICANT

-and-

Kevin Noel Reynolds - the Secretary

       FIRST RESPONDENT

-and-

The Construction Forestry Mining and Energy Union of Workers

      SECOND RESPONDENT

-and-

Warwick Gatley AM, the Returning Officer, Western Australian Electoral Commission

THIRD RESPONDENT

PRES 3 OF 2008

-AND-

Brian byron

APPLICANT

-and-

Kevin Noel Reynolds - the Secretary

       FIRST RESPONDENT

-and-

The Construction Forestry Mining and Energy Union of Workers

      SECOND RESPONDENT

-and-

Warwick Gatley AM, the Returning Officer, Western Australian Electoral Commission

      THIRD RESPONDENT

PRES 4 OF 2008

-AND-

SEAN MALCOLM

APPLICANT

-and-

Kevin Noel Reynolds - the Secretary

       FIRST RESPONDENT

-and-

The Construction Forestry Mining and Energy Union of Workers

      SECOND RESPONDENT

-and-

Warwick Gatley AM, the Returning Officer, Western Australian Electoral Commission

      THIRD RESPONDENT

PRES 5 OF 2008

JIM JOSEPH MELLOR

APPLICANT

 -and-

THE CONSTRUCTION FORESTRY MINING & ENERGY UNION OF WORKERS (“CFMEUW”)

       FIRST RESPONDENT

-and-

KEVIN NOEL REYNOLDS - THE SECRETARY, CFMEUW

      SECOND RESPONDENT

-and-

WARWICK MCLEAN GATELY AM - ELECTORAL COMMISSIONER, WESTERN AUSTRALIAN ELECTORAL COMMISSION

      THIRD RESPONDENT

-and-

WAYNE NICHOLSON - RETURNING OFFICER (CFMEUW ELECTIONS), WESTERN AUSTRALIAN ELECTORAL COMMISSION

      FOURTH RESPONDENT

 PRES 6 OF 2008

CatchWords:

Industrial Law (WA) - Section 66 applications in relation to alleged irregularities in connection with election of organisation’s offices – Alleged nominations wrongly rejected – Alleged member wrongly precluded from voting - Order that no further step be taken in election pending hearing and determination of applications - Evidence requires broader inquiry - Coexistent but distinct - State branch of federal organisation and State organisation – Organisations managed and administered ‘as one and the same’.   

Membership fees – Members paid single membership contribution to both State and federal organisations - Payment of membership contributions into a ‘general account’ held by federal organisation – ‘Direct debit’ method of payment encouraged by organisation’s executive not permitted by rules.

Financial membership and eligibility to vote  - “Continuously” financial members and eligibilty to nominate.

Whether irregularities in the conduct of the election – Accuracy of  electoral roll – Basis on which the executive and secretary decided financiality of members – Membership contributions invalidily increased.

Membership under the rules of the organisation discussed – s71 certificate - whether election to proceed – Election to proceed – Minutes of proposed orders required.

Legislation:

Industrial Relations Act 1979 (WA): s7(1), s62, s60(1), s63(1), s63(2), s64B, s64C, s64D, s65, s66(1), s66(2), s66(2)(e), s66(2)(e)(i), s66(2)(f), s66(4), s71, s71(4), s71(5), s71(5)(a)

Workplace Relations Act 1996 (Cth) (the WRA): Schedule 10

Industrial Arbitration (Union Election) Regulations (1980)

Result:

Minutes of proposed orders required

Representation:

Counsel:

Applicants  Mr P G Laskaris (of Counsel), by leave, and with him Mr T Kucera (of Counsel), by leave, and Mr I C Latham (of Counsel), by leave

First Respondent   Mr K J Bonomelli (of Counsel), by leave

Second Respondent Mr R C Kenzie QC (of Counsel), by leave, and with him Mr T J Dixon (of Counsel), by leave

Third Respondent in  Ms N Eagling (of Counsel), by leave, and Mr R Bathurst

PRES 3-5 of 2008 (of Counsel), by leave

Third Respondent and   Ms N Eagling (of Counsel), by leave, and Mr R Bathurst

Fourth Respondent in  (of Counsel), by leave

PRES 6 of 2008

Solicitors:

Applicants  : Leask & Co.

First Respondent : Jeremy Noble Barristers & Solicitors

Second Respondent  : Slater & Gordon Lawyers 

Third Respondent in

 PRES 3-5 of 2008  : State Solicitor for Western Australia

Third Respondent and

 Fourth Respondent in

 PRES 6 of 2008 : State Solicitor for Western Australia

Case(s) referred to in reasons:

Allen v Sideris (1984) 3 FCR 548

Bailey v Krantz (1984) 13 IR 326

BLPPU v CMETU (2001) 81 WAIG 2722

Harken v Dornan (1992) 72 WAIG 1727

Moore v Doyle (1969) 15 FLR 59

Re Bailey; Re Transport Workers Union of Australia (Victorian Branch) (1997) 79 IR 1

Re Carter; Re Federated Clarks Union of Australia, Victorian Branch (No 1) (1989) 32 IR 1

Re Collins; Ex parte Hockings (1989) 167 CLR 522

Stacey v Civil Service Association of Western Australia (Inc.) [2007] WAIRC 568 (2007) 87 WAIG 1229

The Queen v Gray; Ex parte Marsh (1985) 157 CLR 351

Case(s) also cited:

ALAEA [2005] FCA 18, 139 IR 268

Commonwealth of Australia v Verwayen (1990) 170 CLR 394

Craine v Colonial Mutual Fire Insurance Co. Ltd (1920) 28 CLR 305

Finlayson v Carr [1978] 1 NSWLR 657

Forbes v SPSFWA [1998] FCA 1210

Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641

Hansch v Transport Workers’ Union of Australia [2000] FCA 473

Kammins Ballrooms Co. Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850

Krantz v The Federated Clerks’ Union of Australia (1984) 5 FCR 416

Larratt v Bankers and Traders Insurance Co. Ltd (1941) 41 SR (NSW) 215

Leveridge v Shop Distributive and Allied Employees' Association (1977) 17 ALR 145

Lovell v Federated Liquor and Allied Industries Employees' Union of Australia (1978) 22 ALR 704

Prichard Re; Federated Clerks Union of Australia (1985) 12 FCR 66

R v Holmes; Ex parte Public Service Association of New South Wales (1977) 140 CLR 63

Re CWU [1996] IRCA 300

Re Election for Office in Transport Workers Union of Australia, Western Australia Branch (1992) 40 IR 245

Re Elections of Offices In the New South Wales Branch of the Transport Workers' Union of Australia v Re Alleged Irregularities In the Conduct of Those Elections [1990] FCA 43

Re Elliot [1999] FCA 1616

Re FCAIEU; Ex parte Farrow (1976) 27 FLR 430

Re Ivory (1993) 41 FCR 267

Re Keeley; Ex parte Kingham (1995) 1 ICRC 311

Re McJannet; Ex parte Minister for Employment, Training and Industrial Relations (Qld) (1995) 184 CLR 620

Re Stapleton (1983) 50 ALR 293

Re TWUWA (1989) 89 ALR 575

Re Western Australian Principals' Federation [2008] WAIRC 1285

Rennie v Bunn; Bunn v Good [1997] IRCA 102

Robertson v CSA (2003) 83 WAIG 3938

Sharp v Sutton (1996) 73 IR 185

State of Victoria v Sutton (1998) 195 CLR 291

Sutton v Sharp (1994) 1 IRCR 259; 57 IR 102

Sutton v Sharp (No 2) (1995) 62 IR 121

Sutton v Sharp (No 3) [2000] IRCA 1

The Bell Group Ltd (In Liq) v Westpac Banking Corporation (No 9) [2008] WASC 239

Thompson v Palmer (1933) 49 CLR 507

Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

Ward v Williams (1982) 4 IR 78

Williams v Ward (1984) 8 IR 234

Reasons for Decision

RITTER AP:

Introduction

1          The second respondent (the CFMEUW) is an organisation registered under the Industrial Relations Act 1979 (WA) (the Act).  This proceeding is an inquiry, under s66(1) and (2) of the Act, into alleged irregularities in connection with the election for offices in the CFMEUW. 

2          The inquiry commenced as four separate applications.  In PRES 3-5 of 2008 the alleged irregularity was that the nominations of Mr Thompson, Mr Byron and Mr Malcolm for the office of an organiser were wrongly rejected by the Returning Officer.  In PRES 6 of 2008 the alleged irregularity was that Mr Mellor was wrongly not included on the roll of electors.  As there was a commonality or linking of issues in PRES 3-5 and PRES 6, they were consolidated into a single proceeding.

3          Mr Thompson, Mr Byron and Mr Malcolm were part of what was known as the “Renew the CFMEU” team.  Mr Mellor was also a “Renew the CFMEU” team supporter.  That team sought, at the election, to challenge the first respondent (Mr Reynolds) and other people on his “team” who nominated for offices.  Mr Darren Kavanagh, the leader of the “Renew the CFMEU” team, had nominated for the position of secretary.

4          The Construction, Forestry, Mining and Energy Union, Construction and General Division, Western Australian Divisional Branch (the CFMEU) is a State branch of an organisation registered under the Workplace Relations Act 1996 (Cth) (the WRA).  The CFMEU is not associated with the CFMEUW under the Act, although the two organisations have similar membership coverage. 

5          At the time of the commencement of the applications the CFMEU was also due to have an election.  In that election Mr Kavanagh challenged Mr Reynolds for the position of divisional branch secretary and other members of the “Renew the CFMEU” and “Reynolds” teams stood for other offices.  The CFMEU elections took place in November 2008 and the results were declared on 21 November 2008.  The outcome was that Mr Reynolds and members of his team were elected to each contested position.

6          The applicants in PRES 3-6, on 27 November 2008, applied for leave to discontinue their applications.  The applications to discontinue have not as yet been decided.  This is to avoid any jurisdictional complications for the election inquiry which the proceeding has evolved into.

7          Due to evidence which was given, it became apparent that more questions emerged, of possible irregularities, than just those which were within the framework of the four filed applications.  At the time I colloquially referred to the evidence, which will be later described, as opening a “can of worms”.  During the hearing this then became a catch-phrase to describe the emergent issues from that evidence.  As a consequence, the proceedings evolved into a broader election inquiry under s66(2)(e) of the Act.  Each of the parties agreed that it was within the jurisdiction contained in s66(2)(e) of the Act for this to occur.  There were then issues and questions which I settled, with the co-operation of the parties, to provide a sound framework for the future conduct of the inquiry.  These will be later described.

8          At the conclusion of the hearing of the inquiry the primary issues, as later set out, were whether an election should be held at all, given the outcome of the CFMEU election, and if so the basis on which it should be conducted.

The Jurisdictional Background

9          Each of the applications comprising PRES 3-6 were based upon the jurisdiction which the President has under s66(2)(e) of the Act to inquire into any election for an office in an organisation “if it is alleged that there has been an irregularity in connection with that election”.

10       The word “organisation” is defined in s7(1) of the Act to mean an organisation that is registered under Division 4 of Part II.  The CFMEUW is an organisation so registered.  The word “office” is defined in s7(1), of the Act to mean, amongst other things, “an office within the organisation for the filling of which an election is conducted within the organisation”.  The election which PRES 3-5 sought an inquiry into is the election for the offices of “organiser” of the CFMEUW.

11       The “structure” of the CFMEUW is set out in rules 16-22.  Rule 16(3) provides:

“(3) Subject to Rule 17 of these Rules there shall be six (6) Organisers, who shall be elected every four (4) years by and from the financial members of the Union.”

12       As organisers for the CFMEUW are elected, the office of organiser is an “office” in accordance with the definition in s7(1) of the Act.  The election in which Mr Mellor alleged there was an irregularity was the election of all “offices” in the CFMEUW which had been due to take place in 2008.

13       “Irregularity” is defined in s7(1) of the Act as follows:

‘irregularity’, “in relation to an election for an office, includes a breach of the rules of an organisation, and any act, omission, or other means by which the full and free recording of votes, by persons entitled to record votes, and by no other persons, or a correct ascertainment or declaration of the results of the voting is, or is attempted to be, prevented or hindered;”

14       It was not in dispute that what was asserted in PRES 3-6 of 2008 constituted alleged irregularities for the purpose of s66(2)(e) of the Act.

Procedural Background

15       The applications in PRES 3-5 were filed on 11 September 2008.  PRES 6 was filed on 18 September 2008.  Each application was initially programmed to proceed to hearing on an expedited basis so that the then present timetable for the election of organisers and other offices in the CFMEUW could continue as set by the Returning Officer.  That timetable was in accordance with the rules of the CFMEUW and will be later described.  Initially, at directions hearings, orders were made for:

(a) The consolidation of PRES 3, PRES 4 and PRES 5 of 2008 into a single proceeding.  This allowed a single set of documents to be filed and a single hearing to occur.

(b) Notice of the applications and an opportunity to be heard to be provided to each of the 10 people who had nominated for the office of organiser and whose nominations were accepted by the Returning Officer.  (Strictly this was not an order but an informal direction.  None of these people notified any intention to be heard).

(c) The filing and service of affidavits by the parties.

(d) The parties providing written advice to my associate and the other parties as to whether and if so which witnesses who had sworn or affirmed affidavits were required for cross-examination at the hearing.

(e) The filing and service of outlines of submissions.

(f) The third respondent (the Returning Officer) to “not take any further step in [the] conducting of the elections, in accordance with the rules of the second respondent, until the hearing and determination of the proceeding or further order”.

16       The last order has remained in place.

17       On 17 September 2008 Mr Robert Mcjannett filed an application to be joined as a party to the proceeding.  Mr Mcjannett is a member of the CFMEUW and had nominated for the position of assistant secretary.  (He also unsuccessfully stood for the position of assistant secretary in the CFMEU election).  Mr Mcjannett was not a member of either the “Renew the CFMEU” or “Reynolds” teams.  The purpose of his application was to facilitate the making of submissions to try and ensure the timetable for the elections would not be disturbed.  In his application Mr Mcjannett set out the reasons for wanting to make these submissions.  One was Mr Mcjannett’s nomination as assistant secretary.  The other reasons do not need to be here mentioned.  The application of Mr Mcjannett was brought before me on 22 September 2008 and adjourned to the first day of the substantive hearing.  It was later dismissed at a directions hearing on 5 December 2008.

18       Of the respondents, only the CFMEUW filed a notice of answer and counter-proposal in PRES 3-5 of 2008.  The position of Mr Reynolds and the Returning Officer was that they would simply abide by the decision of the Commission.  The CFMEUW’s notice of answer and counter-proposal attached relevant documents and said that “it would appear that the [relevant applicant] had not been continuously financial during the period 4 September 2007 and 4 September 2008, as required by rule 23(1)”.  This position was initially maintained by the CFMEUW at the hearing; that is, each of the applicants in PRES 3-5 had not been entitled to nominate because of their lack of the financial status as required by the rules of the CFMEUW.  It softened however after the application to discontinue was filed.  With respect to PRES 6, the CFMEUW did not file a notice of answer and counter-proposal.  Its position however, as set out in affidavits, was that Mr Mellor was not on the electoral roll as he had not been a financial member.

The Rules of the CFMEUW

19       The rules were attached to an affidavit of Mr Ian Botterill sworn on 19 September 2008.  Mr Botterill was appointed by Mr Gately, the third respondent in Pres 3 of 2008, to be the “Substitute Returning Officer” for the election.

20       Rule 1 provides:

“1 - NAME

The Union is an organisation of employees which shall be known as “The Construction, Forestry, Mining and Energy Union of Workers” (“the Union”).”

21       Rule 3 sets out the objects of the CFMEUW.  Objects 3(1), (8), (13) and (15) all provide for things to be done for the benefit of “members”.  Rule 3(18) provides for the following object:

“3 - OBJECTS

The objects for which the Union is established are, by the provision and distribution of funds, and by all other lawful means:-

…

(18) To affiliate with, amalgamate with, co-operate with, or assist any person or body which has any object similar to any of the objects of the Union, including obtaining certificates or entering into agreements pursuant to section 71 of the Industrial Relations Act (WA) 1979 as amended or like provisions, making applications pursuant to the provisions of section 72A of the Industrial Relations Act (WA) 1979 as amended or like provisions and entering into agreements with organisations registered pursuant to Commonwealth Industrial Relations legislation.”

22       This object has not been acted upon.  Evidence about this will later be described.

23       Rules 4-9 appear under the heading “Membership”.  Rule 4 deals with “Eligibility for Membership”.  In general terms the rule specifies the type of employment that members are to be engaged in.  Rule 5 obliges members to register a postal address with the CFMEUW.  Rule 6 provides for a register of members to be kept by the secretary.  This says:

“6 - REGISTER OF MEMBERS

A Register of Members shall be kept by the Secretary.  The Register shall show the names and addresses of all members, the date of joining the Union and of resignation or demise, or the date when he or she otherwise ceased to be a member of the Union, and all entrance fees, contributions, levies and fines and all other fees paid into and benefits received from the funds of the Union by all members.  The Register shall be purged on not less than four occasions in each year by striking off the names of members whose membership has ended under Rule 8 of these rules.”

24       Rule 7 provides for members who have been “struck off” to regain membership.  To do so they must pay an entrance fee of all of their “arrears” when they were “struck off”.  Rule 8 is about the termination of membership.  Relevantly, with respect to the financial position of a member, rules 8(2) and (3) provide:

“(2) Where a member’s subscription has expired and has not been renewed, on expiration of a period of three months, the membership is terminated but the member shall be responsible for any subscriptions, fees, levies or fines owing up to and including the date of termination of membership.

(3) Notice of resignation does not relieve a member from liability for any fees, contributions, levies or fines which may become payable during the notice period.”  (Notice of resignation is referred to in rule 8(1)).

25       Rule 9 provides for a “clearance card”, signed by the secretary, to be provided to a member who is “working in another industry or leaving the Union”.  Rules 10-15 of the rules are under the heading “Finance”.  Rule 10 provides for entrance fees and contributions.  Rule 10(1)-(5) are about applications by and the admission of candidates to become members.  Rule 10(6)-(10) provide for contributions and other payments to be made by the members.  Rule 10 is as follows:

“10 - ENTRANCE FEES AND CONTRIBUTIONS

(1) A candidate for membership of the Union shall forward or cause to be forwarded to the Secretary of the Union the entrance fee together with an application on the form prescribed for that purpose in the Schedule hereto stating the full name and address of the candidate and bearing the signature of the candidate and that of a witness to the candidate's signature.

(2) The entrance fee to the Union payable by all applicants shall be not less than twenty dollars ($20.00) or such other sum as determined by the Executive.

(3) Subject to subrule (4) of this Rule, upon receipt by the Secretary of the application and entrance fee he or she shall sign and date the application and the candidate shall be deemed to be a member of the Union as from the date of receipt of such application and entrance fee by the Secretary and shall be liable from that date for payment of the contributions, levies, fines and fees payable by members of the Union (subject to the exceptions contained in these Rules).

(4) Notwithstanding anything contained in these Rules the Secretary shall have, and is hereby given, the power to refer any application for membership to the Executive for consideration and decision, in which case the candidate shall not become a member until notified to that effect in writing by the Secretary.

(5) Should the Executive decide against the admission of the candidate the candidate shall have the right of appeal to the following General Meeting of the Union which shall have the power to grant or reject the application or to defer it until the next succeeding General Meeting for final decision.  The date of such decision of the General Meeting, where favourable to the candidate, shall be deemed to be the date of his or her admission to membership of the Union.

(6) Every member shall pay such contributions, fines, fees and levies as may be prescribed by the Rules for the time being of the Union.

(7) Upon payment of the contributions, fees and any fines or levies that have been imposed a member shall receive a half-yearly ticket.  A new member shall receive a copy of these Rules on request.

(8) Any member losing his or her ticket shall, upon application to the Secretary and on payment of five dollars ($5.00) be granted a duplicate ticket.

(9) (a) Contributions shall be payable half yearly in advance in March and September of each year.  The Executive shall decide as at the date of the amalgamation the amount of contributions to be paid until July of the next year, and thereafter the Executive shall decide each year in the month of July the amount of Union contributions to be paid for the following twelve months.  Total annual contributions shall be based on one percent (1%) of the All Industry Groups (Adult Males) Average Weekly Earnings as shown in the Australian Bureau of Statistics, Earnings Indexes or like indicator for June in the preceding year;

(b) Each new member of the Union shall be liable to contribute immediately on admission to membership, his or her contributions, (in addition to the entrance fee) for the unexpired portion of the half-year in which his or her application for membership is made and thereafter shall pay in the same way as existing members PROVIDED THAT any person admitted to membership during the last six weeks of any half-year ending on 31 March or 30 September may at the discretion of the Secretary of the Union be relieved of his or her liability to pay contributions for that half-year;

(c) Any member of the Union not making his or her payment in accordance with this Rule shall be deemed unfinancial and shall lose all privileges of membership and shall be liable to be sued for his or her arrears without notice.  He or she shall not again become a financial member entitled to any privilege of membership until all arrears have been paid.  Any member is entitled, if he or she so desires, to pay for two half-years’ contributions at the same time.  Notwithstanding any provision of this Rule, every member of the Branch who is financial on the day the Returning officer calls for nominations shall be eligible to vote;

(d) All contributions, fines, fees or levies shall be paid by any member to any of the authorised collectors of the Union, (including authorised workplace delegates) or to the Secretary of Union, but to no other person or member.  No receipt shall be valid unless given in or on the form prescribed by the Union.

(10) The Executive shall have power, upon the case being properly presented to it, to cancel the whole or any part of a member’s contributions or arrears caused by unavoidable distress or sickness.”

26       Rule 10(1) refers to the “Schedule” to the rules.  This in the following form:

“THE SCHEDULE

APPLICATION BY CANDIDATE FOR MEMBERSHIP

I ............................................................................................

of ..........................................................................................

HEREBY APPLY to become a member of The Construction, Forestry, Mining and Energy Union of Workers, an Organisation of Employees registered under the Industrial Relations Act (WA) 1979.

DATED the ..... day of ................, 20……

Date of receipt by Secretary: the ..... day of ................,

20……

Signature of Secretary .........................................................

Signature of Applicant .........................................................

Signature of Witness ..........................................................”

27       Rules 11-15 are about the imposition of levies and fines, the property and funds of the union, the financial year, the appointment of an auditor and provision of a financial report.  Rule 12 is:

“12 - PROPERTY AND FUNDS OF THE UNION

Subject to the control of the Union by General Meeting the funds and property of the Union shall be under the control of the Trustees.  They shall be invested in the name of the Union by way of current account or on fixed deposit in the Commonwealth Savings or Trading Bank or such other bank, Building Society, Credit Union or other financial institution, or Government issued securities, or by way of investment in other securities or equities as the Executive may determine and notify to the Secretary.”

28       As stated previously, rules 16-22 are under the heading “Structure”.  Rule 16(1) sets out those officers who comprise the “Executive” of the CFMEUW as being the:

“President, Secretary, two (2) Assistant Secretaries, Senior Vice President, Vice President, Treasurer, two (2) Trustees, and two (2) Ordinary Executive Members who shall be elected every four (4) years by and from the financial members of the Union.”

29       I have already referred to rule 16(3) about the election of organisers.  As to the powers and duties of the executive, rule 16(4)-(8) provides:

“(4) The Secretary, two (2) Assistant Secretaries, the President and Organisers shall be paid such salary as shall be fixed from time to time by a General Meeting.  The Secretary shall be the Principal Officer of the Union.  In the event that an Organiser also holds a position on the Executive he or she shall only be entitled to one salary being the higher salary of the two positions.

(5) The Executive shall meet at least once a fortnight and a quorum shall consist in all cases of five (5) members.

(6) A report of the Executive shall be submitted to each General Meeting of the Union.

(7) In all matters that shall arise between General Meetings of the Union and subject to the control of General Meetings of the Union the Executive shall have the control and conduct of the business of the Union and shall act on its behalf in all matters.  It shall have the daily management of the business of the Union.  It shall be bound to observe the decisions of General Meetings of the Union.

(8) No power shall be delegated to the Executive to cancel any meeting authorised by the members, or to expend any portion of the Union funds other than for administrative expenses and current wages, or to dispose of any property of the Union unless the approval of the Union has been sought and obtained at a General Meeting of the Union.”

30       Rules 23-24 are under the heading “Elections”.  Rules 23(1)-(19), (22), (30), (36) and (37) are relevant and are as follows:

“23 - ELECTION OF EXECUTIVE AND ORGANISERS

(1) All candidates for election to any office shall be financial members of the Union continuously for one year immediately preceding the next closing date for nominations.

(2) No member shall be eligible to hold more than one office on the Executive.

(3) No member shall be eligible to nominate for more than one office on the Executive at any periodical election.

(4) 2004 and every fourth year thereafter shall be known in these Rules as the "election year".

(5) The Executive shall not later than 31 May in each election year, appoint a Returning Officer (who shall not be the holder of any office in, and not be an employee of the Union but who shall have the qualifications for nomination required by subrule (1) of this Rule) for the purpose of conducting the election in accordance with these Rules.

(6) The Returning Officer shall call for nominations by advertising in at least one daily newspaper circulating widely within the State no later than 31 July of each election year.

(7) The date of commencement of the period for lodging nominations shall be 21 August in each election year.  The closing date for nominations shall be at a time and place or in a manner fixed by the Returning Officer and mentioned in the advertisement but the closing date shall be 4 September in each election year.

(8) The Returning Officer shall obtain from the Secretary a list of the persons eligible to vote.

(9) The Returning Officer shall check the list with records at the Union office and shall compile a roll of members eligible to vote, containing the names, addresses and membership number of all such members.

(10) Every member of the Union who is financial on the day on which the Returning Officer calls for nominations shall be eligible to vote.

(11) Nominations must be in writing, signed by the candidate and endorsed by at least two financial members and must be made at the time, place and in the manner mentioned in the advertisement.

(12) The Returning Officer shall have the power in accordance with these Rules to accept or reject such nominations; provided that if the Returning Officer rejects any nomination the following provisions shall have effect:

(a) The Returning Officer shall notify the person concerned of the defect in the nomination; and

(b) The Returning Officer shall where it is practicable to do so, give the person concerned the opportunity if possible of remedying the defect within not less than seven (7) days of notification; and

(c) If the person concerned within such period is able to and does in fact remedy the defect in the nomination in accordance with these Rules, the Returning Officer shall thereupon accept such nomination.

(13) Where after the closing of nominations there is only one valid nomination for a single office or only sufficient valid nominations for multiple offices, the Returning Officer shall declare such nominee or nominees duly elected to the office or offices concerned at the General Meeting referred to in subrule (36) of this Rule.

(14) Where after the closing of nominations there is no valid nomination for a single office or insufficient valid nominations for multiple offices, the Returning Officer shall report the fact to the Union which shall declare that an extraordinary vacancy or vacancies exist in that office or offices and shall treat such vacancy or vacancies as a casual vacancy or vacancies pursuant to Rule 24 of these Rules.

(15) Where after the closing of nominations there are more candidates than the number required for any office, the Returning Officer shall place the candidates' names on the ballot paper.  The order in which names are to appear on the ballot paper shall be drawn by the Returning Officer in the presence of two (2) Trustees of the Union.

(16) The Returning Officer shall order the printing of sufficient ballot papers for the purpose of the election, and if practicable, shall be present during the printing of all such ballot papers.  Ballot papers shall be printed showing the full names of the Candidates for the respective offices and such ballot papers shall contain voting instructions.

(17) The Returning Officer shall obtain all such ballot papers with a certified statement of the number of ballot papers printed.  Each ballot paper shall be initialled by the Returning Officer before distribution.  All ballot papers shall be printed on watermark paper and the Returning Officer shall be responsible for ensuring that every ballot paper is properly watermarked before being forwarded to the member.  On a count of ballot papers, only those which bear the watermark and the initials of the Returning Officer shall be counted.

(18) The Returning Officer shall fix dates when the ballot shall open and close.  The period between the opening and closing date of the ballot shall not be less than twenty-one (21) days nor more than twenty-eight (28) days and the count of ballot papers shall be completed not later than 30 October in each election year.

(19) The Returning Officer shall forward by pre-paid post to each financial member so as to reach such member not less than fourteen (14) days before the closing of the ballot, a ballot paper and other ballot material in a sealed envelope and provide for the return of the ballot paper without expense to the member.

…

(22) The Returning Officer shall as soon as practicable after the closing of the ballot, collect the ballot box and convey the ballot box to an office selected by the Returning Officer, open the box, collect the ballot papers and proceed to count the ballot papers until the ballot is finished.

…

(30) Subject to the provisions of the Industrial Relations Act (WA) 1979 and the Industrial Arbitration (Union Election) Regulations, 1980 the decision of the Returning Officer shall be final.

(36) The Returning Officer shall declare the result of the election at a General Meeting of the Union to be called not more than twenty-one (21) days after the count is completed.  At the General Meeting the Returning Officer shall provide a report of the election to the General Meeting and such report shall show the number of votes cast for each candidate, the number of informal votes and the number of ballot papers issued but not returned up until the time the ballot closed.

(37) The members of Executive and organisers declared elected unopposed by the Returning Officer, or declared elected pursuant to subrule (13) of this Rule, shall assume office on the first day after the declaration of the result of the election.”

31       Last year was an “election year” under rule 23(4).  Additionally because of the order I made, in accordance with s66(2)(e), (f) and s66(4) of the Act, and set out earlier, the election has not been able to take place by the date provided for in the rules.

32       The basis upon which Mr Thompson, Mr Byron and Mr Malcolm were said not to be entitled to nominate was because they did not meet the requirements of rule 23(1).

33       Rule 25 sets out the “Duties of Executive and Organisers”.  Relevantly rule 25(2) says of the secretary:

“(2) Secretary

The Secretary, who shall be the Principal Officer of the Union, shall:

(a) attend all meetings of the Union and prepare documents for Union and executive meetings and for the Auditor and Trustees;

(b) conduct and file all correspondence and summon members to all meetings;

(c) issue all summonses and keep all documents and accounts, books and papers belonging to the Union;

(d) submit to the President any urgent information he or she may officially receive and the President, together with the Secretary, shall decide on the best course to be pursued until the next meeting of the Executive;

(e) keep a register of the names and addresses of the officers and members of the Union;

(f) in conjunction with any one of the Trustees sign all cheques;

(g) the Secretary may sue or be sued on behalf of the Union;

(h) the Secretary shall be the principal spokesperson for the Union.”

34       Rule 25(3)(b), (c) and (d) and 25(5) says, about the treasurer and trustees:

“(3) Treasurer

The Treasurer shall:

…

(b) receive all moneys and pay the them into the bank account of the Union immediately, with the exception of petty cash not exceeding five hundred dollars ($500.00) at any one time;

(c) keep a distinct and intelligible account of all moneys received and expended, with vouchers detailed therefore;

(d) submit a statement of his or her receipts and expenditure every three months to the members of the Union attending a General Meeting;

…

(5) Trustees

Any one of the Trustees shall sign all cheques in conjunction with the Secretary.”

35       Rules 26 and 27 are about “Meetings”.  Rule 26(1) relevantly provides:

“26 – GENERAL MEETINGS

“(1) The Union shall hold General Meetings for the transaction of business on the second Wednesday of each calendar month at such time and place as the Executive or the Secretary may fix.  The days on which such General Meetings are held may be varied by the Executive or the Secretary, provided that the Union shall hold a General Meeting at least once each calendar month.  Where such variation is made a notice of the time and place of the meeting shall be given.  Members may be notified of the varied time of the General Meeting by notice given:-

(a) In any newspaper circulated widely in the State;

(b) In any journal issued by the Union;

(c) To workplace delegates at addresses for notices kept at the office of the Union;

(d) By letter, circular, telegram or written notice to the members;

(e) By telephone; or

(f) By any one or more of the above means.”

36       Rule 26(6) provides that a quorum for “Any Special General or Ordinary General meeting” is 30 members.

37       Rule 27 sets out the procedure at general meetings.  Rule 27(1)(a) says that the first thing in the “order of business” is the reading of the minutes of the “previous General Meeting”.  I mention this as it implies that minutes of the general meetings will be kept.  Under the heading “Miscellaneous”, rule 31 provides:

“31 - RETURNS TO REGISTRAR

The Secretary shall annually furnish the Registrar of the Industrial Relations Commission with the duly audited statement of receipts and expenditure and balance sheet of the assets and liabilities of the Union, together with such other information required to be submitted to the Registrar, in accordance with the Industrial Relations Act (WA) 1979 as amended.”

38       There are no other rules relevant to the proceeding.

Affidavits

39       The following affidavits were filed on behalf of the applicants:

(a) Mr Thompson dated 16 September 2008.

(b) Mr Byron dated 16 September 2008.

(c) Mr Malcolm dated 16 September 2008.

(d) Mr Mellor dated 21 September 2008.

(e) Mr Douglas Heath, builders labourer and “Kavanagh team” member, dated 22 September 2008.

40       The following affidavits were filed on behalf of the third and fourth respondent:

(a) Mr Botterill dated 19 September 2008.

(b) Mr Botterill dated 23 September 2008.

(c) Mr John Spurling, Registrar of the Commission, dated 23 September 2008.

(d) Ms Susan Bastian, Deputy Registrar of the Commission, dated 23 September 2008.

41       The following affidavits were filed on behalf of the CFMEUW in what has become the consolidated proceeding:

(a) Ms Peta Arnold, office manager of the CFMEU/CFMEUW, dated 22 September 2008 (Ms Arnold’s first affidavit).

(b) Ms Arnold dated 22 September 2008 (Ms Arnold’s second affidavit).

(c) Ms Arnold dated 23 September 2008 (Ms Arnold’s third affidavit).

(d) Ms Arnold dated 24 September 2008 (Ms Arnold’s fourth affidavit).

(e) Ms Amanda Dunn, CFMEU/CFMEUW receptionist, dated 23 September 2008.

(f) Mr Reynolds dated 20 October 2008.

The Course of the Proceedings

42       The substantive hearing of the inquiry commenced on 25 September 2008.  Counsel for Mr Thompson, Mr Byron and Mr Malcolm made an opening submission.  Mr Thompson and Mr Byron then gave their evidence and were cross-examined.

43       Ms Arnold was then interposed because Mr Malcolm was unavailable to give evidence until later that day.  Ms Arnold completed her evidence in chief and was part way through being cross-examined when Mr Malcolm then became  available and gave evidence.  It was during the evidence of Ms Arnold given on that day that the “can of worms” was opened. 

44       By the end of 25 September 2008 I decided that contrary to what had previously been contemplated, the hearing and determination of what was then separately PRES 3-5 of 2008 and PRES 6 of 2008 could not take place by 30 September 2008, so as to enable the then-existing election timetable to proceed.  Accordingly it was decided that on the following day Ms Arnold would complete her evidence and then evidence would be given by Ms Dunn.  Following that the hearing would be adjourned until 30 September 2008 so that consideration could be given to setting an appropriate framework for and the programming of the broader inquiry.  The hearing proceeded as planned on 26 September 2008.

45       On 30 September 2008, after hearing submissions from the parties, the questions which I had drafted were settled and then formed the framework for the inquiry.  (I will call them the “Inquiry Questions”.  They are later reproduced).  The hearing was then adjourned so additional evidence could be brought before the Commission.  The affidavit of Mr Reynolds was then filed.  It provided, in detail, the response of the CFMEUW to the “can of worms” and Inquiry Questions.

46       On 27 October 2008 the affidavit of Mr Mellor was received as an exhibit and explained by his counsel.  He was not cross-examined.  In addition, other affidavits were received as exhibits and objections to some paragraphs of the affidavit of Mr Reynolds were heard and determined.

47       On 28 October 2008 submissions were made by the CFMEUW that fairness dictated it be provided with the potential irregularities at issue in the inquiry.  I accepted the submission and prepared a draft schedule which was distributed to the parties.  The schedule was finalised on 29 October 2008 after hearing submissions from the parties.  It is later reproduced.

48       Mr Reynolds then commenced giving evidence.  Mr Reynolds’ evidence took the rest of 29 October 2008, all of 30 October 2008 and part of 31 October 2008.  That completed the oral evidence.

49       Mr Latham, one of the counsel for the applicants, then made some preliminary closing submissions about the nature and extent of the jurisdiction of the President under s66 of the Act.  An outline of the submissions was also provided.  Programming orders were then made for the filing of submissions and a further hearing.  That hearing was scheduled to take place  on dates to be fixed in February 2009.

50       After the hearing was adjourned, and upon reflection, I formed the view that it was in the interests of all concerned, including the members of the CFMEUW, that the inquiry be determined more expeditiously.  Accordingly after  hearing from the parties the timetable was adjusted to lead to the hearing of final submissions on 16 December 2008. 

51       In the interim, the outcome of the election of officers in the CFMEU occurred, and Mr Thompson, Mr Byron, Mr Malcolm and Mr Mellor filed their applications for leave to discontinue.  These applications were first heard on 5 December 2008.  As I have said, to avoid any jurisdictional complications, they were stood over until 16 December 2008.  At the same time I revoked the order which had been made requiring the applicants to file written submissions.  I also said they did not need to play an active role at the hearing on 16 December 2008.  One of their counsel did attend, as a matter of courtesy, on that day.

52       Final submissions were filed on behalf of the third and fourth respondents on 26 November 2008.  Final submissions were filed on behalf of the CFMEUW on 11 December 2008.  Mr Reynolds simply adopted the submissions of the CFMEUW.  The hearing of final submissions duly occurred on 16 December 2008.

53       I then reserved my decision.

The Inquiry Questions

54       By corrected order dated 3 October 2008 the broader framework for the inquiry was established by the following orders:

“1. PRES 6 of 2008 be consolidated into the same proceeding as PRES 3-5 of 2008.

2. The proceedings continue on the basis that as part of, or in addition to the applications which have been filed, the following be inquired into by the Commission:-

(1) (a) What, if anything did the executive of the second respondent decide in July of each of 2006, 2007 and 2008 to be the contributions to be paid by the members of the second respondent for the “following 12 months” in accordance with rule 10(9)(a) of the Rules of the second respondent.  (“the Rules”).

(b) What, if anything, did the executive of the second respondent otherwise decide in the years 2006, 2007 and 2008 in relation to the contributions to be paid by members of the second respondent, and what if anything, is the relevance  of this to deciding the financial members of the second respondent.

(2) What was the basis upon which the first respondent decided and declared in returns to the Commission in 2007 and 2008 that the number of members of the second respondent was 7,702 and 8,471 respectively.

(3) The reason why, when, by whom and the basis upon which it was decided that members of the second respondent could pay their contributions by direct debit or in any method other than that described in rule 10(9)(a) of the Rules.

(4) What was the basis upon which the first respondent and/or the second respondent decided who the members, financial members and “financial members of the union continuously for one year” were, for the purposes of rule 10(9)(c), rule 23(1) and rule 23(10) of the Rules, on 23 July 2008 and 4 September 2008.

(5) With respect to the payment by members of the second respondent of any contributions or purported contributions under rule 10(9)(a) of the Rules or otherwise:

(a) Were the contributions deposited into or credited to an account with any financial institution(s).

(b) If the answer to (5)(a) is yes, what was the style and title of the account(s) and the owner of the funds in the account(s).

(c) What impact, if any, do the answers to questions (5)(a) and (5)(b) have in deciding who were and are the members and financial members of the second respondent, and whether a member was entitled to nominate for election in accordance with rule 23 of the Rules.

(6) The basis upon which it should be determined as at 23 July 2008 and/or 4 September 2008:

(a) Who were the members of the second respondent.

(b) Who were the financial members of the second respondent.

(c) Who were the people entitled to nominate for offices in accordance with rule 23 of the Rules.

(7) The proper construction of the Rules with respect to membership, financial membership, eligibility to nominate for offices in elections and eligibility to vote in elections for offices.

(8) What orders should be made, if any, in PRES 3-5 of 2008 and PRES 6 of 2008 to determine the applications or otherwise pursuant to s66(2)(e) and s66(2)(f) of the Industrial Relations Act 1979 (WA).

….”

55       The Inquiry Questions will be given the above numbers, excluding the “2” and the brackets.  For example, was order 2(2), will be referred to as Inquiry Question 2.

Schedule of Possible Irregularities

56       The schedule of possible irregularities which was settled after hearing submissions dated 29 October 2008 is as follows:

“1. In this schedule:

(a) The second respondent in PRES 3 of 2008 is called the “CFMEUW”.

(b) The “rules” are the rules of the CFMEUW lodged with the Commission.

(c) In the quoted rules, the CFMEUW is called “the Union”.

(d) The Construction Forestry Mining and Energy Union, Construction and General Division, Western Australian Division Branch is called the “CFMEU”.

(e) “Member” where appropriate includes any purported member.

(f) “KNR” means the affidavit of Mr Kevin Noel Reynolds, which is exhibit R2F in these proceedings.

(g) The “election” is the 2008 election of the executive and organisers of the CFMEUW.

(h) The Industrial Relations Act 1979 (WA) is called the “the Act”.

(i) The “questions” mean the questions set out in order 3 of the corrected order made on 3 October 2008.

(j) The content of the brackets at the end of the sub-paragraphs of paragraph 4, set out the number of the paragraphs of KNR which give rise, in possible combination with other evidence, to the alleged irregularities.

(k) The “secretary” means the secretary of the CFMEUW.

2. The Commission, constituted by the Acting President, is under s66 of the Act inquiring into alleged irregularities in connection with the election.

3. The alleged irregularities are those set out in the applications filed in PRES 3-6 of 2008, and those which may possibly arise from the questions.

4. Based on the evidence received to date, the possible irregularities arising from the questions are whether there has been in 2007 and 2008 a failure or possible failure to follow these rules and/or sections of the Act:

(a) Rule 10(1), insofar as applications for membership may not be in the form prescribed for that purpose in the schedule to the rules (KNR [59]).

(b) Rule 10(1) insofar as entrances fees and contributions may not have been forwarded to or receipted by the CFMEUW (KNR [59]).

(c) Rule 10(9)(a), in that the executive did not decide in June of 2006, 2007 or 2008 “the amount of Union contributions to be paid until July” of the following year (KNR [80]).

(d) Rule 10(9) and rule 27 insofar as there may have been a failure to decide upon or properly minute or record increases in six monthly membership contributions (KNR [81]-[86]).

(e) Rule 6 and rule 23(2)(e) and/or also s63(1) and s63(2) of the Act insofar as the secretary and the CFMEUW as an organisation may not have kept a register of members in that:

(i) The register did not properly show the details required by rule 6.

(ii) The register did not show all the members or show the date of the cessation of membership, because the register was not kept and maintained by the proper application of the rules of the CFMEUW about membership and the termination of membership in accordance with rules 8 and 10(9)(a)-(c) (KNR [87]-[92], [129]).

(g) Rule 10(9)(a) in that contributions were not made or required to be made half yearly in advance and instead were also solicited and received by way of “direct debit” or “payroll deduction” instalments (KNR [105]-[110]).

(h) With respect to 4(b) it will be relevant to consider:

(i) The bank account into which membership contributions have been deposited.

(ii) Whether that banking of the membership contributions has been:

(aa) Authorised by a General Meeting; and/or

(ab) in accordance with the rules, and in particular rules 10(6) and 10(9).

5. The Inquiry will need to consider:

(a) Whether, for the purposes of rules 10(9)(c), 23(1) and 23(8)-23(10) and having regard to any irregularities that may be established whether:

(i) There are presently, and/or;

(ii) There were as at 23 July 2008, and/or;

(iii) There was as at 4 September 2008:

(aa) any members of the CFMEUW;

(ab) any members of the CFMEUW who are or were financial;

(ac) any members of the CFMEUW who are or were continuously financial; or

(ad) any members of the CFMEUW who are or were eligible to vote in the election.

(b) In particular, question 5(a) will arise if one or more of these irregularities is established:

(i) No membership contributions have been paid to and/or received by the CFMEUW.

(ii) No membership contributions have been set in accordance with rule 10(9).

(iii) Membership contributions have not been paid as “prescribed by the Rules” in accordance with rule 10(6).

(iv) There has been no valid decision made by the CFMEUW under its rules to increase membership contributions, permit a joint application to become a member of the CFMEUW and the CFMEU and to solicit or accept “direct debit” or “payroll deductions” contributions, not in accordance with rule 10(9).”

Background to the Election

57       This information is primarily taken from the affidavits of Mr Botterill.  On 14 May 2008 Mr Reynolds wrote to the Registrar of the Commission requesting the conduct of an election for positions in the CFMEUW.  On the following day a Deputy Registrar of the Commission wrote to Mr Gately to request that the Western Australian Electoral Commission (WAEC) conduct the election pursuant to s69(4) of the Act.  On 9 June 2008 Mr Gately appointed Mr Wayne Nicholson as the Returning Officer for the election.  Mr Nicholson established an election timetable providing for:-

(a) The electoral roll to close on 23 July 2008.

(b) An advertisement detailing the election being published on 23 July 2008.

(c) Nominations for offices opening on 21 August 2008 and closing on 4 September 2008.

(d) Election packages being mailed out to voters on 23 September 2008.

(e) The poll closing on 16 October 2008.

58       On 13 August 2008 Mr Botterill was appointed as a Substitute Returning Officer because Mr Nicholson became unavailable due to the calling of the State Parliamentary election.

59       In or about early September 2008 nominations were received by the WAEC from, amongst others, Mr Thompson, Mr Byron and Mr Malcolm, for the position of organiser.  Mr Botterill formed the view that Mr Thompson, Mr Byron and Mr Malcolm were not continuously financial members of the CFMEUW as required by the rules as a condition for nomination.  Accordingly Mr Botterill informed them they were not entitled to nominate and he had rejected their nominations.

60       On 2 September 2008 Mr Mellor sent an email to the WAEC saying he had been informed that his name was not on the membership list of the CFMEUW.  He requested the WAEC conduct “an investigation to confirm my eligibility and reinstate me to the roll”.  Mr Nicholson made inquiries of the CFMEUW and Ms Arnold and formed the view that Mr Mellor was unfinancial and therefore not entitled to be on the electoral roll.  Mr Mellor was informed of this by letter from Mr Gately dated 3 September 2008.

61       It was these facts and circumstances which gave rise to the filing of applications PRES 3-6 of 2008.

The Claims of Mr Thompson, Mr Byron, Mr Malcolm and Mr Mellor

62       Whilst, given the course of the proceedings, it is unnecessary to make some of the findings which would have been required if the applicants had wanted to proceed with their applications, a summary of their claims provides relevant background to the evidence which has been received.  The following is taken from the documents filed, affidavits, oral evidence of the witnesses and documentary exhibits.

Mr Thompson

63       Mr Thompson is employed as a rigger.  He said he had been a member of the CFMEUW and CFMEU since 21 July 2003.  He had the same membership number for each union.  Attached to his affidavit were copies of his membership tickets for the periods ending 30 September 2008 and 31 March 2009 respectively.  On neither of these tickets was there any mention of the CFMEUW.  They both only referred to the “CFMEU – Construction and General Division” or the “CFMEU”. 

64       Mr Thompson said he paid his membership fees in full each time they fell due.  Most recently he paid membership fees using a Gold Visa credit card he has with the National Bank.  Attached to his affidavit were copies of his credit card statements for the period 27 September 2007 to 26 October 2007 and 27 March 2008 to 24 April 2008.  The statements recorded that on 2 October 2007 there was a “transaction processed” of a debit of $295 to the “CFMEU, East Perth”.  Also, on 10 April 2008 there was a transaction processed to the “CFMEU, East Perth” for $295. 

65       Mr Thompson also attached to his affidavit a copy of a letter dated 2 October 2007.  The letter was from Mr Reynolds.  The letterhead was “CFMEU – Construction and General Division”.  The letter commenced with the salutation “Dear Member”, thanked Mr Thompson for his payment, said he was a “financial member” and entitled to many benefits including “free ambulance cover, journey cover, travel insurance, legal cover, funeral benefit [sic]”.  The letter included details of the receipt of Mr Thompson’s payment of $295.  A letter and receipt in the same terms, dated 10 April 2008, was also attached to Mr Thompson’s affidavit.  The dates of the receipts on the letters were the same as those for the corresponding transactions appearing upon the credit card statements. 

66       Mr Thompson said these were not however the dates that he tendered payment of his membership fees.  Mr Thompson explained that in or about late August or early September 2007 and in or about late February or March 2008 he received a renewal notice from the “CFMEU - Construction and General Division” to pay membership fees for a six month membership term.  On both occasions Mr Thompson said he spoke to a “woman from the membership section at the union office”.  He said he quoted his membership number and details and paid the membership fees with his credit card.  He was certain he did this prior to Sunday, 30 September 2007 and Monday, 31 March 2008 respectively.  As set out earlier, these dates are significant given the requirement for payment of membership fees six months in advance.

67       Finally Mr Thompson annexed his nomination form dated 2 September 2008 and the letter of rejection from the WAEC on 10 September 2008.  This said he was unable to nominate as he had not been continuously financial.

The CFMEUW’s Response to Mr Thompson’s Claim

68       In the notice of answer and counter-proposal (the answer) the CFMEUW attached a printout of Mr Thompson’s membership history and documents showing credit card payments made on or about 2 October 2007 and 10 April 2008 respectively.  The answer said it “appears from these documents that [Mr Thompson] was two working days late in making payment of his six monthly contribution in advance in September 2007 as required by rule 10(9)(a), and 6 working days late in making payment of his six monthly contribution in advance in March 2008 as required by rule 10(9)(a)”.  The answer said if this was correct “it would appear that [Mr Thompson] had not been continuously financial during the period 4 September 2007 and 4 September 2008, as required by rule 23(1)”.

69       The position of the CFMEUW was amplified in the affidavits of Ms Arnold and Ms Dunn.  In her first affidavit Ms Arnold said she had seen the membership payment records for Mr Thompson, Mr Byron and Mr Malcolm and that all of them were in arrears for “some amount during the course of the relevant 12 month period”.  Ms Arnold said her understanding was that payments must be received prior to the terms commencing on 1 April and 1 October each year, for members to be continuously financial.  Ms Arnold said, from the records attached to the answer, Mr Thompson paid after the commencement of the two terms within the applicable 12 month period. 

70       Ms Arnold, in her first and second affidavits, and Ms Dunn, in her affidavit, gave evidence and produced office records.  They illustrated the system for receiving payments and to support the inference that Mr Thompson paid after the relevant dates in September 2007 and March 2008.

Mr Byron

71       Mr Byron’s claim differed from that of Mr Thompson.  He paid his membership contributions by direct debit instalments.  Mr Byron is employed as an industrial blaster/painter.  He said he was a member of both the CFMEUW and the CFMEU and had  a single membership number.  Attached to his affidavit was a copy of what he said was his current “CFMEUW membership ticket”.  This was in the same form as the ticket belonging to Mr Thompson, in that it was headed and only mentioned the “CFMEU”.  Mr Byron said he had been a member of the CFMEUW and the CFMEU since 30 September 1980. This included a period of approximately 15 years when he was a member of the Western Australian Builders’ Labourers’ Plasters and Painters Union (BLPPU).  This organisation had been registered under the Act but no longer exists. 

72       Mr Byron said in June 1998 he signed a direct debit form to pay his membership fees to the BLPPU.  The amount has increased over time.  He paid $7, then $10 and then $13.  The direct debits were paid out of an account Mr Byron has with the United Credit Union.  Attached to his affidavit were copies of his “online bank statements” for the account for the period 4 February 2007 to 10 September 2008.  Between 27 August 2007 and 7 September 2008, $13 was paid by direct debit, every week.  This was 54 weeks of payments totalling $702 in membership fees.  Mr Byron noted the six monthly membership fee of $295 gave an annual membership fee of $590.

73       Mr Byron said he had, at the beginning of each new six month membership term, received a membership ticket.  Mr Byron said that neither the CFMEUW nor the CFMEU had at any time notified him that his membership fees were in arrears or money was due and owing to either union.  Mr Byron then described the lodgement of his nomination form and its rejection by Mr Botterill.

The CFMEUW’s Response to the Claim of Mr Byron

74       In its answer, the CFMEUW attached a copy of Mr Byron’s membership financial history.  It said that from the document Mr Byron was $5.50 in arrears at the end of September 2007, until the situation was rectified by his payment on 3 October 2007.  He had not therefore paid the whole of the six monthly contributions in advance in September 2007, as required by rule 10(9)(a).  Accordingly Mr Byron had not been continuously financial during the period 5 September 2007 to 4 September 2008 as required by rule 23(1).  One of the documents attached was headed “Membership Master Inquiry”, “CFMEU - - Const & Gen”.  This recorded Mr Byron’s details, said he had joined on 30 September 1980 and that he was in arrears in the amount of $54.50.  The document seems to provide that the request for the information was made on 12 September 2008.  The “member financial history inquiry” of Mr Byron for the “CFMEU - - Const & Gen” was consistent with what was asserted in the notice of answer. 

75       In her first affidavit Ms Arnold referred to the membership records of Mr Byron and said this showed he was in arrears for some time during the relevant 12 month period.

Mr Malcolm

76       Mr Malcolm is employed as a scaffolder/builders labourer.  He asserted he was a member of the CFMEUW and the CFMEU, and had a single membership number.   His membership tickets were attached to his affidavit.  They were in the same form as those of Mr Thompson and Mr Bryon.  He also paid his membership fees by direct debit.  Mr Malcolm said he joined both unions while he was working as a builder’s labourer on 7 May 2007.  He said he signed a direct debit form and arranged to begin paying his union membership fees by weekly direct debits of $20 per week.  That amount was reduced to $12 per week on 26 May 2008.  Mr Malcolm said the reduction in the payment occurred because an “administrative officer” telephoned him and told him the amount of his direct debits was so high that his membership fees were significantly in credit.

77       Mr Malcolm said that under the direct debit arrangement he authorised “the CFMEU” to make weekly direct debits from his savings account with the National Australia Bank.  Mr Malcolm attached to his affidavit copies of his bank statements for the period 17 January 2007 to 15 September 2008.  The bank statements showed the direct debits described in the affidavit.  The bank statements initially recorded the relevant transactions as payment of “union dues” to “Cfmeu Constructi [sic]”.  Later the transactions were recorded as being “union dues” to the “CFMEU”.  Mr Malcolm referred to the membership fees of the CFMEUW being $295 for six months or $590 per year.  He said that from 7 May 2007 to 19 May 2008 he had paid $20 per week on 54 occasions totalling $1,080.  Between 27 August 2007 and 7 September 2008 he paid $1,255 in membership fees by direct debit.  Mr Malcolm said that at no time since becoming a member of the CFMEUW and the CFMEU had he received notification that his “membership fees were in arrears or that money was due and owing to the CFMEUW…” 

78       Also attached to Mr Malcolm’s affidavit was a “direct debit card” headed “CFMEU”.  This set out Mr Malcolm’s number, his name and that he had commenced direct debit contributions on 7 May 2007.

79       Mr Malcolm also described the lodgement and rejection of his nomination.

Response by the CFMEUW to Mr Malcolm’s claim

80       In its answer the CFMEUW attached a print out of Mr Malcolm’s membership financial history.  It showed Mr Malcolm was $236 in arrears at the end of September 2007 and that he remained in arrears until 19 December 2007.  The CFMEUW said that, accordingly, he had not paid the whole of the six monthly contributions in advance by September 2007 as required by rule 10(9)(a).  Additionally, he was $11 in arrears at the end of March 2008 until the situation was rectified by a payment on 3 April 2008, so that he had not at the time paid the whole of his six monthly contributions in advance in March 2008 as required by rule 10(9)(a).  Accordingly, Mr Malcolm was not continuously financial during the period 5 September 2007 to 4 September 2008 as required by rule 23(1).  Attached to the answer were documents in the same form as those which were annexed to the answer in response to Mr Byron’s application.  They were consistent with the answer to Mr Malcolm’s claim

81       Ms Arnold in her first affidavit gave evidence to the same effect as that which she did about Mr Byron.

Mr Mellor

82       Mr Mellor’s claim was that he was wrongly excluded from the electoral role which had been prepared for the election. 

83       Mr Mellor said he had been a member of the CFMEUW and the CFMEU since 25 August 2005.  His membership fees had been paid by direct debit since 4 September 2006.  Mr Mellor also had a single membership number.  He commenced employment with the CFMEU on 22 August 2005 as the media, communications and campaigns officer for both the CFMEUW and CFMEU.  Attached to his affidavit was a copy of his first “CFMEU” membership ticket, in the same form as those earlier described.  Mr Mellor said that when he became a CFMEUW member, membership fees were $281 for six months or $562 per year.  Mr Mellor also attached his membership tickets and/or letters of receipt for the periods ending 31 March 2009, 30 September 2008, 31 March 2008 and 30 September 2007 .  Each of the letters was headed “CFMEU – Construction and General Division”.

84       Mr Mellor said that until September 2006 he received an invoice for his monthly membership fees and paid them in full at the “CFMEUW office” using his MasterCard.  Then, from about late August/early September 2006 he submitted a direct debit form to the “CFMEUW union membership officer” and paid his fees by weekly direct debit.  This commenced on 4 September 2006 in the amount of $11 per week.  Attached to Mr Mellor’s affidavit were copies of his Members Equity Bank InterestME Savings Account statements for the relevant periods.

85       Mr Mellor said he only signed one direct debit form authorising the payment of membership fees.  Attached to his affidavit was a copy of the cover page, page 1 and pages 61 and 62 of issue 1 of the Autumn 2006 Construction Worker Journal (“the Journal”).  On the cover page of the Journal is a logo of a person in a hard hat holding the Southern Cross flag and underneath is written “CFMEU” in bold letters.  At the bottom of the page there is a small reproduction of this on a facsimile membership card, urging people to “use your CFMEU benefits”.

86       Pages 61 and 62 form a single document about membership benefits, joining the unions and includes a membership application form.  There is also a copy of the membership card reproduced on the front cover of the Journal.  There is also a cartoon with a caption saying that when people join “the CFMEU they never stand alone”.  A number of “CFMEU” membership benefits are set out.  The pages also included a message from Mr Reynolds as the “CFMEU WA Secretary” which is signed by him as the “Secretary WA Branch CFMEU Construction Division”.

87       The pages include a “cut out, fold, seal & mail”, “application for CFMEU membership” form and a “direct debit request”.  The membership application is not in the form of the schedule to the rules of the CFMEUW.  The application is addressed to both the CFMEUW and the CFMEU.  The form said the undersigned “hereby apply to become a member of the above named union, [sic] and agree to conform to the rules of the union [sic]”.  I note the singular and not plural was used. 

88       The direct debit request was an authorisation to debit an account “to pay Construction Forestry Mining and Energy Union”.  The authorisation was to the “CFMEU user ID 102216 to arrange for any amount CFMEU may debit or charge …”.  The form also referred to the then annual membership amount of $562 and half yearly membership of $281.  The form provided for a weekly payment “(minimum $20/wk)” to be inserted.  The form said that by signing the direct debit request, the person acknowledged “having read and understood the terms and conditions governing the debit arrangements between you and the CFMEU as set out in this Request and in your Direct Debit Request Service agreement”.  There was then a place for the form to be signed and the specification of the date on which the first deduction was to be made.

89       Also attached to Mr Mellor’s affidavit was a copy of a letter dated 6 June 2007 advising him that his direct debit deductions would increase to $12 per week effective 18 June 2007.  The letter was signed by Ms Linda Pallott as “Membership Officer”.  The letter had the CFMEU logo on the top right hand corner and at the bottom said “Construction Forestry Mining Energy Union Construction and General Division”.  The letter said the increase would be processed automatically and any queries in relation to the matter should be dealt with prior to the relevant date. 

90       Mr Mellor said that between 24 September 2007 and 15 September 2008 he made 51 weeks of payments of $12 per week totalling $612 in membership fees.  Mr Mellor said that neither the CFMEUW nor the CFMEU had notified him that his membership fees were in arrears at any time since he started paying his membership fees by direct debit.

91       Mr Mellor then described how he became aware that he was not on the list of union members eligible to vote and what he did about that.

Response by the CFMEUW to Mr Mellor’s claim

92       As I have said, the CFMEUW did not file a notice of answer and counter-proposal in response to the application to Mr Mellor.  Instead its position was set out in the fourth affidavit of Ms Arnold.  Ms Arnold said she was aware Mr Mellor was not included in the list of members eligible to vote in the CFMEUW election.  She understood that in order to be able to vote a member had to be financial at the date the Returning Officer called for nominations.  That date was 23 July 2008.  Ms Arnold said in order to be financial under the rules the member must have paid their fees for their “union ticket” in advance for the six month union term.

93       Ms Arnold said “members who pay by way of direct debit and who have not paid a sufficient amount during the course of a term to, at the end that term, cover the amount due for the next term will be in arrears once the new term begins”.  She said they “will only be financial  once they  paid enough to cover the fee for the new term”.  Ms Arnold said there were about 400 CFMEUW members in this category.

94       Ms Arnold said members who were in arrears in the sense just described were able to access membership services and benefits, but the right to vote was treated differently given the contents of the rules.  Attached to Ms Arnold’s affidavit was a flyer about getting “a barrow load of first-class work and family benefits”.  The flyer seems to be in the same form as the document contained in the Journal which I earlier described.  The flyer refers to being a member of the “CFMEU”. 

95       Ms Arnold also attached to her affidavit a printout of an inquiry into Mr Mellor’s  financial history.  She said that this recorded that as at 23 July 2008 Mr Mellor was not financial.  On 21 July 2008 Mr Mellor was recorded as being $30 in arrears.  He continued to be in arrears until 11 August 2008 when he was briefly in credit.  The financial history then records another $295 being due.  This appeared on the record on 22 August 2008, although the amount was not due until the end of the union term on 30 September 2008.  Accordingly Mr Mellor was in fact not in arrears from 11 August 2008 until the end of September 2008. 

96       The record confirms that Mr Mellor’s direct debit payments commenced on 5 September 2006.  Payments of $11 per week continued until 20 June 2007 when the amount was increased to $12 per week.  Ms Arnold said Mr Mellor was required to pay $281 by the end of September 2006 to maintain his financial status for the following term.  Instead he had made four payments of $11 during September 2006 amounting to $44.

97       Ms Arnold said at the rate of $11 per week over six months or 26 weeks, Mr Mellor’s total payments were “$286 over the course of the term plus $44 made prior to the commencement of the term”.  She said that if Mr Mellor had paid by a lump sum over the same period he would have paid $281 at the end of September 2006 with the second payment of $281 at the end of March 2007.  This meant a total of $562 was paid over the same period.  Ms Arnold said that where payments were made in the way in which Mr Mellor had, there was a period where the member was not financial at the commencement of the term.  They would however be financial for a period of time toward the end of the term. 

The Can of Worms

98       The evidence which I described as opening a can of worms was primarily that of Ms Arnold during her cross-examination by counsel for the applicants.  Of primary relevance is the following evidence:

(a) Ms Arnold said she was an employee of the “CFMEU C & G” (which is the CFMEU) which paid her wages (T83).

(b) There is no separate membership fee payable by a member of the CFMEU and a member of the CFMEUW (T85).

(c) As a consequence, Ms Arnold answered the question of what the half yearly membership fee for the CFMEUW was by saying there “is no half yearly membership fee for the CFMEUW” (T85).

(d) Ms Arnold oversaw the payment of “union dues … to the CFMEU” (T87, T88).

(e) All attachments to her second affidavit were “about the CFMEU” (T88, T89).

(f) For example pages 27 to 40 of the attachments to her second affidavit were computer printouts of monies received “from members of the CFMEU” (T91).

(g) Also, the attached pages 3 to 26 related to the manual office processing of credit card payments received from “members of the CFMEU” (T91).

(h) Direct debits to “the CFMEU C & G” were set up about 10 years ago (T91).

(i) At the beginning of six monthly terms, letters and receipts were sent by the “federal union” to its members.  For example, a letter to Mr Thompson dated 2 October 2007 (T96, T97).

(j) When half yearly memberships are to be increased the executive of the “federal union” passes a resolution increasing the amount and the resolution is acted upon by administrative staff (T99).

(k) In June 2007 the “executive of the federal union” resolved to increase the six monthly membership contributions (T101).

(l) When asked about the application form in the Journal, Ms Arnold said: “I don’t want to be rude but I don’t actually take notice of the wording up the top of the thing whether it’s CFMEU, CFMEUW, it’s CFMEU to me all that’s… that I work with, I’m sorry” (T103).

(m) A member is only given one number for the two unions (T103).

(n) There are no separate records kept for members of the “state union as distinct from members of the federal union” (T103).

(o) Membership fees from direct debit arrangements are paid to a bank account held by the “federal union” (T104).

99       The quoted passages of (d)-(g) and (i)-(k) are propositions which were put to Ms Arnold by the applicants’ counsel and agreed with by her.

100    Not long after this evidence was given there was a break in proceedings.  Upon resumption I made my first reference to the “can of worms”.  I said, “… it may well be the case or it could be the case that there are in fact no financial members of the state branch of the union [sic-CFMEUW] and I say that because the evidence seems to reveal that every payment from every member has been to and received by the federal union [CFMEU].  If that’s right I’m not sure where it leads”.

101    After some discussion Ms Arnold continued with her evidence and then Mr Malcolm gave evidence before the end of the day of the hearing. 

The Affidavit of Mr Reynolds

102    The affidavit of Mr Reynolds was filed consequent upon directions which were made after the settling of the Inquiry Questions.  It was a lengthy affidavit comprising 32 pages of text and a number of attachments.  Mr Reynolds affidavit covered these topics: his background, the CFMEUW and its predecessors, the amalgamation of the State Builders Labourers Federation with the Federal Construction Forestry Mining and Energy Union, state union amalgamations, the Federal Construction Mining and Energy Union, the separate existence of the CFMEUW, membership, separate jurisdictions, meetings, rights of entry, assets, and a s71 certificate.  Mr Reynolds’ affidavit also covered the Inquiry Questions.  I will now summarise the affidavit and Mr Reynolds’ oral evidence.

(a) Mr Reynolds’ Background

103    Mr Reynolds deposed that he was the secretary of the CFMEUW and authorised to swear the affidavit on its behalf.  He is also the divisional branch secretary of the CFMEU.  Mr Reynolds has been the secretary of the CFMEUW and its predecessor organisations since 1974.  In 1974 Mr Reynolds became the secretary of the “state based Builders Labourers Federation” (the BLFWA).  In the same year he also became the secretary of the Western Australian branch of the Australian Building Construction Employees and Australian Builders Labourers Federation (the Federal BLF).  The Federal BLF was registered under the then applicable federal legislation.

104    When cross-examined Mr Reynolds agreed it was an obligation of the secretary of a union to have knowledge of the rules and to have the rules available to be used as and when necessary (T386).  Based on earlier cross-examination, Mr Reynolds also accepted his working knowledge of the rules of the CFMEUW and the CFMEU was not “as good as it should be” (T386).  Mr Reynolds also acknowledged it was part of the responsibilities of the State secretary under the rules of the CFMEUW to prepare or supervise the preparation of minutes of executive meetings (T427).

(b) The Federal BLF and Amalgamations

105    During the 1990s union amalgamations occurred as a consequence of the deregistration of the Federal BLF.  Mr Reynolds received a letter from the Hon Peter Cook, the then Federal Minister for Industrial Relations, dated 9 January 1991 giving, in Mr Reynolds’ words, “the Federal BLF the period of 8 years to amalgamate with a Federal registered union or face the consequences”.  Relevant negotiations occurred, against a backdrop of, as described by Mr Reynolds, a “genuine fear that an amalgamation may lead to the stripping of assets accumulated by the state based BLF into the new hands of the new Federal amalgamated union which may well have the controlling hand”. 

106    On 15 February 1991 the BLFWA, the Building Workers Industrial Union of Australia, the Federated Engine Drivers and Firemen’s Association of Australasia and the Construction Mining and Energy Workers’ Union of Australia (WA Branch) entered into an agreement to prepare the way for an amalgamation with the “Federal CMFEU”.  A second agreement was signed in 1994 between the Federal BLF and the CFMEU with a similar aim.  A sub agreement applicable to Western Australia was also negotiated and agreed between the BLFWA, the CFMEU and others (“the WA Agreement”).  This was dated 30 March 1994.  As a result of the amalgamation agreements, the Federal BLF ceased to exist in 1994.  Clause 6 of the WA Agreement expressly provided that the assets of the BLFWA would remain under the control of the state registered union.  Clause 5 of the WA Agreement also provided there would be only one application and one subscription fee paid by members of the BLFWA in order to become a member of the CFMEU.

107    On 14 November 1994 the Full Bench of the Commission certified an amalgamation between the following unions, which had been registered under the Act:

(a) The BLFWA;

(b) The Operative Painters and Decorators Union of Australia, Western Australian Branch, Union of Workers; and

(c) The Operative Plasterers and Plaster Workers Federation of Australia, (Industrial Union of Workers) Western Australian Branch.

108    The registration of the Western Australian Builders’ Labourers, Painters and Plasterers Union of Workers (BLPPU) was then cancelled.

(c) The Creation of the CFMEUW and the Previous Election

109    Mr Reynolds’ affidavit described additional negotiations and amalgamations, including delays, culminating in an amalgamation between the BLPPU and the Construction Mining Energy Timberyards Sawmills and Woodworkers Union of Western Australia – Western Australian Branch (CMETU) which created the CFMEUW (see BLPPU v CMETU (2001) 81 WAIG 2722).  As part of this process the rules of the CFMEUW were registered with the Commission.

110    Mr Reynolds said that each year since 2001 the CFMEUW had filed audited accounts with the Commission in accordance with s65 of the Act.  Copies of the accounts for the years 2001 to 2007 were attached to his affidavit. 

111    Mr Reynolds also said that since 2001 the only other election for the CFMEUW was in 2004 when Mr Reynolds (and others) were elected unopposed and there was no requirement for members to vote.

112    When cross-examined Mr Reynolds, said he believed each of the amalgamating unions had financial members (T362).  Additionally, as part of his role as secretary of the newly amalgamated union, he had in his office the records of the two unions.  It was from those records that the initial list of members of the CFMEUW was created (T362).  Mr Reynolds said that a small percentage of the members who were on the initially created list of CFMEUW members were still members of it (T362).

113    Mr Reynolds said that arising out of the agreements through which the CFMEUW was created, it was agreed there would be only one joining fee and contribution for members (T407).  Mr Reynolds said “the whole idea of amalgamation was to get away from having two unions and having two different organisations” (T481).  This answer was given during questions that I asked Mr Reynolds about the apparent contradiction between the need for a separate State registered organisation and the joint functioning of the CFMEU and the CFMEUW.  This topic will be returned to later.

(d) The CFMEU

114    Mr Reynolds also explained that the CFMEU was formed as a result of amalgamations during the 1990s.  A number of unions amalgamated along industry lines to form “the Divisions of the CFMEU”.  Each division operates autonomously with its own membership, executive, resources, industry policies and campaigns.  The CFMEU is also divided into state branches.  Attached to Mr Reynolds’ affidavit was a copy of the rules of the CFMEU.  Also attached was a copy of the CFMEU Construction and General Division Rules.  Mr Reynolds said the CFMEU Construction and General Division Western Australia Divisional Branch (CFMEU) has constitutional coverage of the building construction trades in Western Australia. . 

(e) CFMEU Finances

115    At [45] and [46] of his affidavit Mr Reynolds said:

“45. The Western Australia Divisional Branch pays a percentage of its membership earnings to the federal body of the CFMEU on a 6 monthly basis in accordance with Rule 23 of the CFMEU Rules (“Sustentation Fee”). These payments are made in the form of a cheque sent to the Federal CFMEU Office in Sydney.

46. The Sustentation Fee is currently 15% of membership fees taken in by the Western Australia Divisional Branch. In 2007 the Sustentation Fees paid to the CFMEU’s National Office amounted to $390, 000.”

116    Mr Reynolds also attached the audited accounts of the CFMEU, prepared in accordance with rule 36 of the Divisional Branch Rules.

(f) Section 71 Certificate

117    In his affidavit Mr Reynolds referred to rule 3(18) of the rules of the CFMEUW.  He said he understood “the consequence of obtaining such a certificate is to integrate the administration and official positions held in the respective state and federal unions”. 

118    Mr Reynolds said at [77] and [78] of his affidavit:

“77. In 2001 at the time of the creation of the CFMEUW, the legal requirements relating to the amalgamation were handled by Dwyer Durack. That retainer was terminated shortly after 2001.

78. I cannot now say why a s. 71 certificate was not obtained but I believe that when Allan Drake-Brockman (the Union’s primary advisor in relation to Industrial Relations matters) left Dwyer Durack the Union lost a significant amount of experience and knowledge.”

119    Mr Reynolds also said that the CFMEUW had applied for transitional registration pursuant to Schedule 10 to the WRA.  This was granted on 7 April 2008.

120    In cross-examination, Mr Reynolds said he knew of the decision of Moore v Doyle (1969) 15 FLR 59.  Mr Reynolds commented:-

“Now, sure there was the ability to get a section 71 certificate, which we instructed our solicitors to do, and our solicitors didn’t do it and they left it and there was a mess … our lawyers, who were Dwyer Durack at the time, then Slater and Gordon, all our in-house lawyers ... all of our ... our accountants … none of them have ever told us there’s anything wrong with any of this.” (T418)

121    Mr Reynolds said that when the amalgamation occurred in 2001 there was the ability to get a s71 certificate “and it didn’t happen, and we’ve basically operated as though we did have one”.

122    In this evidence and other evidence which Mr Reynolds gave, he tried to deflect responsibility for what he there described as the “mess”.  In truth however, as the secretary of the CFMEUW and its principal officer under the rules, it was the responsibility of Mr Reynolds to ensure that a s71 certificate was obtained.

123    Later Mr Reynolds said that once Mr Drake-Brockman ceased working for Dwyer Durack the CFMEUW lost a person “who had all the knowledge and experience”.  This was because he was “the union’s solicitor, regular solicitor” (T423).  Mr Reynolds also confirmed however that he had not instructed Slater and Gordon to proceed with a s71 certificate (T423).  He said that Slater and Gordon had been the solicitors of the CFMEUW for roughly eight years (T424).

124    Later I asked Mr Reynolds about the object of the CFMEUW contained in rule 3(18).  Mr Reynolds said “it had always been a problem from day one, even with the old BLF, about the State Union and the Federal Union.  So I was made aware in them [sic] times that there was a remedy to it [the s71 certificate]…and Mr Drake-Brockman made us aware of that…” (T477).  I asked Mr Reynolds about his knowledge of an application for a s71 certificate not proceeding.  He then said “to be honest with you, it sort of got forgotten because it was never an issue” (T478).  This evidence is not consistent with the evidence that it was a “problem from day one”.

125    Mr Reynolds then referred to the accountants of the CFMEU and the CFMEUW and intimated that they had not raised any problems about the two organisations.  He also referred to the Commission and the “Federal Commission” receiving returns.  He said none “of this has ever been raised as a problem by the State Commission.  I mean, the election was called last time, there was no questions [sic] raised there, and then it’s just all blown up now” (T478).  This evidence provides another example of Mr Reynolds not readily accepting that something problematic was his responsibility.

(g) Separate Existence of the CFMEUW

126    Under this heading in his affidavit Mr Reynolds acknowledged that the CFMEU and the CFMEUW were commonly referred to as “simply ‘the CFMEU’ in WA”.  They were run out of the same office in Royal Street, East Perth and were previously co-located in Moore Street, East Perth.  Mr Reynolds said at [50]:

“50. As far as I am concerned, it was always the intention of each of these bodies to preserve their separate functioning and identity. This is critical for a number of reasons but it is especially necessary in order to properly represent the interests of the members who may, at any one time, be employed in either the State jurisdiction or the Federal jurisdiction.”

127    Relevantly, Mr Reynolds also said the following about the distinction or non-distinction between the CFMEU and CFMEUW:

(a) The staff of the CFMEU and the CFMEUW are paid from the  “CFMEU C & G Division” account.  There is however no manner of “identifying staff as employees of the CFMEUW as distinct from the CFMEU”.  Mr Reynolds considers the staff to be jointly employed.

(b) At [57] of his affidavit, Mr Reynolds said:

“57. Funds derived from membership fees are held in an account named ‘Construction Forestry Mining Energy Union Construction Division General Account’.  This account is in fact a consolidated revenue account and the monies are used for both CFMEU and CFMEUW purposes (Consolidated Account).  This has happened since the time of the 1994 WA Agreement”

(c) The cost of proceedings before a court or commission, and legal representation in the form of wages to in-house counsel and the costs of briefing external representation, are both paid for with monies out of the consolidated account.

(d) The form contained in the Journal was created to serve as a single membership application form.  Mr Reynolds said that as an alternative to completing the form in the Journal, a single card could be filled in at the office to join both the CFMEU and the CFMEUW.  Once the card was completed and signed and the member had paid their joining fee they were accepted as a member into both unions (T370).

(e) Mr Reynolds’ intention has always been to recognise the admission of members into both the CFMEU and the CFMEUW.  The single application fee, currently $60 plus GST, has been taken as full payment for the admission required under both the CFMEU and CFMEUW rules.

(f) Mr Reynolds has “attempted” to hold a general monthly meeting of the CFMEU and the CFMEUW on the second Wednesday of each month and a fortnightly meeting of the “Executives”.  General monthly meetings are required under the rules of the CFMEUW but not those of the CFMEU.  The meetings are conducted as single meetings of both unions.

(g) The minute book which records the meetings refers to the “CFMEU” but matters relevant to both unions have been dealt with at the meetings in accordance with the practice of Mr Reynolds.  Examples were given in the affidavit.

(h) Organisers employed by the CFMEU/CFMEUW represent both unions on construction sites in Western Australia.  A right of entry under the state system has been used in the past to investigate alleged safety breaches on “federal” work sites covered by Australian Workplace Agreements or Certified Agreements, under the WRA.

(i) The CFMEUW has retained the ownership of assets which were the property of the BPLLU and the “forerunner unions that amalgamated to form that entity”.  The CFMEUW holds over $25 million worth of assets in the form of property holdings and shares.  These are not jointly held with the CFMEU.

(j) The CFMEUW has a number of separate bank accounts in its name and the CFMEU also has its own bank accounts and some separate assets.

(k) The main income for the CFMEU and the CFMEUW is generated by membership fees which are paid into the consolidated account.

128    Mr Reynolds also gave evidence on this topic when cross-examined and asked questions by me.

129    As to the finances of the CFMEUW, Mr Reynolds said that each year as “State secretary” he made sure separate accounts were drawn up for both the CFMEU and the CFMEUW (T400).  For the financial return filed under the WRA dated 30 June 2008 there was recorded an amount for “Wages - Office holders”.  Mr Reynolds agreed that this amount was all of the wages of the elected and appointed officials of both the CFMEU and the CFMEUW (T400).  Conversely, in the accounts of the CFMEUW filed with the Commission for the year ending 31 December 2007, the accounts recorded that no “remuneration is paid by the Union to key management personnel who are remunerated by a related entity, CFMEU Construction and General Division, WA branch” (T402).

130    In cross-examination Mr Reynolds also agreed with the proposition that in its accounts, for the year ending 31 December 2007, the CFMEU was recorded as having received subscriptions in the amount of $4,794,384.  This was for all subscriptions for both the CFMEU and the CFMEUW.  Mr Reynolds said the “same fee is paid for both [the CFMEU and the CFMEUW] as per the court decision” (T405).  When asked what court decision he was referring to, Mr Reynolds said that when the amalgamation was “done” there was a provision in the agreement saying there would be one fee and he thought this agreement had been ratified by the “Federal Commission” (T406).  Mr Reynolds then indicated the agreement he had in mind was the WA Agreement (T407).

131    The account which Mr Reynolds said in his affidavit was a “consolidated account”, received payments by members of both the CFMEU and the CFMEUW (T408).  It was put to Mr Reynolds that he called it “a general account but it’s an account that is owned and operated by the [CFMEU]”.  Mr Reynolds agreed with this.  Mr Reynolds was also directed to [57] of his affidavit quoted above.  It was put to him that this was not correct. Mr Reynolds agreed (T408).  Mr Reynolds said that contrary to what was contained in the affidavit he called it a “general account” and not a “consolidated account”.  Asked why that description was used in the affidavit, Mr Reynolds said that it “was a name my lawyers must have given me when I went through it.  It’s called a general account by everyone in our organisation” (T408).  Mr Reynolds was then asked whether the use of the description “consolidated account” gave the impression that the account was operated by both the CFMEU and the CFMEUW.  Mr Reynolds reiterated that he did not think of the name and the account was used for “everything” (T408).  Mr Reynolds tried to illustrate this by saying that if “we pay bills for the Federal legals, and there’s plenty of that, we pay it out of there” (T408).  It was put to Mr Reynolds that this was not correct.  He was shown the accounts for the CFMEU for the year ending 31 December 2007 and those for the CFMEUW for the same year.  The documents showed that in both accounts, expenditure on legal costs had been incurred and paid for..  Mr Reynolds then suggested that the legal costs recorded for the CFMEUW might have been for the Construction Skills Training Centre.  Counsel then directed Mr Reynolds’ attention to additional information in the accounts which suggested this evidence was not correct.  When faced with these documents and information, Mr Reynolds prevaricated somewhat in his replies.  Eventually however he agreed with the proposition that the legal costs of the CFMEUW did not include anything to do with the Construction Skills Training Centre (T410).  Mr Reynolds also said there was a bank account operated by the CFMEUW which was separate and distinct from the “general account” operated by the “CFMEU” (T413).

132    Mr Reynolds was also asked about an income line in the CFMEUW accounts for the year ending 31 December 2007 under the heading “107 levy”.  Mr Reynolds said this amount of $733,784 was for the legal costs of 107 members, in responding to an application taken by the Australian Building and Construction Commissioner, in the Federal Court.  This arose out of action taken on a site covered by Federal Enterprise Bargaining Agreements (T413-415).  Mr Reynolds was asked why the money was put into an account of the CFMEUW.  Mr Reynolds said he “wanted to make sure it was held in Western Australia”.  Mr Reynolds was then asked whether he meant that he “wanted to make sure that that levy, that those monies, were the property of the Western Australian state organisation”.  Mr Reynolds responded that he “wanted to make sure no-one else could get their hands on it …” (T414).

133    Mr Reynolds was also shown a document annexed to his affidavit headed the “Statement of Cash Flows” of the CFMEUW for the year ending 31 December 2007.  Under the subheading CFMEUW was the line “Receipts from members and other sources” of $2,843,862.  It was put to Mr Reynolds that this would be a more accurate line if the words “Members and” were removed because this was not a receipt of that amount from “members of the State organisation”.  Mr Reynolds replied: “Now you point it out I think the auditors got it wrong” (T415).  Mr Reynolds then agreed that when he read the document earlier he “didn’t pick up on that” (T416).

134    Mr Reynolds was also asked about [18] of his affidavit and his assertion that there was a fear that an amalgamation might lead to the stripping of assets accumulated by the State based BLF into the hands of the new Federal amalgamated union.  Mr Reynolds said he held that position for “quite a long time and I particularly had for quite a long time after the amalgamation back from 2001 onwards. There’s been some changes in the leadership in our national organisation and that’s now changed my opinion, so I don’t have that fear any more, but that was certainly one of the things that concerned me at the time, but I think there’s a lot of other reasons why we wanted to maintain a state based union” (T417).  When asked about the keeping of separate accounts for the two organisations, Mr Reynolds said they “were one and the same, and they had to lodge accounts with the State Commission and accounts with the Federal Commission, and the auditors knew that, and it was up to them how they prepared those audits, and that’s what they did  … what I told them to do was to comply with all the requirements…” (T417).

135    Mr Reynolds said that another reason why it was important to preserve the separate functioning and identity between the CFMEU and the CFMEUW was because the latter has considerably more assets than the former (T398).

136    Mr Reynolds also said the employees of the CFMEU and CFMEUW were “paid out of an account operated by the federal organisation” (T398).  (This was the account he called the general account).  The elected officials of the CFMEU and the CFMEUW were also paid out of the same account.  Mr Reynolds did not however accept that this could lead to a blurring of the separate functioning and identity of the two organisations (T398).

137    I put to Mr Reynolds that although there was a need for the two organisations, the difficulty was “in the way that they have been intermingled, if you like.  That becomes difficult now to try and work out, for example, who are the members of the union”.  Mr Reynolds replied, what “about the other 50 or 60 unions?  They must have the same difficulty” (T481).  With respect, this did not answer the question.  Shortly after that Mr Reynolds said that “the whole idea of amalgamation was to get away from having two unions and having two different organisations.  The whole idea was to amalgamate and get away from that”.  The difficulty with this assertion by Mr Reynolds is that it contradicts [50] of his affidavit quoted above.

138    Mr Reynolds agreed with the proposition that the main income stream for the CFMEU was generated by membership fees paid into “the Federal organisation’s account, which [he called] the general account” (T438).  Mr Reynolds accepted therefore that what was in [75] of his affidavit was incorrect (T438).  Asked why [75] contained what it did, Mr Reynolds again said that the affidavit was written “with assistance, what was in my mind was that when all the State subscriptions from people joining the State union and all of the subscriptions from the people joining the Federal union, right, go into what’s called here the consolidated account …  which we now know as the general account” (T439).

139    With respect to meetings, Mr Reynolds was shown a document headed “Construction, Forestry, Mining and Energy Union Construction and General Division” minutes dated 14 May 2008.  Mr Reynolds said it was the minutes of the meeting of the CFMEU branch and management committee.  He also said “it would be” a copy of the minutes of an executive meeting of the State organisation.  Mr Reynolds was asked how he could tell it was both.  Mr Reynolds said all of the meetings were run as joint meetings of the CFMEU and the CFMEUW (T380).  He agreed that there was no rule in either the rules of the CFMEU or the CFMEUW which permitted simultaneous meetings of these two bodies.  Mr Reynolds said joint meetings were held for the purpose of “efficiency” (T381).  Accordingly the heading of the minutes dated 14 May 2008 contained an error insofar as it suggested it was not a meeting of the CFMEUW (T381).

140    Mr Reynolds was asked about paragraph [66] in his affidavit in which said he attempted to hold meetings of the executive of the organisations fortnightly.  Mr Reynolds answered that he was assisted by his solicitors in putting the affidavit together and that it was “untrue to say that we hold them fortnightly”.  Prompted that he used the word “attempt” at [66] of his affidavit Mr Reynolds said, “this is a bad scene but if you go back further you’ll find that we do hold them [more regularly] … This [2008]… seems to have been a bad year” (T436).

141    Mr Reynolds was also asked questions about the minutes headed as being those of the CFMEU dated 31 October 2001.  Resolution 13 referred to an increase in the joining fee to $60 from 1 December 2001.  It recorded a “report on union fees” and a decision that “union dues rise with CPI and joining fee rises [sic] to $60 on 1st December 2001”.  It was put to Mr Reynolds that because of the form of the minutes it could not be ascertained whether the increase applied to the CFMEU or the CFMEUW.  Mr Reynolds said it “certainly applies to the Federal Union” because of the heading on the minutes, which was Construction, Forestry, Mining and Energy Union Construction and General Division” (T430).  Mr Reynolds then appeared to accept that it did not apply to the CFMEUW because when he had been taken to the 2007 financial accounts of that union there was no mention of any revenue received by the CFMEUW from members for membership or joining fees (T430).  It was then put to Mr Reynolds, and he agreed, that the application form in the Journal established that a person would apply to become a member of both unions when it was filled in (T430).  Asked again about the minutes on 31 October 2001 and whether it related to only the CFMEU Mr Reynolds said, referring to the WA Agreement, “it applied to both” (T431).

142    There was a similar record in the minutes of the “Construction Forestry Mining and Energy Union Construction and General Division” held on 31 January 2005 to increase “union dues” in line with “CPI movement”.  Mr Reynolds said that six monthly membership contributions had most recently been increased to $295 in March 2007 without “a formal decision of the executive being noted in the minutes”.  Only one decision was made each time there was a membership increase which became a single membership fee applicable to both the CFMEU and the CFMEUW. 

143    Mr Reynolds accepted that the rules required subscriptions to be paid six months in advance and that people who paid by way of the direct debit system were ordinarily going to be in arrears for the “next three months”(T479).  Mr Reynolds also accepted that despite this there was no step taken to remove these people as members under rule 8(2) (T479).  I also asked Mr Reynolds about rule 10(9)(c) and suggested that according to the rule the direct debit and payroll deduction members would be deemed unfinancial.  Mr Reynolds said the rule was not workable.  For example, the employers of people on payroll deductions often work on a 90 day system so that they will deduct during each week, and keep deducting, but will only forward payment to the union after 90 days (T479). 

(h) Mr Reynolds’ Evidence about the Inquiry Questions

144    As I have said Mr Reynolds in his affidavit provided answers to the Inquiry Questions.  A summary is as follows:

(1) (a) What did the CFMEUW executive decide in 2006-2008 to be the contributions to be paid by members for the “following 12 months” in accordance with rule 10(9)(a)?

145    The CFMEUW executive did not set any such contribution.

(1) (b) What, if anything, did the CFMEUW executive otherwise decide in 2006-2008 in relation to a contribution to be paid by the members and what, if anything, is the relevance of this to deciding the financial members?

146    When cross-examined Mr Reynolds admitted he was not aware that there was a requirement under the CFMEUW rules to set a contribution for the membership fee payable by members in July of each year (T425).

147    Mr Reynolds was also asked questions about [83] of his affidavit where he said the executive raised membership dues in accordance with the CPI on 31 January 2005.  It was pointed out to Mr Reynolds that the singular “executive” was used in the minutes.  He was asked which executive he was referring to and he answered that “from the minutes it's headed up C and G Division”; meaning the CFMEU (T440).

148    As to the increase in membership contributions which took place “without a formal decision of the executive being noted in the minutes”, referred to at [84] of his affidavit, Mr Reynolds was asked how that came about.  Mr Reynolds said he “would have worked out what the rate was, asked the industrial people to get me the CPI rate, we’d have worked out what the rate was, instructed the office manager that they [sic] would be the new rate for that period commencing whatever date it was”.  Mr Reynolds said he would work out the amount himself even when it went to the branch management committee (T441-442).  Similar evidence was given at T482.

(2) What was the basis on which Mr Reynolds decided and declared to the Commission in 2007 and 2008 that the number of members of the CFMEUW were 7,702 and 8,471 respectively?

149    Mr Reynolds’ evidence on this question was based upon his instructions to and information received from Ms Arnold.  Membership numbers were retrieved from computer records.  These records showed members as unfinancial if they were “technically in arrears as they have not paid their six monthly membership contribution up front”.  Mr Reynolds had, over time, given directions to Ms Arnold and the office staff to “treat all members paying by regular instalments as financial even if they are technically in arrears”.  Mr Reynolds has taken the number of members to be those who had paid their six monthly contributions on time and those that are on the regular direct debit or payroll deduction system regardless of whether it is shown on the database that they are technically in arrears. 

150    Accordingly, the total membership figure submitted to the Commission in his statutory declarations has consisted of “all members who are recorded as currently paying some or all of their membership fees in the year ending 30 December of the relevant year”.  The membership figures are obtained by extracting information from the membership database showing the current members that have no arrears, current members that have a weekly direct debit and current members that have a regular payroll deduction.  The statutory declarations had been prepared by in-house legal staff and filed in accordance with s63(2) of the Act. 

151    The membership numbers as recorded in the statutory declarations filed with the Commission were also provided to the accountants of the CFMEU/CFMEUW. 

152    Mr Reynolds was asked in cross-examination about the return filed with the Commission on 30 January 2008.  Mr Reynolds said that he normally read through statutory declarations and he thought he would have adopted the same practice on that occasion (T366).  Mr Reynolds was asked what steps he took to ascertain that as of 1 January 2008 there were 8,471 members of the CFMEUW.  Mr Reynolds said that he “would have” asked the office solicitor, Ms Kylie Bowe, to prepare the statutory declaration and she “would have” checked with the office manager and filled out the details.  Mr Reynolds did not personally go to the records of the CFMEUW to ascertain the number but relied upon information from other people (T366).

153    I also asked Mr Reynolds questions about this topic.  In particular I asked about the number of members on the returns including “direct debit people and the payroll deduction people who … may not be financial in accordance with the rules”.  In my opinion, Mr Reynolds did not then directly answer these questions (see T483).  He ultimately confirmed that his direction to Ms Arnold in preparing the returns was to treat members paying by regular instalments as financial, even if they were technically in arrears.  In contrast, he accepted that people who were technically in arrears would have been excluded from the electoral roll given the instructions he gave to Ms Arnold for its preparation (T483).

(3) Why, when and on what basis was it decided that members of the CFMEUW could pay their membership contributions by direct debit or in any other method other than that described in rule 10(9)(a)?

154    By way of background Mr Reynolds explained that direct debit was introduced by the BLPPU in or about 1998.  Payroll deduction by an employer has been in use for as long as Mr Reynolds could remember.  Mr Reynolds said: “No decision was ever made by the executive of the CFMEUW to implement direct debits”.  The system has simply continued from that which had applied prior to the amalgamation which created the CFMEUW.  Direct debiting was recognised by the CFMEU following an amendment to its rules in March 2008.  Mr Reynolds said he had only become aware “since these proceedings commenced, that the federal rule change exposed a deficiency in CFMEUW rules” (T452).  Mr Reynolds readily accepted that under the rules of the CFMEUW there was no provision for direct debit or payroll deduction payments for membership subscriptions (T452). 

155    Mr Reynolds also gave evidence about increases of amounts of direct debits to match increases in membership fees (T455).  Mr Reynolds confirmed that people who were paying regularly by direct debit or payroll deduction were given all of the services and facilities that members are entitled to.  This occurred as long as they were paying regularly (T455).  He said there are also a few members who come into the office and pay instalments during the year, who were treated as financial members (T455).

156    Mr Reynolds was cross-examined about his evidence that he only became aware of the “deficiency in the CFMEUW rules” about direct debits since the proceeding commenced.  He elaborated that the “deficiency” in the CFMEUW rules was that the CFMEU rules had been changed to allow people on payroll deduction or direct debit to get a vote at the election.  Mr Reynolds said he only became aware of that amendment when the proceeding started (T466).  A little later he said that around 23 July 2008, when he instructed Ms Arnold to prepare the list of electors, he became aware there were members in Western Australia who would not get a vote in the election for the CFMEUW (T467).

157    Mr Reynolds gave the following answers to questions that I asked him (T467):

“But there had been people on direct debit and payroll deductions in Western Australia for a number of years hadn’t there? --- Yes. 

But you didn’t think that any of them would get a vote if there was an election? --- No, and they haven’t before. 

Do members know that? Sorry, do you - does the union office and you as secretary take steps to inform members of that? --- It’s sort of only come to my attention out of all of this now, but there hasn’t … there wasn’t an election in 2004. 

No? --- So … and I think there was only an election in 2001, the federal scene, but the … the rules, as I said, the rules are the rules.  The rules say you have to be fully financial on that date.  That’s what the rules say and members can avail themselves of the rules.”

158    In my opinion this final statement of Mr Reynolds was, to put it colloquially, “a bit rich”.  This is because Mr Reynolds, as the secretary and principal officer of the CFMEUW, clearly did not have regard to the rules in the way in which he should have, in making the decisions which he and the executive purported to make, and in the way the CMFEUW has been administrated.

159    I also took Mr Reynolds to the letter to Mr Mellor signed by Mr Reynolds and dated 26 February 2007.  Mr Reynolds agreed that the letter referred to Mr Mellor as a financial member and set out some of the benefits for members.  The membership ticket which was attached to Mr Mellor’s affidavit said it entitled him to “all of the benefits afforded to financial members of the union”.  Mr Reynolds agreed that one of the benefits afforded to financial members of the union was the right to vote (T469).  With reference to the phraseology “as a financial member”, I asked Mr Reynolds whether it was implicitly if not expressly said that Mr Mellor was a financial member.  Mr Reynolds said that when a person was on regular payroll (or direct debit) deductions they were treated as a financial member (T469).

(4) The basis on which Mr Reynolds and/or the CFMEUW decided who the members, financial members and “financial members of the union continuously for one year” were, for the purposes of rules 10(9)(c), 23(1) and 23(10), on 23 July and 4 September 2008.

160    Mr Reynolds said he was informed that Ms Arnold provided this information to the WAEC and he agreed with the content of Ms Arnold’s third affidavit.  Mr Reynolds said the question under rule 23(10), of members being financial “on the day” nominations were called meant that members who were recorded as being in arrears were “technically unfinancial” as the rules required a six month subscription to be paid in advance and in full.  The list of financial members provided to the WAEC was accordingly different from those contained in the most recent statutory declarations filed with the Commission.  Mr Reynolds was informed that over 2,000 people were decided to be unfinancial by the WAEC as a result of the database search which was carried out.  These were in the following categories:

“(a) Members who pay by direct debit but are in arrears: 404.

(b) Members who pay by payroll deductions but are in arrears: 269.

(c) People who owed money and simply had not paid anything for a time:

(i) People owing less than $295: 168.

(ii) Apprentices that owed $89 or more: 20.

(iii) People owing $295 or more: 1996.”

161    Mr Reynolds also gave evidence of his discussions with Ms Arnold about the preparation of the electoral roll.  Mr Reynolds said he was aware there were people who were paying off their accounts, one way or another, who would not be financial on 23 July 2008.  By financial he meant anyone “who had a zero balance or were in credit to the union” (T463).  Mr Reynolds confirmed his position was that he would like members who had been paying contributions by direct debit or payroll deduction to get a vote (T468).  Mr Reynolds’ belief was that members who paid by direct debit and were in arrears because they had not paid their six monthly subscriptions in advance were technically unfinancial but “hard done by”.  Mr Reynolds said he would welcome a decision which would allow them to vote in the election as they are treated as members of the CFMEUW for all other purposes.  Mr Reynolds said the issue was “an anomaly that has not turned up before”.  He accepted that during 2008 the CFMEUW did not make a decision to notify members on direct debits or payroll deductions that if they were not up to date according to the CFMEUW’s internal accounting records, at the date an election was called, the members would not get a vote (T470).

162    Mr Reynolds did not however think that somebody in the position of Mr Thompson, (according to the records of the CFMEUW), would be hard done by in not getting a vote at the election.  This is because he had paid a six monthly contribution, but had done so late (T489).

(5) With respect to the payment by members of the CFMEUW of any membership contributions or purported membership contributions:

(a) Were they deposited or credited to an account with a financial institution?

(b) If yes, what style of account and what was its title, and who was the owner of the funds of the account(s)?

(c) What impact if any do the answers in 5(a) and (b) have in deciding who were and are members and financial members of the CFMEUW, and whether a member was entitled to nominate for election in accordance with rule 23?

163    The contributions were deposited into the “consolidated” account.  Mr Reynolds said the CFMEU and the CFMEUW “jointly controlled the funds” of the account.  The assets of the CFMEUW and the CFMEU were under the control of their executives.

164    Questions (6) – (8) did not require evidence to be given by Mr Reynolds.

Membership Under the Rules

165    As set out earlier there are two concepts under the rules of the CFMEUW which are relevant for the purpose of elections.  The first is that a member is eligible to vote if they are “financial on the day the returning officer calls for nominations…”.  (Rule 10(9)(c) and rule 23(10)). Secondly, candidates for election to any office must be “financial members of the union continuously for one year immediately preceding the next closing date for nominations”.  (Rule 23(1)). The rules therefore contemplate a distinction between a “financial” member and a member who is “continuously” financial for a year preceding the closing date for nominations.  Rule 10(6) requires members to make payment of contributions, fines, dues and levies “as may be prescribed for the time being by the union”.  Rule 10(9)(a) provides for the payment of contributions.  It is the payment of contributions which makes a member “financial”. Rule 10(7) provides that upon payment the member shall receive a half-yearly ticket.

166    Rule 10(9)(c) provides that members not making payments in accordance with rule 10(9) are “deemed unfinancial and shall lose all privileges of membership …”.  The sub-rule provides the member “shall not again become a financial member entitled to any privilege of membership until all arrears have been paid”.  As mentioned the sub-rule then goes on to provide that being financial on the day the Returning Officer calls for nominations gives rise to an eligibility to vote.

167    In my opinion to be “continuously” financial, for the year prior to the calling of nominations, a member must make their contributions in accordance with rule 10(9)(a), so that they are paid half yearly in advance in March and September of each year.  As stated by Gray J in Re Carter; Re Federated Clarks Union of Australia, Victorian Branch (No 1) (1989) 32 IR 1, 28, to be continuously financial “the member concerned must never have lost the status of being a financial member at any stage during the relevant period”.  Rule 23(1) also has the effect that a person who has been a member for less than a year immediately preceding the closing date for nominations, cannot nominate for office.

168    In contrast, in order to be eligible to vote, a member simply must be financial on the day the Returning Officer calls for nominations, in the sense of having, by that date, met their financial contributions for the relevant six monthly period and not being otherwise in arrears in the payment of their contributions.  For example, the executive of the CFMEUW may have decided under rule 10(9)(a) that the amount of the contribution to be paid for the 12 months following July of that year is to be $600.  Accordingly, contributions of $300 would be required to be paid in March and September for the member to be “financial”.  Unless members did so they could not be “continuously financial” for the purposes of rule 23(1).  If the Returning Officer then called for nominations to office on 21 August, any member who had by that time paid the amount of $300 for the period from March to September, and who was not otherwise in arrears in their contributions, would be eligible to vote.

169    The effect of this is that members who purported to pay their contributions by way of direct debit or payroll deductions would very likely not be financial on the date nominations were called.  This would be so unless that member was sufficiently in credit, so that the payments which they had made by way of direct debit or payroll deduction had the effect that they were up to date with their six monthly financial contributions by the relevant date, or they were paying more than the minimum amount per week to total the six month contribution.  Regrettably therefore members who have been encouraged by the executive to and have purported to make their contributions by direct debit or payroll deductions are likely to be disenfranchised.  This is despite the fact that they have been otherwise treated as financial members.

170    This is however but one example of the difficulties which have emerged because of the failure of Mr Reynolds and the executive to ensure that the rules of the CFMEUW were properly applied with respect to membership.  The failures have included:

(a)          Encouraging and receiving direct debit and payroll deduction membership contributions when there is no provision for the same under the rules of the CFMEUW.  Contrary to the evidence of Mr Reynolds, this problem existed long before the rules of the CFMEU were amended in March 2008 to allow for direct debit contributions.  

(b)         Failure to comply with rule 10(9)(c) insofar as members who were not financial, because they were paying their contributions by way of direct debit or payroll deductions, were treated as financial members; with one exception, when the rule said that they should be “deemed unfinancial”.  The exception is that when it came to the preparation of an electoral roll, these members were excluded.  This was different from the preparation of the returns for the Commission when members whom Mr Reynolds said were “technically unfinancial” were included in the membership numbers submitted.

(c)          The executive did not decide in July of each year the amount of the contributions to be paid for the following 12 months, contrary to rule 10(9)(a).

(d)         The way in which the membership of the CFMEUW has been administered has not taken into account rule 8(2) and rule 7 of the rules.  Rule 8(2) refers to the expiry of a member’s “subscription” and their responsibility for payment of “subscriptions”.  Although this is a different word from “contribution”, it seems plain that they are the same thing under the rules.  The CFMEUW has not been administered on the basis that a person whose contribution is in arrears for a period of three months after the requirement for payment in March and September has their membership terminated (rule 8(2)).  I acknowledge however may be some difficulty in the application of this rule in conjunction with rule 10(9)(c) and the prospect of a previously unfinancial member becoming financial and therefore eligible to vote by the date of the calling for nominations for election.

(e)          The administration of the membership of the CFMEUW has not occurred in accordance with s64B – s64D of the Act.  The sections provide:

“64B. Membership to end if subscription not paid

(1) Where — 

(a) a period in respect of which a subscription has been paid to an organisation for a person’s membership of the organisation expires; and

(b) no subscription to continue or renew that membership has been paid to the organisation before, or within 3 months after, that expiry,

that membership ends by operation of this subsection at the end of that 3 month period.

(2)          Subsection (1) does not apply if the membership has already ended under section 64A or under the rules of the organisation.

64C. Effect of sections 64A and 64B in relation to rules

(1) The ways of ending membership of an organisation set out in sections 64A and 64B are in addition to any ways of ending that membership provided for in the rules of the organisation.

(2) The ending of membership of an organisation under section 64A or 64B has effect despite anything in the rules of the organisation.

64D. Purging the register

 The rules of an organisation shall provide for the register referred to in section 63 to be purged on not less than 4 occasions in each year by striking off the names of members whose membership has ended under section 64A or 64B or under the rules.”

171    Section 64D of the Act requires an organisation’s membership register to be purged on not less than four times each year by the striking off of members whose membership has ended because of s64B of the Act.  Similar problems therefore arise in (e) to those noted in (d).  Members who are not financial for three months into the next payment period, because they are making direct debit contributions, are not treated as having their membership ending and being struck off the membership register.

172    It is the failure to ensure that the CFMEUW was properly administered in accordance with the rules, by Mr Reynolds and the executive, which has caused some of the problems which have now become apparent.  The fact that the problems have only now crystallised does not mean that they should have been allowed to occur, remain and fester.

173    It is also relevant to comment at this stage that the CFMEUW is not an under-resourced organisation in which a small executive has battled against the odds to exist and function.  As set out in the affidavit of Mr Reynolds, the CFMEU and the CFMEUW have approximately 27 staff members in Western Australia including elected organisers and also legal officers.  It also has significant financial resources and has the capacity to and/or has engaged accountants, solicitors and counsel to provide assistance, advice and representation when required.

174    Other difficulties have occurred because the CFMEUW has not been satisfactorily run and administered by Mr Reynolds and the executive as an organisation under the Act and independently from the CFMEU.  Pursuant to s60(1) of the Act the CFMEUW, upon its registration  became and is for the purposes of the Act “a body corporate” by its registered name.  It is a separate legal entity from that of the CFMEU which was formed under and governed by the WRA and predecessor Commonwealth legislation.  The CFMEUW has not however been treated in this way.

175    This has occurred with respect to :

(a)          The conjoint meetings of the CFMEUW and the CFMEU, which is not contemplated under the rules of the former.

(b)          The failure to set separate entrance fees and contributions.

(c)          The failure to properly distinguish between being a member of each organisation.  As a consequence, only a single membership ticket has been issued to members.

(d)          There has been a joint application form for membership of the two organisations.

(e)          Contributions which were purported to be paid for membership of both unions were deposited into a single account in the name of and controlled by the CFMEU.

176    There is nothing in the rules of the CFMEUW which contemplates (c)-(e).

177    In the evidence of Mr Reynolds and the submissions of the CFMEUW it was asserted that the single entrance fee and contributions to both organisations could be traced to the terms of the WA Agreement.  I think this point has limited weight.  The relevant clause of the WA Agreement was very specific and limited in the time and circumstances in which it would operate.  The relevant clause of the WA Agreement is clause 5 which provided:

“5. The members of the BLFWA shall be and become members of the CFMEU Construction Labourers, Plasters and Painters Divisional Branch without the necessity to pay entrance fees or dues over and above the dues payable to the BLFWA”.

178    The clause only applied to then members of the BLFWA and only with respect to their membership of the second organisation described in the clause.  It does not have application in relation to the present administration of the CFMEUW in accordance with its rules or to the presently existing or new members of that organisation.

179    I have earlier referred to the failure of the executive of the CFMEUW to set contributions in accordance with rule 10(9)(a) of the rules.  Indeed the executive has not set a yearly contribution since 31 January 2005.  Even then, this decision was not strictly made in accordance with the rules.  Firstly, the decision was not made in July 2005 as contemplated in rule 10(9)(a).  Secondly the minutes of the meeting on 31 January 2005 do not provide for a decision as to the “amount of contributions” to be paid.  They merely record that “dues be increased in line with the CPI movement”.  Thirdly this does not of itself indicate that, in accordance with rule 10(9)(a), contributions were based upon  “1% of the All Industry Groups (Adult Males) Average Weekly Earnings as shown in the Australian Bureau of Statistics, Earnings Indexes or like indicator for June in the preceding year”.  Fourthly, the minutes are headed “Construction Forestry Mining and Energy Union Construction and General Division”.  The relevant item in the minutes refers to “union membership” and “union dues”.  There is nothing in the minutes to indicate that this decision was to apply to the CFMEUW as well as the CFMEU.

180    Whilst these problems are of concern, it is the uncontradicted evidence of Mr Reynolds that the meeting did also constitute a meeting of the executive of the CFMEUW and the decision taken was to apply to contributions for membership of the CFMEUW.  Accordingly, albeit not without hesitation, I am of the opinion that contributions for membership of the CFMEUW were validly set by the executive on 31 January 2005.  There is a difficulty in establishing from the minutes the amount of the raised membership “dues”.  However the uncontradicted evidence of Mr Reynolds was that from September 2005 the decision was put into effect by the requirement for a payment of a six monthly contribution of $281.  I accept the amount of the contribution was validly set despite the executive meeting being in January 2005 and not July 2005 as contemplated by rule 10(9)(a).  I do not accept that it is the intention of the rules as a whole to necessarily make invalid a decision of the executive in January, as opposed to July, to increase contributions.  This is particularly so when, based upon the evidence of Mr Reynolds, the increase did not apply until after July, in September 2005.

181    Mr Reynolds’ evidence was that the contributions increased “without a formal decision of the executive” in March 2007 to  $295.  I do not accept that this occurred validly in accordance with the rules.  Indeed this was conceded by the CFMEUW in its closing submissions.  The rules do not contemplate a decision to increase membership contributions being made by anyone other than the executive.  Accordingly, in my opinion the financial status of members should be determined on the basis that the six monthly contribution which was and is payable, since September 2005, is $281.

182    It is of course highly problematic that the accounts, membership database, payments by members and assessment of their financial status has been premised on the contribution being $295 and not $281 per six months, since March 2007.  Relevant to the inquiry, the financial status of members who have been regarded as unfinancial on the basis of the required contribution being $295 per six months, will need to be reassessed by the CFMEUW.

183    Any other complications and issues which may have arisen because of the CFMEUW and its members acting on the basis that the membership contributions were $295 per six months, from March 2007, is beyond the scope of the present inquiry.

184    I have earlier referred to the evidence of Mr Reynolds in which he referred to the “mess” which he said occurred because of the failure to obtain a s71 certificate.  In my opinion this description is not unfair given the situation which has arisen because of the failure to separately administer the CFMEUW, in accordance with its rules, and the failure to properly apply the rules to the members of the CFMEUW as outlined above.  Further and as indicated earlier, the responsibility for this primarily lies, not with the past or present solicitors, in-house lawyers or accountants of the CFMEUW.  The responsibility lies directly with Mr Reynolds and the executive.  To repeat, the secretary is the principal officer of the union (rule 16(4) and rule 25(2)).

185    The prospect of obtaining a s71 certificate is not something that has recently arisen.  It was, as set out earlier, contained within the rules of the CFMEUW from the time when it was first registered.

186    Notwithstanding this, as I have quoted earlier, Mr Reynolds said it was always the intention of the CFMEUW and the CFMEU “to preserve their separate functioning and identity”.  Mr Reynolds said this was “critical” in his affidavit at [50].  At [64] of his affidavit Mr Reynolds said that the “need to maintain separately registered state and federal unions has always been very important”.  What has problematic and in part lead to the “mess” however is that Mr Reynolds and the executive of the CFMEUW have not administered that organisation as a separate body.

Answers to the Inquiry Questions

Inquiry Question 1

187    With respect to question (1)(a), as set out above the executive of the CFMEUW did not make any decisions in July of 2006 – 2008 about the contributions to be paid by members for the “following 12 months” in accordance with rule 10(9)(a) of the rules.  As to question 1(b), the executive of the CFMEUW did not otherwise make any decisions in 2006-2008 about the contributions to be paid by members of the CFMEUW.  The attempt by Mr Reynolds on his own to increase the amount of contributions in 2007 was not in accordance with the rules and invalid.  The financial status of members should be ascertained on the basis that the amount of six monthly contributions required to be paid is $281.

Inquiry Question 2

188    I have earlier described the evidence of Mr Reynolds about this.  It is apparent that, as he conceded, the membership numbers declared in the returns included people who were “technically unfinancial” because their method of making contributions was by direct debit or payroll deduction.  It is beyond the scope of the present inquiry to consider whether there are any ramifications which flow from this.

Inquiry Question 3

189    I have set out the limited evidence given by Mr Reynolds on this topic.  In the end however the answer to this question does not take matters very far.  This is because, quite simply, payment of membership contributions by direct debit or any method other than that described in rule 10(9)(a) of the rules is, of course, contrary to the rules and should not have been permitted, let alone encouraged, by Mr Reynolds and the executive of the CFMEUW.

Inquiry Question 4

190    I have summarised the evidence of Mr Reynolds and Ms Arnold about the basis upon which the CFMEUW decided who were members, financial members and financial members continuously for one year for the purpose of rules 10(9)(c), 23(1) and 23(10).  Given what I have said earlier, these determinations could be inaccurate in taking the amount required to be paid for six monthly contributions as $295 and not $281.  The same may be said for the Returning Officer in his determination of those persons who were entitled to nominate and in deciding who was entitled to vote, consequent upon being provided with a roll of electors.

Inquiry Question 5

191    As set out earlier the contributions of members were deposited into a bank account named “Construction Forestry Mining Energy Union Construction Division General Account”.  As clarified in Mr Reynolds’ oral evidence, this account is referred to by him and others as the “general account” and not a “consolidated account” as described in his affidavit.  From the evidence it appears the money from this account is used for both CFMEU and CFMEUW purposes.  It would also appear that the owner of the funds in the account is the CFMEU; although it is unnecessary to make a final determination on this issue for the purposes of this inquiry.  Indeed it would be inappropriate to do so given the lack of all relevant evidence.

192    The more important question for present purposes is that contained in inquiry question 5(c).  That is, given the answers to 5(a) and (b), is there any resultant impact in deciding who are the financial members of the CFMEUW?  As is clear from what I have earlier written, this issue has troubled me since the “can of worms” was first opened.

193    From the available evidence, it seems clear that contributions are paid by members of the CFMEUW to representatives or employees of the CFMEU and/or the CFMEUW for the purpose of becoming a member or maintaining financial membership of both organisations.  This evidence includes that of Mr Reynolds, the direct evidence from each of Mr Thompson, Mr Byron, Mr Malcolm and Mr Mellor and the form of the application to become a member, contained in the Journal.  The latter is an application to join both organisations.  My conclusion is reinforced by the evidence of Mr Reynolds that, for example, a construction worker may readily move between what is colloquially described as “federal” and “state” worksites; or there may from day to day be “federal” or “state” issues which arise on a worksite.  For example, although the terms and conditions of employment for a construction worker on a site may generally be governed by an instrument under the WRA, a “state” issue like occupational safety and health may also arise on the site.

194    In addition, from the evidence of Mr Reynolds, the payment of contributions is received as the payment of a contribution to both organisations.  To some extent, as indicated by Mr Reynolds, this system has emerged from the way in which the CFMEU and the CFMEUW were created; and the terms and the intent of the WA Agreement.  In their submissions, the CFMEUW emphasised what it described as the “unique set of circumstances” which commenced with the deregistration of the Federal BLF in the 1980s.  It was submitted that the history was fundamental to matters going to intent, including the operation of the CFMEUW.  Allen v Sideris (1984) 3 FCR 548 was heavily relied upon as establishing the correctness of an approach of considering the present administration of an organisation or organisations through a paradigm which takes into account the relevant history.  Whilst I accept this, it should not be forgotten that the obligations of Mr Reynolds and the executive were to administer the CFMEUW in accordance with its rules, not from an understanding as to how they thought the organisation was intended to operate.

195    The relevance of the intention of the payer and the payee in determining membership was emphasised by Gray J in Bailey v Krantz (1984) 13 IR 326 at 383-384.  The following two passages of his Honour’s reasons at 384 are in my opinion apposite to the present inquiry:

“A member paying one sum of money, which he or she believed was all that he or she was obliged to pay, would expect that all obligations arising under both sets of rules would be met from that sum of money, and that any further decisions made to spend that sum of money would be made in accordance with both sets of rules.

…

If no intention may legitimately be inferred on the part of the payers, then it may be proper to look at the intention of the payees.  These are, in effect, the elected officials, whose obligation it is to comply with both sets of rules.  Their intentions in receiving monies from members must necessarily be constrained by their duties to obey both sets of rules.”

196    As to the final sentence in this passage of Gray J, it is unnecessary in the present inquiry to determine whether there has been any contravention of the rules of the CFMEUW by the depositing of the contributions of members into the account held by the CFMEU.  What is relevant is that I accept that payments made by members, deposited into the general account, were payments made and received as contributions towards financial membership of the CFMEUW.

Inquiry Question 6

197    The determination of who are or were the financial members and continuously financial members of the CFMEUW should be done in accordance with the rules.  I have earlier set out what I consider to be the proper construction of the rules for this purpose.  Inquiry question 6 is premised upon the dates of 23 July 2008 and 4 September 2008 being relevant.  Whilst for the reasons earlier set out these dates have historical relevance, given the postponement of the election this does not necessarily remain so.  I will later return to this issue.

Inquiry Question 7

198    I have earlier set out what I regard to be the proper construction of the rules about membership, financial membership, eligibility to nominate for offices in elections and eligibility to vote.  It is unnecessary to elaborate upon that earlier discussion.

Inquiry Question 8

199    This question is about the orders which should be made in the proceeding.  As neither  Mr Thompson, Mr Byron, Mr Malcolm nor Mr Mellor wish to continue with their applications, no orders should be made specifically about the entitlement of the first three to nominate and the entitlement of Mr Mellor to vote.  I am presently of the view that, for the purposes of certainty, orders to this effect should be made.  I will later discuss the issue of what, if any, other orders should be made to determine the inquiry pursuant to s66(2)(e) and s66(2)(f) of the Act.

Irregularities

200    I have earlier set out the meaning of “irregularity” as defined in s7(1) of the Act.  Section 66(2)(e) and s66(2)(f) of the Act are a code in that these subsections contain all of the President’s jurisdiction and powers to make orders or directions about election irregularities.  (Stacey v Civil Service Association of Western Australia (Inc.) (2007) 87 WAIG 1229 at [255]-[262]; [272]-[274]; [279] and Harken v Dornan (1992) 72 WAIG 1727).  From the terms of s66(2)(e), the making of a finding that there is or has been an irregularity is a necessary condition before the types of orders described in that subsection or s66(2)(f) may be made.

201    Although the definition of “irregularity” in s7(1) of the Act is inclusive, the definition includes a very fulsome description of those things which could constitute an “irregularity” in relation to an election for office.  The structure of the definition is such that for there to be an irregularity there needs to have been a particular action or state of affairs and a particular consequence.  The action or state of affairs can be:

(a) A breach of the rules of an organisation; or

(b) Any act, omission, or other means.

202    The consequence, is either

(a) The full and free recording of votes, by persons entitled to record votes and no other persons; or

(b) A correct ascertainment or declaration of the results of the voting,

is or is attempted to be, prevented or hindered.

203    The definition of “irregularity” is not materially different from that is which has applied in Commonwealth industrial legislation and considered, for example, by the High Court in The Queen v Gray; Ex parte Marsh (1985) 157 CLR 351 and Re Collins; Ex parte Hockings (1989) 167 CLR 522. 

204    In Marsh, Gibbs CJ at 368 said:

“The notion of an irregularity, in relation to an election, involves the idea of some departure from some rule, established practice or generally accepted principle governing the conduct of the election”.

205    These observations were applied by the members of the High Court in Collins.

206    The observations of Gray J in Re Bailey; Re Transport Workers Union of Australia (Victorian Branch) (1997) 79 IR 1 at 7-9 are of particular assistance to the present inquiry.  In Re Bailey, his Honour was in part considering whether the removal of unfinancial members from the computer records of the organisation constituted an irregularity.  The relevant rules were such that unless they remedied their unfinancial status prior to the closing time for nominations on 29 November 1994, they would not have been entitled to vote.  Their lack of financial status could have been remedied by the payment of arrears of contributions.  If this had occurred by the relevant date, entitlement to vote would have followed.  His Honour said at 7-8:

“There was, however, no obligation to be found in the rules of the union, or arising otherwise, to send an account to an unfinancial member in respect of the contributions for 1994.  Conversely, the failure to send accounts to these members whose unfinanciality extended over three years or more did not deprive any of them of the opportunity to vote.  They were deprived of the right to vote by the operation of r 21 because they were unfinancial.  It was open to any of them to remedy that situation, as I have said.  There is no evidence that any sought to do so.  In these circumstances, the removal of the names from the computerised membership records could not amount to an irregularity in relation to the subject elections.  I therefore terminated the inquiry with respect to this alleged irregularity on the first day of the hearing”.

207    This paragraph is of particular assistance as it reasons that if a person is not entitled to vote (or be nominated) because of a proper application of the rules of an organisation, that is not an irregularity.  In terms of the definition in s7(1) of the Act there will have been no breach of the rules of the organisation.  Furthermore there will not have been any act, omission or other means by which the full and free recording of votes “by persons entitled to record votes, and no other persons” has been prevented or hindered.  This applies to members who have, for example, paid contributions by direct debit but who are unfinancial.

208    Senior counsel for the CFMEUW accepted the correctness of the observations by Gray J in Re Bailey.  It was submitted however that his Honour’s discussion did not cover the present situation.  That is because here, Mr Reynolds and the executive of the CFMEUW encouraged and purported to authorise the receipt of membership contributions made by way of direct debit or payroll deduction, when the rules did not. (T560).  Furthermore, these members were regarded as financial and received all of the benefits of financial membership, apart from being included on the electoral roll.  As I have said the fact that this has occurred is quite regrettable.  Whilst I accept that this type of issue was not discussed in Re Bailey, in my opinion it remains the position that if members have paid by direct debit are unfinancial, this does not constitute an “irregularity” in accordance with the Act.  That is because, as I have said the proper application of the rules to determine who is a financial member cannot, axiomatically, mean that there has been a breach of the rules or any other act by which “the full and free recording of votes…” or a correct ascertainment or declaration of the results of the voting, is or is attempted to be prevented or hindered.

The Alleged Irregularities

209    I have earlier set out in full the schedule of possible irregularities.  In determining whether the possible irregularities identified in paragraph 4 of the schedule have occurred, I apply what I have just described about the meaning of “irregularity”.  In addition, I have also discussed and considered the Inquiry Questions and facts necessary to determine whether the alleged irregularities have occurred.

210    From what I have said it is apparent that in my opinion what is contained in paragraphs 4(a), (b), (c), (d), (e), (g) (there is no (f)) and (h) do not of themselves constitute irregularities.

211    The only irregularity which may be established is that which stems from the fact that the CFMEUW has been acting on the basis that the amount of six monthly contributions is $295, when as I have said the last valid setting of a six monthly contribution was in the amount of $281.  To the extent that any electoral roll which was or is prepared and did or does not include as an elector a person who was financial having regard to a required contribution of $281 per six months, an irregularity has or will occur.  This is an irregularity because it will involve a breach of the rules and/or the prevention of the recording of a vote by a person entitled to do so.

212    Additionally, determining the financiality of members must be done on or by reference to the actual date under consideration and not some earlier date when the notice was sent.  This is to prevent a wrong decision that someone was not financial, as exemplified by Ms Arnold’s evidence about Mr Mellor, from August to the end of September 2008, described earlier. 

213    Accordingly, if there is to be an election, the electoral roll must be prepared on the above basis.

214    This, together with what I have said earlier about direct debit and payroll deduction payments means that unless by the relevant date a member has paid the amount of $281, as his/her six monthly contribution, and are not otherwise in arrears to the CFMEUW, he/she will not be entitled to vote.

The Section 71 Solution

215    It was submitted by the CFMEUW that the appropriate outcome to the present inquiry was to make orders that the election not occur and that instead the “CFMEUW be directed to make application forthwith for a certificate under s71 of the Act and to prosecute its application with expedition”.  It was contended that in the event a s71 certificate was not granted by the Commission, then orders be made for the conduct of the election.

216    The basis of this submission was that because of the election of Mr Reynolds and his team in the Federal sphere, the membership had spoken.  Additionally, Mr Kavanagh and other members of the “Renew the CFMEU” team endorsed this approach.  It was submitted that in the formal votes counted in the Federal election, the “Renew the CFMEU” and Reynolds’ teams received a total of over 93% of the votes of members who chose to vote.  I was also informed that of the 3813 formal ballot papers, Mr Mcjannett received 245 first preference votes for the position of assistant secretary.

217    It was also submitted:

(a) It has, since its creation, been an object of the CFMEUW to apply for and be granted a s71 certificate under rule 3(18).

(b) Instructions to apply for a s71 certificate had been given to solicitors; albeit more than eight years ago (T478).

(c) The Act does not contemplate that a s71 certificate may not be applied for and granted during a pending election inquiry and the provision of the certificate would have the effect, from s71(5) of the Act, of removing the need for an election.

(d) It was not in the public interest to have an election under the Act because, given the way in which the CFMEU and the CFMEUW have structured their operations and dealt with their assets, the organisations could be fractured by a result which was inconsistent with the recent Federal election.

(e) The difficulties involved in the application of rule 6 and s64B - s64D of the Act would be obviated if a State election was avoided and a s71 certificate issued.

218    I have given careful consideration to these submissions.  I have decided however that it would be inappropriate to make the order sought by the CFMEUW.  This is because:

(a) Although the rules of the CFMEUW include the object contained in rule 3(18), this has not been acted upon since the coming into existence of the CFMEUW.

(b) At all relevant times in the inquiry, the CFMEUW, Mr Reynolds and the applicants were aware that two elections were proceeding.  No one, prior to the making of final submissions, contended that the inquiry should remain pending until the outcome of the Federal election was known.  Additionally it was not until then submitted that making an application for a s71 certificate was the panacea to the problems which have emerged.

(c) The members of the CFMEUW are entitled, in accordance with its rules, to have an election for offices.  It would take a strong reason for the Commission to make an order that this not occur.  The fact that problems have emerged, because of the failure of Mr Reynolds and the executive to administer the CFMEUW in accordance with its rules, does not constitute such a reason.

(d) Indeed, in my opinion the members should be able to have an election where they can, if they desire, consider and judge the actions of Mr Reynolds and the executive.  To not allow an election would be tantamount to saying that because of the failure by the executive of the CFMEUW to manage the organisation in accordance with its rules, the members should be denied the right to consider whether they should be re-elected.  This could not be properly permitted by the Commission in my opinion.

(e) The evidence before me does not establish that there is either:

(i) A coincidence of offices in the CFMEU and the CFMEUW; or

(ii) A coincidence of nomination for positions in the CFMEU and the CFMEUW elections.

(f) In relation to (ii), to decide not to conduct a State election would deny those people who had their nominations for an office accepted by the Returning Officer the opportunity of being elected to those offices.  There is insufficient information before me to establish that this is what all of those people would now want to occur.

(g) There is insufficient information before me to establish that the outcome sought by the CFMEUW is that which would be desired by its members and financial members.

(h) In addition there is a public interest in the election for offices in the CFMEUW occurring in accordance with its rules.

(i) An application for a s71 certificate would in itself involve and problems.  This is because:

(i) In order for the certificate to be granted, the Full Bench would need to come to the conclusion that the qualification of persons for membership of the CFMEU and the CFMEUW were substantially the same.  It is inappropriate for me to assume or pre-empt what the decision of the Full Bench on this issue might be.

(ii) The evidence does not establish that the CFMEU is an organisation the rules of which prescribe offices which are the same as those contained in the rules of the CFMEUW.  Under s71(4) of the Act this involves, that for every office in the CFMEUW, there is a corresponding office in the CFMEU.

(iii) In order for a s71 certificate to be granted, the rules of the CFMEUW would need to be altered pursuant to s62 of the Act (s71(5)(a)).  If this were to occur it could be a time-consuming process.  Additionally the process would, in accordance with rule 36 of the rules and the Act, require a decision to this effect to be made by the members.  This is problematic because people making contributions by direct debit or payroll deduction and who have been treated as members, may well not be financial members, for the reasons earlier outlined.

(j) The people entitled to vote in the State election may well be different from the Federal election electors.  This is because of the different rules for determining financial membership.

Conclusions

219    For these reasons, in my opinion there should still be an election of offices under the rules of the CFMEUW.  The election and its timetabling will however need to be modified to take into account the delays which have occurred because of the inquiry.  It is necessary to set a date for the calling of nominations.  At this stage I would favour this date being such that members who are unfinancial will have the opportunity to become financial.  To facilitate this it would seem to me to be appropriate for the CFMEUW to send a circular to each member who may not be financial because of their payments being made by direct debit or payroll deduction, of the need for them to become financial, by a particular date, if they are to vote in any election, and providing the amount which they need to pay to the CFMEUW to do so.  Additionally, in determining the financial status of members, the CFMEUW will need to rectify its register so that it reflects a membership contribution of $281 per six months and not $295.  I will need information on how this can best occur and by when it might be reasonably yet expeditiously achieved.  That will be relevant to the setting of a timetable for the election.

220    There are also issues identified by the Returning Officer in his final submissions.  My preliminary view is that new nominations should be called for.  Also, people who have become members or financial members since 23 July 2008 and before the date on which nominations are called should be entitled to vote.  I also favour, in accordance with rule 23(18), that the period between the opening and closing of the ballot be 21-28 days.  I also favour an order being made that the CFMEUW provide the WAEC with a list of persons eligible to vote in accordance with these reasons.

221    In my opinion it is appropriate for the parties to bring to the Commission minutes of proposed orders to facilitate the carrying out of the election in accordance with these reasons.  A directions hearing has been scheduled for 28 January 2009 at 9.30am at which the parties’ minutes and submissions on the appropriate orders can be received and heard.