Rectification of Invalid Elections and Financial Reporting in NSW

Industrial Relations Commission (NSW)

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📜 Headnote Official document

The Industrial Relations Commission of NSW declared and rectified invalidities in elections and financial reporting by an organisation, ensuring compliance with the Industrial Relations Act 1996 and related Acts.

📚 Full judgment Official document

Industrial Relations Commission of New South Wales

CITATION: The Master Builders' Association of New South Wales (No 3) [2010] NSWIRComm 39

PARTIES: The Master Builders' Association of New South Wales (Applicant)

FILE NUMBER(S): IRC 2051 and 2052 of 2009

CORAM: [NAME]: REGISTERED ORGANISATIONS - Employer [NAME] - Application for declaration of invalidity - Invalidity arose in relation to conduct of election, filing of statutory declarations concerning membership register and reporting of financial accounts - Invalidities found - Court satisfied that orders proposed would not do substantial injustice to the members of [NAME] or any [NAME] of [NAME] or any person having dealings with [NAME] lost of elections conducted prior to 2001 - Capacity of Court to rectify failure to lodge relevant documents with [NAME] in relation to elections required to have been conducted prior to 2001 - Records of financial accounts for years 1997 to 2001 lost - No basis for suspending or cancelling [NAME]'s registration on the ground of lost financial [NAME] records - Declarations made - Orders made.

Conciliation and Arbitration Act 1904 (Cth) LEGISLATION CITED: Industrial Relations Act 1991 Industrial Relations Act 1996

Geneff v Peterson (1986) 19 IR 40 The Master Builders' Association of New South Wales [2008] NSWIRComm 159 CASES CITED: The Master Builders' Association of New South Wales (No 2) [2009] NSWIRComm 108 Newcastle Master Builders' Association, Re [2007] NSWIRComm 57 Seamens' Union of Australia [NAME], Re [2001] NSWIRComm 151; 107 IR 90

HEARING DATES: 18 February 2010

DATE OF JUDGMENT: 26 March 2010

[NAME] (Applicant) LEGAL REPRESENTATIVES: Senior Industrial Officer The Master Builders' Association of New South Wales

JUDGMENT:

INDUSTRIAL COURT OF NEW SOUTH WALES

CORAM: [NAME], President

Friday 26 March 2010

Matter No IRC 2051 of 2009

THE MASTER BUILDERS' ASSOCIATION OF NEW SOUTH WALES

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

Matter No IRC 2052 of 2009

THE MASTER BUILDERS' ASSOCIATION OF NEW SOUTH WALES

JUDGMENT

[2010] NSWIRComm 39

1 The Master Builders' Association of New South Wales ('the [NAME]') has made two applications pursuant to section 288 of the Industrial Relations Act 1996 ('the 1996 Act'). 2 The applications were made in response to the following orders in The Master Builders' Association of New South Wales (No 2) [2009] NSWIRComm 108 ('the 2009 judgment'): …

(h) that the [NAME] takes all necessary steps within six months of the date of this judgment to address any invalidity which may have occurred in an election in [NAME] from the date of their registration under the 1991 Act up until 2004; and

3 The applications in matters IRC 2051 and IRC 2052 of 2009 address invalidities occurring in the years 2002 and 2003 respectively. The 2009 judgment had previously considered invalidities occurring in 2004, 2005 and 2006, while invalidities of 2007 were dealt with in The Master Builders' Association of New South Wales [2008] NSWIRComm 159.

4 These proceedings arose as a result of a report by the [NAME] to the Industrial Court filed on 29 February 2008 identifying four substantive failures by the [NAME]. The first two of these related to failures to comply with rules and procedures for the election of office holders: …

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

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

12. Rule 14 of [NAME]'s rules constitutes a Council of Management of [NAME], with officers to be elected annually.

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

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

15. [NAME]'s sub-rule 14.24 provides, subject to certain criteria, that persons elected to office in a related [NAME] registered under Federal industrial legislation may be taken to be elected to corresponding offices in the [NAME]. The Master Builders' Association of New South Wales has never lodged with the [NAME] the documents required for sub-rule 14.24 to operate. 5 The latter two failures related to the lodgement of financial accounts and returns under s 278 of the 1996 Act:

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

17. Relevantly, those provisions provide that State-registered organisations must: (a) prepare certain accounts and certificates as soon as practicable after the end of the financial year of [NAME] (section 510 of the 1991 Act and clauses 58 - 59 of the 1992 Regulation);

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

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

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

(e) lodge copies of the accounts and financial statements with the [NAME], under cover of a certificate by the Secretary of [NAME], within 14 days of their presentation to such a meeting (s 518 of the 1991 Act and cl 64 - 65 of the 1992 Regulation). 18. Preserved subsection 10 of section 518 of the 1991 Act provides that an [NAME] must not fail to comply with the section.

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

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

21. No financial accounts were lodged with the [NAME] in relation to the financial years ended 30 June 1997 or 1998.

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

23. No financial accounts have been lodged with the [NAME] in relation to the financial years ended since 30 June 2000.

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

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

6 The applications were the subject of a hearing on 18 February 2010. [NAME] represented the [NAME]. Both applications were supported by affidavits of [NAME], Executive Director of The Master Builders Association of the New South Wales. The applications sought the following orders pursuant to s 288 of the 1996 Act: (a) That an invalidity occurred in 2002 [2003] when the applicant [NAME] failed to apply to the [NAME] to conduct ballots, or to obtain the approval of the [NAME] for a declaration that persons be declared elected to offices.

(b) That in 2002 [2003] The Master Builders Association of New South Wales, the applicant [NAME], failed to lodge copies of the accounts and financial statements for the [NAME] with the Registrar.

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

(d) Orders to validate all acts, matters or things rendered invalid by or because of the invalidities found to exist pursuant to Section 288 of the Act. 7 The applications identified three invalidities with respect to 2002 and 2003: (a) Failure in 2002 [2003] to apply to the [NAME] to arrange for the conduct of ballots to fill offices in the [NAME]. This includes failure to lodge duly audited financial accounts and the failure to lodge related Certificates and an Auditor's Report.

(b) Failure in 2002 [2003] to obtain the [NAME]'s approval under Rule 14.24.1 of the [NAME]'s rules permitting persons elected to office in a related [NAME] to be validly elected to corresponding offices in the [NAME].

(c) Consequent failures in the management and administration of the [NAME] involving the making of decisions and the taking of actions by persons not validly elected to offices of the [NAME] as well as the calling and conduct of Council of Management and Executive Committee meetings. 8 Given the similarity of applications IRC 2051 and 2052 of 2009, these matters will be addressed jointly.

Grounds 9 The [NAME] outlined the following grounds supporting the applications: 1. The rules of the [NAME] were certified 22 December 1995 in accordance with the Industrial Relations Act 1991.

2. This application deals with the operations of the [NAME] during the financial year ending 30 June 2002 [30 June 2003], and subsequently following the Annual Meeting of the corporate and Federally registered entity held on 12 December 2002 [12 December 2003].

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

4. Attached to this application is the Annual Report for the financial year ended 30 June 2002 [30 June 2003] of Master Builders Association of [COMPANY]. (ABN 11 [PHONE]) (the economic entity). The controlling entity is The Master Builders Association of New South Wales (ABN 96 550 042 906) an [NAME] then registered under Chapter 8, Part 3 Division 5 of Schedule 1 Registration and Accountability of Organisations. Documents accompanying the Annual Report indicate the entity's compliance with preserved provisions of the Industrial Relations Act 1991 and Industrial Relations Regulations 1992.

5. The attached Affidavit of the Executive Director deals with the operations of the entity established under the corporate law, and the relationship between the [NAME] and [NAME] registered under the Workplace Relations Act 1996. It also deals with associated matters of fact.

6. [NAME] and its members have acted in good faith:- (i) The invalidities did not arise as a result of a knowing and deliberate acts on the part of the officers of the [NAME];

(ii) The invalidities arose due to inadvertence; and,

(iii) The officers of the [NAME], upon appreciating the omissions, took the steps available to them to rectify the deficiencies in the affairs of the [NAME].

7. The Orders sought will do no substantial injustice to the [NAME], or any member or [NAME] of the [NAME] or any person having dealings with the [NAME]. (i) The audited accounts for The Master Builders Association of New South Wales are those accounts for ABN 11 [PHONE] [ABN 96 550 042 906]; these are attached to this application.

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

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

8. The [NAME] is not aware of any member having any grievance or objection to the manner in which persons named have assumed office. 9. The Orders sought will: - (i) rectify the invalidities that have occurred;

(ii) modify the consequences in law of the invalidities; and,

(iii) validate any act, matter or thing rendered invalid by or because of the invalidity. " The Orders sought will ensure that the applicant [NAME] continues to represent its members in the manner regulated by the Act. It is clear that the group of sections constitute an attempt by the legislature to provide methods whereby the legal and effective functioning of organisations can be secured and to end the difficulties which have arisen in arbitral jurisdictions where there has been a failure on the part of organisations properly to comply with the rules. In considering whether it is appropriate to exercise the wide jurisdiction given to us, we must clearly have regard to the objects of the Act. We are satisfied that Orders made with a view to enabling an [NAME] to function and operate effectively and legally will assist in achieving these objects and it will be appropriate to make such an order ." [ [NAME]' Union of Australia [NAME] [2001] NSWIRComm 151 per [NAME] citing with approval [NAME] in Re Australian Building Construction Employees' and Builders' Labourers' Federation (1978) 46 FLR 308]

10. The Orders would have the effect of enabling the [NAME] to function and operate effectively and legally.

11. The Orders would permit the [NAME] to function effectively as a representative body of its members in industrial relations and will rectify the potential effects of a "technical" deficiency. " 31 Before concluding, however, I should refer to a number of the cases referred to in the 2001 Judgment of the Vice-President which have been noted earlier. His Honour in that judgment referred to a number of the decisions as to the counterpart provisions in the then Conciliation and Arbitration Act, including the Judgment of J B Sweeney J in Australia Building Construction Employees & Builders' Labourers' Federation (1978) 46 FLR 488, and the Judgment of [NAME] in [NAME] (1998) 79 ALR 138."

"32 In both Judgments there are references to the detailed and broad powers conferred by the relevant statutory provisions and emphasis on the consideration that in deciding whether to exercise its discretion to make orders of validation, it is appropriate for the Court to have regard to the objects of the relevant statute. In that regard it was concluded that Orders made with a view to enabling an [NAME] to function and operate effectively and legally will assist in achieving those objects and it would be appropriate to make such orders if the Court can satisfy itself that such an order would not do substantial injustice to [NAME], any member or [NAME], or to any person having dealings with [NAME]. Indeed, [NAME] in the [NAME]' case put the matter even more highly when he said:

In determining whether to exercise its discretion in favour of making an Order, the Court should bear in mind the beneficial and enabling nature of the section. Unless there are sound reasons to refuse an order, it should be made."

"33 I consider that their Honours' views as to the approach to be adopted in the interpretation and application of the Commonwealth legislation equally applies here to the 1996 New South Wales statute." [ [NAME]' Association, [2007] NSWIRComm 57 per Wright J citing [NAME] in [NAME]' Union of Australia [NAME] as well as [NAME] in [NAME] (1998) 79 ALR 138.] (emphasis in original) Evidence

10 The [NAME] relied on the two affidavits of [NAME] sworn on 23 December 2009. They outlined the following with respect to the election of office holders:

In Matter No IRC 2051 of 2009: In terms of Rule 14.24.1 of the [NAME]'s rules: - (a) The membership of The Master Builders Association of New South Wales, then registered under the Workplace Relations Act 1996, is identical to the membership of The Master Builders Association of New South Wales registered under the Industrial Relations Act 1996.

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

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

(d) The name of [NAME] then registered under the Workplace Relations Act 1996 is the same as the name of the [NAME] registered under the Industrial Relations Act 1996.

(e) Relevant extracts of the respective rules are attached as Attachment 1 and Attachment 2 to this Affidavit.

(f) The 2002 election of office bearers of The Master Builders Association of New South Wales, then registered under the Workplace Relations Act 1996, was conducted by the Australian Electoral Commission on various dates in 2002. The ballot for President and Deputy President was declared on 3 December 2002. Details of the ballots conducted are included with this affidavit as Attachment 3.

(g) No separate ballot has been conducted to fill offices of the [NAME].

In Matter No IRC 2052 of 2009 In terms of Rule 14.24.1 of the [NAME]'s rules: - (a) The membership of The Master Builders Association of New South Wales, then registered under the Workplace Relations Act 1996, is identical to the membership of The Master Builders Association of New South Wales registered under the Industrial Relations Act 1996.

(f) Records relating to the conduct of the 2003 election of office bearers of The Master Builders Association of New South Wales have not been located to date. Details of the office bearers are set out in statutory declaration made by [NAME], Executive Director, on 16 March 2004. This declaration lists the office bearers of The Master Builders Association of New South Wales then registered under the Workplace Relations Act 1996. These office bearers were elected in a ballot conducted during November 2003. This affidavit is enclosed as Attachment 3.

(g) Comprehensive searches have been conducted over a period of a year in The Master Builders Association of New South Wales premises, and in other premises used to store archived records of the Association. These searches have been unsuccessful.

(h) No separate ballot has been conducted to fill offices of the [NAME]. 11 [NAME] identified the following regarding invalidities in the lodgement of returns:

Regarding the lodgement of an Outstanding Return of the [NAME] for 2002 [2003], and regarding the validation of certain invalidities in the management and administration of [NAME] and of certain decisions.

(a) Attached to the Application under Section 288 of the Act is the 2002 [2003] Annual Report for the Master Builders Association of New South Wales Pty Limited (the economic entity) (ABN 11 [PHONE]) . The controlling entity is The Master Builders Association of New South Wales (ABN 96 550 042 906), an [NAME] then registered under Chapter 8, Part 3 Division 5 of Schedule 1 Registration and Accountability of Organisations.

(b) The 2002 [2003] Annual Report attached was presented to the Annual General Meeting of the controlling entity, The Master Builders Association of New South Wales, held on 10 December 2002 [10 December 2003].

(c) The reporting entity concerned for purposes of the Corporations law and other federal laws was The Master Builders Association of New South Wales Pty. Limited (ABN 96 550 042 906). There is no separate entity for the purposes of the Corporations law covering the [NAME] registered under the Industrial Relations Act 1996.

(d) No separate set of accounts were maintained, or financial reports issued, for the [NAME] or for the federally registered [NAME]. (e) Also attached to the Application are Declarations made by the [NAME], Directors and Independent Auditors relating to both the full financial report and to a financial report covering operations of the economic entity only. A concise financial report was forwarded to members with the October / November 2002 [2003] edition of Association's journal "Executive Newsbrief" in accordance with what were then requirements of the Workplace Relations Act 1996.

(f) This process met with what was then a requirement of Chapter 8, Part 3 Division 5 of Schedule 1 Registration and Accountability of Organisations.

(g) Also attached to the Application under Section 288 of the Industrial Relations Act 1996 are: - (i) A Certificate issued by me as required by Section 518 of the Industrial Relations Act 1991;

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

(iii) Certificates issued by members of the [NAME] as required by Section 510(1) of the Industrial Relations Act 1991 and Regulation 59(1)(b) of the Industrial Relations Regulations 1992;

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

(v) A Certificate issued by the [NAME] of the controlling entity as required by Section 510(1) of the Industrial Relations Act 1991 and Regulation 59(1)(a) of the Industrial Relations Regulations 1992. 12 [NAME] further stated: Regarding the governance of the entity for purposes of the Corporations law and the entity then registered under the Workplace Relations Act 1996. (a) Both entities operated in accordance with the requirements of the Corporations law and of what was then Chapter 8, Part 3 Division 5 of Schedule 1 Registration and Accountability of Organisations.

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

(c) Based on this, the making of an Order under Section 288 will not do substantial injustice to the [NAME], any member or [NAME] of the [NAME]; or any person having dealings with the [NAME].

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

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

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

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

(iv) the officers of the [NAME], upon appreciating the omission, took the steps available to them to rectify the deficiencies in the affairs of the [NAME]. 13 [NAME]'s affidavits contained annexures, which differed in respect to each application and year in question. These annexures are as follows: Common Annexures 1. Extracts from Rules of the Federally Registered Entity: (i) Rule 14, Election of Officers, Council of Management, and Powers of Same; and

(ii) Rule 18, Election of Officers and Their Powers and Duties.

2. Extracts from Rules of the State Registered Entity: (i) Rule 14, Election of Officers, Council of Management, and Powers of Same; and

(ii) Rule 18, Election of Officers and Their Powers and Duties. Affidavit pertaining to activities in 2002:

(i) Covering letter dated 10 December 2002 from the Returning Officer, Australian Electoral Commission, to [NAME] attaching a declaration of results for elections for the positions of President and Deputy President;

(ii) Covering letter dated 18 October 2002 from the Returning Officer to [NAME] attaching; declaration of results for the positions of Councillors and four Vice-Presidents

(iii) Covering letter of 10 December 2002 from the Returning Officer to [NAME] attaching declaration of results for the positions of Councillors.

(iv) Covering letter dated 3 December 2002 from the Returning Officer to [NAME] attaching declaration of results for the positions of Councillors.

Affidavit pertaining to activities in 2003:

Statutory Declaration of Mr [NAME], Executive Director regarding Office Bearers of the Association [2003]. 14 The [NAME] further highlighted its rules as an association, specifically rules 14.3, 18.2 and 18.4 requiring the annual election of office holders to the roles of President, Deputy President, Vice-President and the council of management. 15 Rules 14.24.1 and 14.24.2 state: 14.24.1 At least One month prior to an election the President shall provide the [NAME] with a Statutory Declaration stating, if it be the case, that the membership of the [NAME] of the Master Builders Association of New South Wales registered under the Industrial Relations Act 1988 (the NSW Branch) and the membership of the Association are identical. At this time, the President shall also provide the [NAME] with a copy of the Rules of the NSW branch relating to the elections of the holders of offices and seek the Approval of the [NAME] that the persons elected to office in the NSW branch be validly elected to the corresponding offices of the Association.

14.24.2 Should the [NAME] grant such approval, the persons elected to offices of the NSW Branch shall be taken to be validly elected to the corresponding offices of the Association. 16 The reference in the above sub-rules to 'Association' is a reference to the [NAME], whilst the reference to 'the [NAME] of the Master Builders' Association of New South Wales' is a reference to the State branch of an [NAME] registered under federal industrial legislation.

17 The [NAME] attached the following documents to its application: 1. Certificate by [NAME] of a [NAME] under s 510(2) of the 1991 Act and s 282(3) of the 1996 Act dated 18 December 2009.

2. Statements of Particulars of Loans, Grants and Donations by an Officer of an [NAME] pursuant to s 280 of the 1996 Act (relating to years 2002 and 2003) dated 18 December 2009.

3. Auditor's Reports pursuant to s 514 of the 1991 Act and s 282(3) of the 1996 Act (relating to years 2002 and 2003) dated 21 December 2009.

4. Certificates by [NAME] pursuant to s 510(2) of the 1991 Act and 282(3) of the 1996 Act (relating to years 2002 and 2003) dated 17 December 2009 and 18 December 2009, respectively.

5. Certificate by [NAME] of a [NAME] under s 510(2) of the 1991 Act and s 282(3) of the 1996 Act dated 18 December 2009.

6. Financial Accounts for the year ending 30 June 2002 [30 June 2003].

Relevant statutory provisions

18 The applications were made pursuant to s 288 of the 1996 Act. Section 288 provides: 288 Commission may make orders in relation to consequences of invalidity

(1) An [NAME] of an [NAME] or any other person having a sufficient interest in relation to an [NAME] may apply to the Commission for the determination of the question whether an invalidity has occurred in: (a) the management or administration of [NAME], or

(b) an election or appointment in [NAME], or

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

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

(b) to negative, modify or cause to be modified the consequences in law of the invalidity, or

(4) Where an order is made under subsection (3), the Commission may give such ancillary or consequential directions, as it considers appropriate.

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

(b) any member or [NAME] of [NAME], or

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

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

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

(b) to an invalidity occurring in relation to an association before it became an [NAME].

19 Section 239 of the 1996 Act provides: 239 Rules may provide for elections for offices in State branch of [NAME] to be elections for purposes of [NAME]

(1) The rules of a [NAME] registered under this Chapter may provide that persons elected to offices in a State branch of a [NAME] are taken to be validly elected to the corresponding offices in the [NAME] registered under this Chapter if the [NAME] is satisfied that: (a) the membership of the State branch of the [NAME] and the [NAME] registered under this Chapter is identical or substantially similar, and

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

(2) The regulations may specify circumstances in which: (a) the membership of organisations is or is not substantially similar for the purposes of subsection (1) (a), or

(b) the rules of an [NAME] comply or do not comply substantially with the relevant provisions for the purposes of subsection (1) (b). (3) In this section, State branch of a [NAME] means a State branch of an [NAME] registered under the Workplace Relations Act 1996 of the Commonwealth. 20 Section 278 of the 1996 Act provides: 278 Records to be kept and lodged by organisations

(1) A [NAME] must keep the following records: (a) a register of its members, showing the name, postal address of each member and such other particulars as may be prescribed by the regulations, (b) a list of the offices in [NAME], (c) a list of the names, postal addresses and occupations of the persons holding the offices, (d) such other records as are prescribed by the regulations. (2) A [NAME] must: (a) enter in the register the name and postal address of each person who becomes [NAME], within 28 days after the person becomes [NAME], and (b) remove from the register the name and postal address of each person who ceases to be [NAME], within 28 days after the person ceases to be [NAME], and (c) enter in the register any change in the particulars shown on the register, within 28 days after the matters necessitating the change become known to [NAME]. (3) A [NAME] must lodge with the [NAME] once in each year, at such time as is prescribed by the regulations: (a) a statutory declaration by the secretary of [NAME] certifying that the register of members has, during the immediately preceding calendar year, been kept and maintained as required by subsections (1) and (2), and (b) a copy of the records required to be kept under subsection (1) (b), (c) and (d), certified by statutory declaration by the secretary of [NAME] to be a correct statement of the information contained in those records. (4) A [NAME] must, within 28 days, lodge with the [NAME] notification of any change made to the records required to be kept under subsection (1) (b), (c) and (d), certified by statutory declaration by the secretary of [NAME] to be a correct statement of the changes made.

(5) The records kept by a [NAME] under this section must be kept at the registered office of [NAME] or other place approved by the [NAME].

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

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

(8) If: (a) [NAME] of a [NAME] requests the [NAME] to give a direction under this subsection, and (b) the [NAME] is satisfied: (i) that the member has been refused access to the register of members, or a part of the register of members, of [NAME] at the office where the register is kept, or (ii) that there are other grounds for giving a direction under this subsection, the [NAME] may direct [NAME] to deliver to the [NAME], before a specified day, a copy of the register certified by statutory declaration by the secretary or other specified officer of [NAME] to be, as at a day specified in the certificate that is not more than 28 days before the first-mentioned day, a correct statement of the information contained in the register, for the member to inspect at the office of the [NAME].

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

Consideration

21 As stated previously, the applications and subsequent hearing arose as a result of failures by the [NAME] to comply with relevant provisions of the 1996 Act resulting in a report submitted by the [NAME] to the Industrial Court on 29 February 2008. As outlined in the 2008 judgment (at [19]-[20]): [19] It would appear the applicant was first registered under the Industrial Arbitration Act 1901 on 29 September 1906. The registration of the applicant was confirmed under Chapter 5 of the Industrial Relations Act 1991 ('the 1991 Act') on 22 December 1995, [NAME] having been regarded as a '[NAME]' taken to be registered pursuant to s 641 of the 1991 Act on its commencement. The [NAME] is to be taken to be an [NAME] registered under Chapter 5 of the 1996 Act pursuant to s 223(1) of that Act.

[20] As The Master Builders' Association of New South Wales was incorporated under section 421 of the 1991 Act, it is considered to be a "[NAME]" in terms of section 217 of the 1996 Act. Therefore, Part 4 of Chapter 5 of the 1996 Act (Regulation of State Industrial Organisations) is said to apply to [NAME]. The rules of the applicant registered on 22 December 1995 have remained unaltered except for a change of registered office address on 24 April 1996. The registered office of The Master Builders' Association of New South Wales is at Level 3, 51-[ADDRESS], Surry Hills, NSW, 2010. 22 The election of officers is addressed under the Industrial Relations (General) Regulation 2001 in accordance with s 249 of the 1996 Act, which allows regulations to deal with the election of officers to State organisations. Pursuant to cl 31 of the regulations the provisions of ss 442-451 of the Industrial Relations Act 1991 ('the 1991 Act') (and the regulations under those provisions) apply to a [NAME] as regulations made under s 249 of the 1996 Act. Rule 14 in the rules of the [NAME] constitutes Council of Management of [NAME], with officers to be elected annually. 23 Section 444(1) of the 1991 Act provided that to hold an election for an office in [NAME], the applicant must apply in writing to the [NAME] requesting the conduct of an election. There is no record of any such application by the [NAME] to the [NAME] in the years 2002 or 2003.

24 Rule 14.24 of the [NAME]'s rules, provides that the applicant may seek the approval of the [NAME] that the persons elected to office in the NSW branch of the [NAME] be validly elected to the corresponding offices of the applicant. Such documents have not previously been lodged with the [NAME] for 2002 or 2003. 25 Considering these failures to apply to the [NAME], in spite of obligations under the 1996 Act and [NAME]'s rules, and the aforementioned duties under the 1996 Act and the rules of [NAME] to hold annual elections, it is evident there were invalidities in the years 2002 and 2003 with respect to election.

26 Under s 288(1)(b) of the 1996 Act: (1) an invalidity occurred in 2002 and 2003 when the [NAME] failed to apply to the [NAME] to conduct elections to fill offices of the [NAME]; and

(2) an invalidity occurred in 2002 and 2003 when the [NAME] failed to obtain the [NAME]'s approval under Rule 14.24.1 of the [NAME]'s rules for persons elected to office in a related [NAME] to be validly elected to corresponding offices in the [NAME]. 27 Consequently, any action of the elected officers in the relevant years would be rendered invalid. However, for reasons of practicality, s 288(3) allows any invalidity to be rectified, negatived, modified or validated by the Court. The [NAME] is seeking the application of this provision to validate the invalidities associated with the 2002 and 2003 elections. 28 Further, the [NAME] seeks that the Court rectifies invalidities due to its failure to comply with s 287 of the 1996 Act and lodge financial statements for 2002 and 2003. The [NAME] gave evidence regarding its compliance with federal industrial regulations as a [NAME] in the same years.

29 Court orders under s 288 of the 1996 Act are made following consideration of affected parties and interests. Section 288(5) provides: (5) The Commission must not make an order under subsection (3) without satisfying itself that such an order would not do substantial injustice to: (a) [NAME], or

(b) any member or [NAME] of [NAME], or

(c) any person having dealings with [NAME]. 30 [NAME] addressed these concerns in his affidavits stating: In my capacity as Executive Director, I believe that: - (i) there is no reason to suppose that those responsible for the invalidity have acted other than in a bona fide manner;

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

(iv) the officers of the [NAME], upon appreciating the omission, took the steps available to them to rectify the deficiencies in the affairs of the [NAME]. 31 [NAME] submitted: The applications before you are also supported by a number of reasons. These include that the members of the Association and [NAME] itself has acted in good faith, that the invalidities did not arise as a result of a known and deliberate act, they were inadvertent acts and, upon having those omissions drawn to our attention, we have taken steps available to us - I might add in co-operation with the assistance of the Registry - to rectify those matters.

Further, we state in the applications that the orders sought will do no substantial injustice to the [NAME] or any member, [NAME] or any other person having dealings with the [NAME] to perhaps support that statement that the economic entity is the same in both cases and at that has functioned in accordance with all requirements of the Federal law over the period of time that these applications now before you cover. We also state in the affidavits that the [NAME] is not aware of any member having a grievance or objection to the manner in which persons named in the documents before you have assumed office. 32 I accept the evidence and submissions of the [NAME], its officers and representatives. There is no reason to suppose that the invalidities were advertent or that those responsible were not acting bona fide.

33 In its applications, the [NAME] relied on two authorities of this Commission. The first was the decision of [NAME], Vice-President, in [NAME]' Union of Australia [NAME] [2001] NSWIRComm 151; 107 IR 90 (at [38]-[40]):

[38] In Re [NAME] Union , [NAME] approached the court's discretion under 171C(2)(a) as follows (at 159): In determining whether to exercise its discretion in favour of making an order, the court should bear in mind the beneficial and enabling nature of the section. Unless there is sound reason to refuse an order, it should be made. [39] The broad discretion conferred under s288 (3) of the Act is extended by the provisions of s288 (4), which permits the Court, in circumstances where an order is made under s288 (3), to give such ancillary or consequential directions, as it considers appropriate.

[40] The discretion of the Court is, however, constrained by the provisions of s288 (5) of the Act which prevent the Court from making an order pursuant to s288 (3) unless the Court first satisfies itself that such an order would not do a substantial injustice to [NAME], any member or [NAME] of [NAME], or any person having dealings with [NAME]. 34 The [NAME] also relied on the judgment of Wright J, President, in [NAME]' Association [2007] NSWIRComm 57 (at [31]-[33]): [31] Before concluding, however, I should refer to a number of the cases referred to in the 2001 judgment of the Vice-President, which have been noted earlier. His Honour in that judgment referred to a number of the decisions as to the counterpart provisions in the then Conciliation and Arbitration Act , including the judgment of J B Sweeney J in Australia Building Construction Employees & Builders' Labourers' Federation (1978) 46 FLR 488, and the judgment of [NAME] in [NAME] (1998) 79 ALR 138.

[32] In both judgments there are references to the detailed and broad powers conferred by the relevant statutory provisions and emphasis on the consideration that in deciding whether to exercise its discretion to make orders of validation, it is appropriate for the Court to have regard to the objects of the relevant statute. In that regard it was concluded that orders made with a view to enabling an [NAME] to function and operate effectively and legally will assist in achieving those objects and it would be appropriate to make such orders if the Court can satisfy itself that such an order would not do substantial injustice to [NAME], any member or [NAME], or to any person having dealings with [NAME]. Indeed, [NAME] in the [NAME]' case put the matter even more highly when he said: In determining whether to exercise its discretion in favour of making an order, the Court should bear in mind the beneficial and enabling nature of the section. Unless there are sound reasons to refuse an order, it should be made.

[33] I consider that their Honours' views as to the approach to be adopted in the interpretation and application of the Commonwealth legislation equally applies here to the 1996 New South Wales statute. 35 I respectfully adopt the approaches of [NAME]' Union of Australia [NAME] and [NAME]' Association.

36 Given the above findings that there were failures by the [NAME] resulting in invalidities, and that validating orders will not be substantially unjust for any other parties, I am satisfied that the orders sought should be made allowing the [NAME] to "function and operate effectively and legally and assist in achieving the objects of the Act." 37 The judgments in 2008 and 2009 earlier referred to rectified invalidities occurring in 2004, 2005, 2006 and 2007. The situation has not changed with respect to these proceedings and the invalidities at issue in these applications should be similarly rectified. 38 The [NAME] also sought to address the Commission's orders in the 2009 judgment regarding invalidities in the years 1997 to 2001 (at [35]): …

(i) that the [NAME] takes all necessary steps within six months of the date of this judgment to file audited accounts for the financial years ending 30 June 1997, 1998, 2001, 2002 and 2003 when no such accounts were filed, and to address any invalidity which may have occurred during the financial years ending 30 June 1999 and 2000. 39 Whilst these proceedings have rectified the 2002 and 2003 invalidities, the [NAME] is unable to comply with the remainder of the orders. Due to a change in premises, records cannot be produced for the years preceding 2001. [NAME], in his affidavit, stated that a thorough search had taken place and it appears the records are lost. 40 [NAME] submitted: Now, without trying for one moment to excuse that situation I make two points: The first point is that over the period in question the Federally registered [NAME] fulfilled all requirements of both the Federal law, the Workplace Relations Act 1996 and also the Corporations Law. In simple terms there was no lapse of the internal governance in relation to the Federal operations, while there certainly was a lapse in relation to State obligations.

The other point that I would make is then, as now, the two entities were essentially the same. There is a common roll of members and a common set of accounts. [NAME], because it is a State based [NAME], you will appreciate that that is quite simply the most effective way for it to regulate its own internal operations.

On those bases the applicant requests that you take that into account in dealing with the omissions and oversights in relation to those years and give consideration to waiving the requirement to tender documentation.

This has been a lengthy and time consuming exercise for the Association. In the application it's given before you the Master Builders' Association of New South Wales has tendered all documentation currently accessible to it that is required to meet its statutory obligations under the Industrial Relations Act 1996 and Regulations made under that Act, New South Wales the 1991 Act, and it is on that basis that we ask that you in the first instance make the orders sought in relation to the years 2002 and 2003 and, also, that you take into account the explanations tendered by [NAME] and the affidavits tendered in consideration, in relation to the residual years for which no material has been submitted and no application made.

41 With respect to electoral invalidities in the referenced years, s 286 of the 1996 Act provides that after the end of four years from: an act; election; purported election; appointment or purported appointment; or the making or purported making or alteration or purported alteration of the rule, the act, election, purported election, appointment or purported appointment, or the making or purported making or alteration or purported alteration of the rule, is to be taken to have been done in compliance with the rules of [NAME]. Thus, the section effectively deems that after the end of four years, any act, election, etc., was done under [NAME]'s rules, thereby allowing the court to rectify the invalidities in the years preceding 2001. 42 In Geneff v Peterson (1986) 19 IR 40 at 76 [NAME], in addressing s 171F of the Conciliation and Arbitration Act 1904 (Cth), which was in similar terms to s 286 of the 1996 Act, stated: The purpose of the section is to relieve organisations of the burden of having their past administration examined in minute detail, and of old invalidities having continuing consequences.

For these reasons, in most cases, an act done by a purported governing body or a purported official will be held to fall within the section. 43 Section 287 provides that the aforementioned s 286 may be applied provided it would not do substantial injustice. Relying on the above analysis of the years 2002 and 2003 (and the earlier analyses of the years 2004 to 2007) and given the evidence in the proceedings, it is apparent that using the provision to rectify the same invalidities in earlier years would not do substantial injustice to any party.

44 In relation to the failure to produce copies of the accounts and financial statements for the years 1997 to 2001 in accordance with s 518 of the 1991 Act, s 521 of the 1991 Act (preserved by s 282(3) of the 1996 Act) provides that the [NAME] must inform the Court of the failure and the Court may suspend the registration of an [NAME] that fails to comply. 45 It is also noted that s 226(a) of the 1996 Act provides that the registration of an [NAME] may be cancelled where [NAME] has, inter alia, contravened the industrial legislation. However, the Commission is not to cancel the registration of an [NAME] on that ground (or other grounds in s 226(b)-(c)) unless the Commission considers that it is appropriate to cancel the registration in the circumstances because of the gravity of the case: s 227(2). 46 There is no basis to believe there are grounds for suspending or canceling the [NAME]'s registration because of a failure to fulfill financial and reporting obligations for the period 1997 to 2001. The [NAME] is a long established registered [NAME] in New South Wales and has made a concerted effort over the past three years to comply with the Court's orders. It would be unfair and unduly harsh to countenance suspension or cancellation because of old records that have gone missing and in respect of which no person will suffer a substantial injustice. Moreover, the evidence was that for the subject period the [NAME] was, in fact, the same entity as its federally registered counterpart, which had lodged the necessary returns in accordance with the provisions of the Commonwealth Act. In the circumstances, the Court will take no further action in relation to the period 1997 to 2001 in respect of the failure to fulfill financial and reporting obligations under the 1996 Act. Orders [ADDRESS] makes the following orders effective from the date of this judgment:

(1) That the Court determines, declares and orders that invalidities have occurred in the management or administration of The Master Builders' Association of New South Wales. (2) That the Court determines, declares and orders that invalidities have occurred in elections in The Master Builders' Association of New South Wales. (3) That upon the basis of such invalidities, the Court, being satisfied that the following orders made do not do substantial injustice to The Master Builders' Association of New South Wales or to any member or [NAME] of that Association or to any person having dealings with the Association, orders: (a) that the effect or effects of the failure to make an application to the [NAME] in 2002 and 2003 under the preserved s 444 of the Industrial Relations Act 1991 regarding the conduct of ballot for offices of the [NAME] is negatived; (b) that the effect or effects of the failure to make an application to the [NAME] in 2002 and 2003 under Rule 14.24.1 of the [NAME]'s rules is negatived and rectified by declaring that persons elected to office in The Master Builders' Association of New South Wales, an [NAME] registered under the Workplace Relations Act 1996 (Cth), in the relevant ballots conducted by the Australian Electoral Commission in years 2002 and 2003 are declared to be validly elected to the corresponding offices in the [NAME]; (c) that any decisions made by the Executive Committee of the [NAME] when constituted by [NAME] and [NAME] from 12 October 2002 to the date of this order and any actions taken by [NAME] and [NAME] in the performance of their duties and functions as the Executive Committee of the [NAME] or in conformity with decisions of the Executive Committee of the [NAME] that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated;

(d) that any decisions made by the Executive Committee of the [NAME] when constituted by [NAME] and [NAME] from 12 October 2003 to the date of this order and any actions taken by [NAME] and [NAME] in the performance of their duties and functions as the Executive Committee of the [NAME] or in conformity with decisions of the Executive Committee of the [NAME] that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated; (e) that any decisions taken by the Council as constituted by persons declared to be elected to the Council by this order along with any actions taken by those persons so declared to be elected that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 are validated;

(f) that the actions of the [NAME] in filing audited accounts for the financial year ended 30 June 2002 and 30 June 2003 are validated; and

(g) that the [NAME], being unable to produce records in relation to any invalidity which may have occurred in an election in [NAME] from the date of its registration under the 1991 Act up until and including 2001, is taken to have conducted the elections in compliance with the rules of [NAME] pursuant to s 286 of the 1996 Act. ____________________________________

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