Dobinson v Crabb

[1990] HCA 34

HIGH COURT OF AUSTRALIA

Brennan, Dawson, Toohey, Gaudron and McHugh JJ.

DOBINSON v. CRABB

(1990) 170 CLR 218

9 August 1990

Constitutional Law (Cth)

Constitutional Law (Cth)—Inconsistency between Commonwealth and State laws—Commonwealth law cancelling registration of organization of employees under Conciliation and Arbitration Act—Property of deregistered organization to be held and applied in accordance with its rules subject to any order of Federal Court to satisfy debts—State Act providing for restriction of use of deregistered organization's funds—Order vesting funds in custodian—Conciliation and Arbitration Act 1904 (Cth), s. 143(6)—Builders Labourers' Federation (Cancellation of Registration) Act 1986 (Cth)—Builders Labourers' Federation (Cancellation of Registration—Consequential Provisions) Act 1986 (Cth), s. 4(1)—B.L.F. (De-recognition) Act 1985 (Vict.), s. 7(1).

Decisions

BRENNAN J. Gaudron J. sets out the circumstances which gave rise to proceedings before Marks J. in the Supreme Court of Victoria from which an appeal, now removed into this Court, was brought. The question is whether there is any inconsistency under s.109 of the Constitution between the laws of Victoria and the laws of the Commonwealth with respect to the title to and the possession, custody, control and application of property that was owned by The Australian Building Construction Employees' and Builders Labourers' Federation at the time of the cancellation of its registration as an organization under the Conciliation and Arbitration Act 1904 (Cth). Its registration was cancelled on 14 April 1986 by the Builders Labourers' Federation (Cancellation of Registration) Act 1986 (Cth).

2. In a case of supposed inconsistency, it is necessary to construe the relevant laws. Section 143(6) of the Conciliation and Arbitration Act is the relevant Commonwealth law: see Builders Labourers' Federation (Cancellation of Registration - Consequential Provisions) Act 1986 (Cth), s.4(1); Industrial Relations (Consequential Provisions) Act 1988 (Cth), s.6. Section 143(6) provides:
"Upon the cancellation of the registration of an

organization, the organization shall cease to be an organization and a corporation under this Act, but shall not by reason of the cancellation cease to be an association. The property of the organization shall, subject to any order which the Court, upon application by a person interested, may make with respect to the satisfaction of the debts and obligations of the organization out of that property, be the property of the association and shall be held and applied for the purposes of the association in accordance with the constitution and rules of the organization insofar as they can be carried out or observed notwithstanding the deregistration of the organization."

This provision takes effect "upon", and thus by reason of, "the cancellation of the registration of an organization". It provides for three distinct but related matters: first, the cessation of the corporation and the preservation of the association of those persons who were members of the organization; second, the transfer of the property of the corporation to the association; and, third, the application of that property.

3. By force of s.143(6), the corporation which comes into existence on registration of an organization (s.136) is dissolved on its deregistration, but the dissolution of the corporation does not dissolve the relationship inter se of the members of the organization: their association does not cease "by reason of the cancellation" of registration. Prior to the deregistration of an organization, the corporation, not its members, owns the property it has acquired: see s.136. But s.143(6) transfers the corporation's property upon cancellation, by providing that its property should "be the property of the association", that is, the property of the members of the association. That transfer is effected "upon" (that is, at the moment of) cancellation of registration, and s.143(6) effects the transfer to the members of the association who were members of the organization at that moment. At that moment the beneficial title to the organization's property vests in the members, but they do not take the beneficial title to the property absolutely nor, as we shall see, does the legal title necessarily vest in them.

4. The property is transferred to the members "subject to any order which the (Federal) Court ... may make with respect to the satisfaction of the debts and obligations of the organization out of that property". This is a wide power. As presently advised, I should think that the Court has jurisdiction to make, inter alia, an order vesting specific property in a creditor or obligee in satisfaction or partial satisfaction of a debt or obligation or an order creating a charge in favour of a creditor or obligee over specific property. If that be the nature of the power, the power must subsist so long as there is property in respect of which it can be exercised: that is, so long as there is property identifiable as property formerly belonging to the organization, transferred to the members of the association and available for application pursuant to s.143(6).

5. The property transferred to members by s.143(6) or the residue left after effect is given to the orders of the Court is not taken or held by them to be applied as they or a majority of them may wish. Subject to any orders which the Court might make, the property which is transferred to them is held and must be applied "for the purposes of (their) association" but "in accordance with the constitution and rules of the organization". Though the organization has ceased to exist, its property must be administered as its constitution and rules direct. The constitution and rules of the organization, as they stood at the moment of its deregistration - not the constitution and rules of the association as they may stand from time to time - govern the application of the erstwhile organization's property "insofar as (the constitution and rules of the organization) can be carried out or observed notwithstanding the deregistration of the organization." Although the constitution and rules of a registered organization contain a power of amendment, its exercise after deregistration cannot alter the constitution and rules of the organization, though it may alter the constitution and rules of the association of members. It is only when the constitution and rules of the organization cannot "be carried out or observed" that the constitution and rules of the association may govern the administration of the transferred property "for the purposes of the association". The constitution and rules of the organization can be carried out or observed so long as there is some object of the organization to be fulfilled. At least some of the objects of the organization may survive deregistration: in that event, the constitution and rules of the organization are, by force of s.143(6), the charter of administration of the transferred property. As the rules of a registered organization continue to apply to its property upon deregistration, the provisions of the Act which apply to the rules of registered organizations continue to affect, mutatis mutandis, the application of the property of an organization after its deregistration: see, for example, ss.133A, 133B. No doubt some difficult questions may arise in applying the constitution and rules of an organization as they stand at the moment of deregistration together with the relevant provisions of the Act which then affected them to the administration of the property transferred to the members upon deregistration of the organization. Nevertheless, the legislative intention is clear enough: it is to ensure that the liabilities of the corporate registered organization are transferred with the property out of which the liabilities are to be discharged and that any surplus is applied in accordance with the constitution and rules of the organization as they stood at the moment of deregistration. Section 143(6) thus prescribes a regime governing the administration of the property of a registered organization upon its deregistration and the application of that property. Such a provision is clearly incidental to the provisions under which registered organizations are brought into existence and given power to hold property. Section 143(6) falls comfortably within the power conferred by s.51(xxxv) of the Constitution. Indeed, the contrary was not argued.

6. Section 143(6) is not concerned expressly to vest the legal right to possession, custody or control of the property transferred in particular officers or trustees of the unincorporated association of members; those matters are governed by the rules of the organization which are required (s.140(1)(a)) to provide for "the mode in which the property of the association is to be controlled and its funds invested": see reg.115(1)(d)(ix). The possession and custody of funds and other property are comprehended within the mode of controlling property and investing funds for which the rules must provide. Where the bare legal title to a piece of the property of an organization was vested in a trustee prior to deregistration, s.143(6) does not disturb the legal title but, where the legal title was vested in the corporate organization, that title is vested by force of s.143(6) either in a trustee (where the constitution and rules of the organization so provide) or in the members as tenants in common. Wherever the legal title might be, the beneficial title is held subject to s.143(6) and must be applied as s.143(6) directs.

7. The relevant State law is to be found in Orders in Council dated 13 October 1987 and 10 November 1987. These Orders in Council were made under s.7 of the BLF (De-recognition) Act 1985 (Vict) as amended, retrospectively to 13 October 1987, by the BLF (De-recognition) (Amendment) Act 1987 (Vict). Section 7(1) reads thus in its amended form:
"For the purpose of protecting the rights of persons who
are or have ceased to be members of BLF, the Governor in Council may by Order published in the Government Gazette provide for the restriction or distribution of the use of funds or property of BLF and for the control, vesting and realisation of those funds or that property."

8. To construe s.7 and the Orders in Council, it is necessary to import the definition of "BLF" contained in s.3 of the De-recognition Act. The definition reads:

"'BLF' means - (a) the organization registered pursuant to the Commonwealth Act and known as The Australian Building Construction Employees' and Builders Labourers' Federation;

(b) ...; or (c) if at any time the registration pursuant to the Commonwealth Act of the organization referred to in paragraph (a) is cancelled - (i) the association within the meaning of the Commonwealth Act which was the organization referred to in paragraph (a) immediately before the cancellation of that organization's registration pursuant to the Commonwealth Act".

The definition may thus embrace both the registered organization (that is, the corporation) and the unincorporated association of the members of the organization at the moment of deregistration. The Order in Council of 13 October 1987 appoints Ian Gordon Sharp as "the Custodian" of the funds and property of BLF and arms him with certain powers. "Possession, custody and control" of BLF funds and property is committed to him (cll.1,5,6,7,8) and he is given exclusive power to authorize the payment or disposition of any of the funds or property of BLF or of any interest therein (cll.2 and 3) and power to "pay or direct any person to pay from the funds or property of BLF" sums which -

"appear to him in his absolute discretion to be desirable to be made for the carrying out of the ordinary and proper affairs of BLF and for the benefit of its members": cl.4.

Clause 9 of the Order in Council governs the continuation of this regime:

"Subject to any further Order in Council and so long as this Order or any extension thereof is in force the Custodian shall remain in possession custody and control of the property and funds of BLF for the purposes of carrying out the ordinary and proper affairs of the BLF pursuant to clauses 3 and 4 of this Order."

The Order in Council of 10 November 1987 provided, inter alia -

"2. The Custodian may vest in himself as Custodian any funds or property of BLF. 3. ... 4. The Custodian may pay out of the funds or property of BLF the costs, charges and expenses which he incurs or is put to in or about the carrying out of his powers or duties as Custodian, but not so as to include his remuneration or that of any of his assistants or employees, or any of his office costs, charges or expenses, or any costs, charges or expenses of any investigation into the affairs of the BLF. 5. The Custodian may pay out of the funds or property of BLF any debt or liability of BLF or of its members as such which is established to (his) satisfaction."

The term "funds or property of BLF" in s.7 and in the Orders in Council is open to two interpretations. It may mean property which belonged to the incorporated organization (see par.(a) of the definition of "BLF" in the De-recognition Act) or it may mean the property of the unincorporated association (see par.(c)(i) of the definition) whether acquired by force of s.143(6) of the Conciliation and Arbitration Act or otherwise. The latter interpretation is assumed to be correct by an Order in Council of 17 May 1988. That Order in Council excluded from the property of BLF which the Custodian was to take into possession, custody and control the money derived from "membership contributions or sustentation fees received by the Victorian Branch or the Federal office on or after 13 October 1987 or funds or property acquired by the use of such contributions or fees." Moreover, the power to make Orders in Council is expressed to be for "the purpose of protecting the rights of persons who are ... members of BLF" as well as the rights of persons "who have ceased to be" members of BLF. The class of persons who "are" members was added by the 1987 amending Act. In practice, it would be difficult to distinguish between property which had been transferred to the unincorporated association by force of s.143(6) and property subsequently acquired. In my view, the better interpretation of the term "funds or property of BLF" includes not only the property transferred by s.143(6) to members of the organization at the moment of deregistration - the subject matter of the Commonwealth Act - but also property of the unincorporated association subsequently acquired.

9. However, the inclusion of property acquired after deregistration is not significant to the question of inconsistency of State laws with s.143(6). The State laws prescribe a single regime of administration of the "funds or property of BLF", except for membership fees and sustentation contributions. The State regime is not expressed to be and is not intended to be divisible. It does not have a discrete operation with respect to each piece of property or to each category of property falling within the description "funds or property of BLF". If the State regime be inconsistent with the Commonwealth regime for the administration and application of property transferred by s.143(6), and if the State regime be invalid for the purposes of s.109 in its application to transferred property, it is impossible to attribute to it a valid operation with respect to property acquired by the association after deregistration. The State regime governing administration of "funds or property of BLF" is an entirety and, if it be inconsistent with a Commonwealth regime governing administration of a substantial part of "funds or property of BLF", the State law which prescribes the regime is inconsistent with the Commonwealth law which prescribes the Commonwealth regime. It would be otherwise if the property governed by the Commonwealth regime were so insubstantial a part of the property governed by the State regime that the exclusion of that part from the State regime would leave the State law in virtually full force and effect.

10. The appellants submit there is inconsistency between s.143(6) and the relevant State laws in three respects, namely,

"(i) committing possession, custody and control of funds and property to Dr. Sharp;

(ii) total prohibition on others dealing with property and funds;

(iii) very wide discretion vested in Dr. Sharp as to the use of funds and property."

The respondents submit that the State regime supervenes after s.143(6) has done its work, but that submission assumes that the operation of s.143(6) is exhausted, except in respect of orders made thereunder by the Court, once the property of the erstwhile organization is transferred. (It is accepted that the State regime operates subject to such orders as the Court might make.) The assumption is erroneous. True it is that s.143(6) of the Conciliation and Arbitration Act transfers the beneficial interest in the property of a registered organization to its members as soon as the organization is deregistered, but that does not exhaust the operation of s.143(6). If the operation of s.143(6) were exhausted the moment after deregistration, the jurisdiction of the Court to protect creditors and obligees of the registered organization would be illusory and, more importantly, the statutory injunction to apply the transferred property "for the purposes of the association in accordance with the constitution and rules of the organization" would have no field of operation. To allow full rein to the jurisdiction of the Court and to the statutory injunction as to the application of transferred property, s.143(6) must be held to operate so long as there is property which, having been transferred to the members of the deregistered organization, is available for application in accordance with the section. That property is available until it is disposed of in a manner which is consistent with s.143(6). If a person, not having authority under the constitution and rules of the organization to do so, purports to dispose of property transferred by s.143(6) or purports to do so otherwise than "for the purposes of the association" while the constitution and rules of the organization are capable of being carried out or observed, the purported disposition is ineffective except, perhaps, in a case where the members of the deregistered organization are estopped from denying the validity of the disposition. The Commonwealth regime remains in operation so long as the constitution and rules of the organization are capable of being carried out or observed.

11. So long as s.143(6) remains in operation, the constitution and rules of the deregistered organization prescribe the mode of control of the property transferred. The empowering of a custodian to take possession, custody and control of the property transferred and, a fortiori, the empowering of a custodian to vest any title to that property in himself are inconsistent with the mode of control prescribed by the organization's constitution and rules. It may be that, under either the Commonwealth or the State regime, the ultimate or residual beneficial title to the property transferred by s.143(6) is in the members of the deregistered organization, but its possession, custody and control are differently provided for under the respective regimes.

12. Moreover, the purposes for which the property may be disposed of are different under the respective regimes. Under the Commonwealth regime, the property may be applied only for the purposes of an association of the members of the deregistered organization and subject to that organization's constitution and rules. The erstwhile organization's property must be applied for the fulfilment of the objects of the organization until it is no longer possible to fulfil the objects of the organization. Under the State regime, the property may be applied to defray the costs, charges and expenses incurred by the Custodian and, in addition to the discharging of the organization's debts and liabilities, it may be applied to discharge the debts and liabilities of its members whether or not the constitution and rules of the organization authorize the discharge of its members' debts and liabilities out of the organization's property. Even if one leaves aside the power which cl.2 of the Order in Council of 10 November 1987 confers on the Custodian to vest property in himself, the State regime seeks to cover the mode of control, the purposes of application, and the authority to dispose of property transferred by s.143(6). The Commonwealth regime covers these matters, so that both sets of laws are "made for the same purpose": Viskauskas v. Niland (1983) 153 CLR 280, at p 295. If effect be given to the State laws, they would alter, impair or detract from the operation of s.143(6) which, together with s.140(1)(a), covers the matters for which the State laws provide; the State laws are accordingly invalid: Metal Trades Industry Association v. Amalgamated Metal Workers' and Shipwrights' Union (1983) 152 CLR 632, at p 648.

13. I would allow the appeal, set aside the judgment of Marks J. and declare that s.7 of the BLF (De-recognition) Act 1985 as amended, and the Orders in Council made thereunder are inconsistent with s.143(6) of the Conciliation and Arbitration Act 1904 and for the purposes of s.109 of the Constitution are invalid.

DAWSON AND McHUGH JJ. In 1986 the Builders Labourers' Federation (Cancellation of Registration) Act (Cth) cancelled the registration of The Australian Building Construction Employees' and Builders Labourers' Federation ("the BLF") as an organization under the Conciliation and Arbitration Act 1904 (Cth). Section 4(1) of the Builders Labourers' Federation (Cancellation of Registration - Consequential Provisions) Act 1986 (Cth), which came into operation immediately following the Builders Labourers' Federation (Cancellation of Registration) Act, expressly applied s.143(6) of the Conciliation and Arbitration Act to the cancellation of the BLF's registration. Section 143(6) provides:
"Upon the cancellation of the registration of an
organization, the organization shall cease to be an organization and a corporation under this Act, but shall not by reason of the cancellation cease to be an association. The property of the organization shall, subject to any order which the Court, upon application by a person interested, may make with respect to the satisfaction of the debts and obligations of the organization out of that property, be the property of the association and shall be held and applied for the purposes of the association in accordance with the constitution and rules of the organization insofar as they can be carried out or observed notwithstanding the deregistration of the organization."

2. Provision was made in Victoria under s.7 of the BLF (De-recognition) Act 1985 (Vict) for control of the funds and property of the BLF. That section was to come into operation upon a day to be fixed by proclamation, not before the earlier of two dates, one of which was the date of deregistration of the BLF. Deregistration took place on 14 April 1986 and s.7 of the BLF (De-recognition) Act was proclaimed to come into operation on 1 August 1986. Certain amendments, which were deemed to have come into operation on 13 October 1987, were subsequently made to the BLF (De-recognition) Act. Section 7(1), as amended, reads:
"For the purpose of protecting the rights of persons
who are or have ceased to be members of BLF, the Governor in Council may by Order published in the Government Gazette provide for the restriction or distribution of the use of funds or property of BLF and for the control, vesting and realisation of those funds or that property." On 13 October 1987, the Victorian Governor in Council made an order which, so far as is relevant, is in the following terms:

"1. Possession, custody and control of the funds and property of BLF is hereby committed to Ian Gordon Sharp (hereinafter called 'the Custodian'). 2. No person shall pay or dispose of any of the funds or property of BLF or of any interest therein, or create any encumbrance or charge in respect thereof, without the prior written consent of the Custodian. Any such payment disposition encumbrance or charge shall be void, at the option of the Custodian. 3. The Custodian may refuse to give consent referred to in clause 2 hereof if he in his absolute discretion is not satisfied that the payment disposition encumbrance or charge is desirable to be made for the carrying out of the ordinary and proper affairs of BLF and for the benefit of its members. 4. ... 5. ... 6. ... 7. The Custodian shall forthwith take possession custody and control of the funds and property of BLF."

By s.7(4) of the amended BLF (De-recognition) Act, the Order in Council was declared "to be and to always have been as valid as if enacted herein". Subsequently, by Order in Council dated 10 November 1987, it was provided that the "Custodian may vest in himself as Custodian any funds or property of BLF" and, by a further Order in Council dated 17 May 1988, cl.7 of the original order was amended by adding at the end of it the words "other than membership contributions or sustentation fees received by the Victorian Branch or the Federal office on or after 13 October 1987 or funds or property acquired by the use of such contributions or fees".

3. The appellants' submission is that s.7 of the BLF (De-recognition) Act, the Order in Council to which it gives legislative force and the subsequent Orders in Council are inconsistent with s.143(6) of the Conciliation and Arbitration Act and are, therefore, inoperative under s.109 of the Constitution to the extent of the inconsistency. In essence, the argument is that s.143(6) provides how the property of the BLF is to be dealt with upon deregistration and that the Orders in Council are inconsistent with that sub-section in committing that property to a custodian, in prohibiting others dealing with it and in vesting a wide discretion in the custodian as to its use. The inconsistency is said to arise from a direct conflict between the two sets of provisions or, alternatively, from an intention on the part of the Commonwealth to cover the field with its provision. The appellants experienced some difficulty in identifying the relevant field, but in the end it was said to be the fate of the association's property pending its re-registration as an organization under the Conciliation and Arbitration Act.

4. It is convenient to deal first with one separate aspect of the argument which was based upon a direct conflict said to exist between the Order in Council of 13 October 1987 and that part of s.143(6) which subjects the property of the association to any order which the Court may make with respect to the satisfaction of the debts and obligations of the organization out of that property. We see no conflict between the Order in Council and that part of s.143(6). The property of the organization is vested in the association, but subject to a liability to meet the debts and obligations of the organization which the Court (that is, the Federal Court: see s.118A) orders to be met. When the custodian took possession of the property of the association, he took it subject to that liability and would, therefore, be bound by any order which the Court might make. There is nothing in the Order in Council which denies such an obligation on the part of the custodian; its terms, insofar as they confer power upon the custodian to deal with the property of the BLF, are facultative and do not allow the custodian to disregard obligations properly incurred in relation to that property. Indeed, cl.2 contemplates the creation of encumbrances or charges over the property with the consent of the custodian. To our minds it is quite clear that, the property having come to the custodian subject to the contingent liability created by s.143(6), any obligations arising therefrom would bind the custodian. We should add that there is nothing in s.143(6) to prevent dealings in its property by the association or any other person having authority to deal in it in the absence of any order of the Court with respect to the satisfaction of the debts and obligations of the organization out of that property.

5. The submission that there is otherwise a direct conflict between the Commonwealth and State provisions and the submission that the Commonwealth has evinced an intention to cover the field, whilst put separately, really merge into the one contention. That is to say, if the appellants are right in their argument that s.143(6) says what is to happen to the property of the deregistered organization to the exclusion of any other legislative provision, then there is a conflict in both senses. But in our view what s.143(6) does is to provide for the destination of an organization's property upon deregistration. Thereafter, subject to any order of the Federal Court, the association, to which the property is destined by the sub-section, holds that property in accordance with the constitution and rules of the organization, but subject to the common or statutory law applying to unincorporated associations. Obviously, since deregistration takes the association outside the mechanism of the Conciliation and Arbitration Act, that law is primarily State law.

6. In Reg. v. Ludeke; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1985) 159 CLR 636, at p 647, this Court observed:
"It is firmly settled that it is incidental to
conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of one State to provide for the registration as organizations and consequential incorporation of associations of employees or employers which may thereby be enabled the better to play a part in the processes of conciliation and arbitration. It follows from the fact that the Parliament may make laws for the registration of such organizations and for the effect of registration that it may regulate and control the organizations which it has created and may provide for the cancellation of the registration for which its own statutes have provided." And, as Isaacs J. put it in Australian Commonwealth Shipping Board v. Federated Seamen's Union of Australasia (1925) 36 CLR 442, at p 453, the "step of establishing an organization may be retraced at any point".

7. Having retraced the step of establishing the BLF as an organization by cancelling its registration, the Commonwealth has not evinced any intention that the control of its affairs should thereafter remain exclusively within the Commonwealth legislative domain. No doubt it was incidental to the deregistration to provide that the association should not cease to exist and that the property of the organization should go to the association subject to a contingent liability for the debts and obligations of the organization. No doubt it was incidental to the deregistration to provide that the property should be held and applied for the purposes of the association in accordance with the constitution and rules of the organization insofar as they could be carried out or observed notwithstanding the deregistration. Some provisions contained in the constitution or rules of the organization may have related to its rights and duties as an organization registered under the Conciliation and Arbitration Act and may have no application to the unincorporated association. But so to provide does not establish the constitution and rules of the organization immutably as those of the association nor does it isolate the association from the law relating to associations in general or this association in particular. Indeed, the association having been taken out of the scope of the Conciliation and Arbitration Act, the constitutional power to do so would be lacking. In our view, s.143(6) was intended, subject to the matters for which it specifically provides, to place the BLF back in the position of an association existing within a legal framework outside that of the Conciliation and Arbitration Act, a framework which is liable to changes brought about by validly enacted laws, federal or State. In other words, s.143(6) of the Conciliation and Arbitration Act lays down no complete law for dealings with the property of a deregistered organization. On the contrary, recognizing the limited legislative powers of the Commonwealth upon such a subject matter, it assumes a body of law extending beyond its own provision.

8. In Stock Motor Ploughs Ltd. v. Forsyth (1932) 48 CLR 128 it was made clear that Commonwealth legislation providing for a particular subject may do so, either by choice or of necessity, in such a way that the provision "not only for its proper understanding but for its practical application, continue(s) to depend upon the whole content of the law of which it form(s) a coherent part": see per Dixon J. at p 137. In that case, the Bills of Exchange Act 1909 (Cth), whilst it dealt exhaustively with certain aspects of the law relating to bills and notes, nevertheless allowed the force and effect of those instruments to remain dependent upon State law, including State legislation. Similarly, in Ansett Transport Industries (Operations) Pty. Ltd. v. Wardley (1980) 142 CLR 237 it was held, as Stephen J. put it at p 246, that a right to terminate a contract of employment conferred by a certified agreement under the Conciliation and Arbitration Act was "not one which (was) capable of exercise regardless of the unlawfulness under State law of the ground for its exercise. On the contrary, it (was) a right the nature of which is to be understood against the background to its operation which general laws of the land, whether State or federal in origin, provide."

9. Upon deregistration the property of the BLF became the property of the association and was to be held and applied for the purposes of the association in accordance with the constitution and rules of the organization insofar as they could be carried out or observed notwithstanding the deregistration of the organization. That is to say, the rules of the organization, so far as applicable, were to be the rules of the association governing the manner in which it was to hold and apply its property or, at all events, the property which devolved upon it from the organization. But there is nothing to indicate that the purposes of the association or the rules imported from the organization were intended to endure in perpetuity, inviolate from change. Recognizing this difficulty, the appellants submitted that s.143(6) of the Conciliation and Arbitration Act was confined to preserving the situation of the association's property pending its re-registration as an organization. But, whilst an association might apply for re-registration, there is nothing in the Act requiring it to do so. It might choose not to do so and to remain unregistered or it might fail in its attempt to become re-registered. Once it is accepted, as we think it must be, that the association is free to change its constitution, rules or membership, even cause itself to be wound up, in accordance with any requirements imposed by law, it is to our minds an inevitable conclusion that changes governing the manner in which the association's property is to be held might be made by statute without conflict with s.143(6). That sub-section governs the manner in which the property of the association is to be held upon devolution from the organization but, once the devolution has occurred, that sub-section makes no further provision in relation to that property, save in relation to the satisfaction of the debts or obligations of the organization upon the order of the Court.

10. In our view, s.143(6) was intended to serve a restricted purpose, the achievement of which involves no conflict with s.7 of the BLF (De-recognition) Act or the Orders in Council made pursuant to its provisions. We would dismiss the appeal.

TOOHEY J. The history of this matter and the relevant legislative provisions are set out in the judgment of Gaudron J.

2. The appellants contend that s.7 of the BLF (De-recognition) Act 1985 (Vic.) ("the De-recognition Act") and Orders in Council dated 13 October and 10 November 1987, made pursuant to s.7(1) thereof, are inconsistent with s.143(6) of the Conciliation and Arbitration Act 1904 (Cth). To determine whether there is any inconsistency, it is necessary first of all to reach some conclusions as to the meaning and operation of the latter provision. Although the Conciliation and Arbitration Act has been entirely replaced by the Industrial Relations Act 1988 (Cth), it was still in force at all relevant times.

3. Part VIII of the Conciliation and Arbitration Act, in which s.143 falls, carries the heading "Registered Organizations". Section 132 provides for the registration of the associations and persons therein described. Every organization registered under the Act shall, by virtue of s.136, "have perpetual succession and a common seal, and may ... own possess and deal with any real or personal property". Despite the absence of any express reference to corporate status, it is accepted that the provision is "quite enough to give to a registered organization the full character of a corporation": Fullagar J. in Williams v. Hursey (1959) 103 CLR 30, at p 52. This view is supported by the way in which the term "corporation" is used in s.143(6) itself. The term "association" is defined by s.4(1) to mean "any trade or other union, or branch of any union, or any association or body composed of or representative of employers or employees, or for furthering or protecting the interests of employers or employees".

4. Section 143(6) provides initially that, upon the cancellation of the registration of an organization, "the organization shall cease to be an organization and a corporation under this Act, but shall not by reason of the cancellation cease to be an association". Presumably, then, the body reverts to whatever status it had immediately before registration under the Conciliation and Arbitration Act. In most if not all cases, this would have been an association of individuals, possessing no corporate status. Registration under the Trade Unions Acts of the States and their equivalents does not confer the character of a corporation. In Waterside Workers' Federation of Australia; Ex parte Attorney-General for Commonwealth of Australia; Ex parte Industrial Registrar (1917) 11 CAR 600, at pp 603-604, Higgins J. spoke of deregistration in these terms:
"I think I am empowered to deregister an organization,
to put it back into its former state of a mere loose unincorporated association".

5. If it were not for the balance of sub-s.(6), the Conciliation and Arbitration Act would have nothing to say as to the affairs of a deregistered organization, save that cancellation does not "relieve the organization or any member thereof from any penalty or liability incurred prior to the cancellation": s.143(4). See also s.143(5). But it is the balance of sub-s.(6), which is not happily worded, that has given rise to the present difficulties. It is helpful to set out the words in question.
"The property of the organization shall, subject to any
order which the Court, upon application by a person interested, may make with respect to the satisfaction of the debts and obligations of the organization out of that property, be the property of the association and shall be held and applied for the purposes of the association in accordance with the constitution and rules of the organization insofar as they can be carried out or observed notwithstanding the deregistration of the organization." (While s.298 of the Industrial Relations Act spells out with greater precision the consequences of cancellation of registration, the language of s.143(6) of the Conciliation and Arbitration Act is still to be found in s.298(f) and (g) of the current statute.)

6. There is nothing in Pt VIII of the Conciliation and Arbitration Act, or indeed elsewhere in that Act, to support an argument that s.143(6) is intended to have merely a temporary operation, pending the re-registration of the association under the provisions of the Act. While s.143(6) would, of course, apply to an association which, while deregistered, pursued an application for re-registration and was successful in that regard, the sub-section applies equally to an organization which has been deregistered and which does not seek re-registration or which fails in such an attempt.

7. The Conciliation and Arbitration Act does not seek to control the affairs of the association or its property, other than to say that the property of the organization shall be the property of the association and be held and applied for the purposes of the association in accordance with the constitution and rules of the organization in so far as they can be carried out or observed notwithstanding deregistration. The Act does not attempt to control the constitution and rules of the association; clearly the association may alter its constitution and rules to the extent that the general law permits it to do so. Nevertheless, the choice of language "the property of the association and ... the purposes of the association in accordance with the constitution and rules of the organization" (emphasis added) must be taken to have been deliberate. A distinction is drawn. No doubt, one reason was to protect the interests in that property of those who were members of the organization, for the property is to be held and applied for the purposes of the association in accordance with the constitution and rules of the organization, although in the qualified manner described in s.143(6). Even so, the notion of protecting the interests of former members, when the property is to be held and applied for the purposes of the association (albeit in accordance with the constitution and rules of the organization) has obvious difficulties. For instance, there may not be a coincidence of membership.

8. What is clear is that the sub-section gives some measure of protection to those to whom the organization was indebted or obliged; they, of course, need have had no connection with the organization, other than a commercial one. In this regard the sub-section does not merely assume the existence of jurisdiction in the Federal Court. It must be taken to confer jurisdiction, for nowhere else is that jurisdiction asserted.

9. The exercise of the power of the Federal Court to make an order with respect to the satisfaction of the debts and obligations of a deregistered organization is ambulatory. The sub-section does not purport to prohibit any disposition by the association of its property, again so long as that is made for the purposes of the association in accordance with the constitution and rules of the organization. But the sub-section says nothing as to the consequences of a disposition that is not made in accordance with the constitution and rules of the organization. In particular, nothing is said that would interfere with the rights of persons who acquire property which was the property of the deregistered organization and has become the property of the association.

10. Section 7(1) of the De-recognition Act provides:
"For the purpose of protecting the rights of persons who
are or have ceased to be members of BLF, the Governor in Council may by Order published in the Government Gazette provide for the restriction or distribution of the use of funds or property of BLF and for the control, vesting and realisation of those funds or that property." The intent of the sub-section is clear enough, namely, to protect the rights of persons who are or have ceased to be members of BLF. Any order made pursuant to the sub-section must be made for that purpose.

11. The Order in Council of 13 October 1987 commits possession, custody and control of the funds and property of BLF to Ian Gordon Sharp, called "the Custodian": cl.1. It prohibits the payment or disposition of any of the funds or property of BLF or of any interest therein, or the creation of any encumbrance or charge in respect thereof, without the prior written consent of the Custodian: cl.2. The Custodian may refuse to give consent if, in his absolute discretion, he is not satisfied that such payment, disposition, encumbrance or charge is desirable to be made for the carrying out of the ordinary and proper affairs of BLF and for the benefit of its members: cl.3. He is also empowered to pay or direct any person to pay from the funds or property of BLF such sum as appears to him, again in his absolute discretion, to be desirable to be made for the carrying out of the ordinary and proper affairs of BLF and for the benefit of its members: cl.4. The Order in Council of 13 October 1987 was given legislative effect by s.7(4) of the De-recognition Act, introduced by way of amendment in 1987.

12. The Order in Council of 10 November 1987, supplemental to the Order of 13 October, further enlarges the power of the Custodian. Clause 2 gives the Custodian a discretion to "vest in himself as Custodian any funds or property of BLF"; subsequent clauses confer powers in relation to litigation and investigations into the affairs of BLF.

13. The appellants allege direct inconsistency between s.143(6) of the Conciliation and Arbitration Act, on the one hand, and s.7 of the De-recognition Act and the two Orders in Council made pursuant to s.7(1) thereof, on the other. The grounds on which this inconsistency is based appear to be as follows:

1. That full rights of ownership of property conferred, it is said, on the association by s.143(6) are derogated from by committing "possession, custody and control" of BLF money and property to the Custodian by cl.1 of the Order in Council of 13 October 1987; 2. That the Custodian's discretion to vest BLF funds or property in
himself, conferred by cl.2 of the Order in Council of 10 November 1987, is similarly incompatible with the association's full rights of ownership; 3. That the Commonwealth requirement that the property and funds of
the deregistered organization be administered in accordance with the association's constitution and rules is inconsistent with the wide discretion given to the Custodian by cl.4 of the Order in Council of 13 October 1987 (see also cll.3 and 5) to pay from the funds or property of BLF such sum as appears to him "to be desirable to be made for the carrying out of the ordinary and proper affairs of BLF and for the benefit of its members"; 4. That there is incompatibility between the jurisdiction conferred
on the Federal Court by s.143(6) to make an order with respect to BLF property and the wide discretion vested in the Custodian, as mentioned in 3. above (cll.4 and 5 of the Order in Council of 13 October 1987) to deal with the same property and funds.

14. In my view, none of these arguments should prevail. They give to s.143(6) a wider operation than it is intended to have or does have. The opening words of the sub-section free the deregistered organization from the operation of the Conciliation and Arbitration Act. The concluding words of the sub-section emphasize that what was the property of the registered organization is now the property of the unregistered association, subject to a power in the Federal Court to make orders affecting that property, at the suit of a person to whom the organization was indebted or otherwise under some obligation. In saying that the property of the association is to be "held and applied for the purposes of the association", sub-s.(6) does not seek to control the affairs of the association; in particular, it does not seek to control the disposition of its property. Clearly, any attempt to do so would run into constitutional difficulties. The words in question merely emphasize that the property of the organization is now the property of the association, to be dealt with by it for the purposes of the association, albeit in accordance with the organization's constitution and rules in so far as they can be carried out or observed. The meaning and scope of these words is not assisted by the use of the passive voice. But it is clear that the sub-section is not a charter of the rights and obligations of deregistered organizations. It is a direction to the association (in truth, a direction to its members) as to its dealings with property which, hitherto, had been the property of the organization. In my view, it does not speak to others, save as to the power of the Federal Court to make the orders there mentioned. Apart from the direction to the association as to how it shall deal with the property, the sub-section is silent as to the operation of the general law (common law and statute) so far as it may affect unincorporated associations. None of this is to say that s.143(6) speaks once and for all at the moment of cancellation of registration. I accept that the sub-section has a continuing operation, but within the limitations indicated in these reasons.

15. The Order in Council of 13 October 1987, committing the property of BLF to the Custodian, cannot oust the jurisdiction of the Federal Court to make an order in respect of that property in favour of a creditor of the organization. The constitutionality of that jurisdiction was not challenged. But neither does the order purport to interfere with the jurisdiction of the Federal Court or indeed with the exercise of power by any court against the property of BLF. The powers conferred on the Custodian do not, and do not purport to, extend to such matters. The same may be said of the Order in Council of 10 November 1987. In empowering the Custodian to vest funds or property of BLF in himself "as Custodian", the order does not seek to interfere with the jurisdiction of the Federal Court.

16. There is nothing in s.7(1) of the De-recognition Act or in the Orders in Council of 13 October and 10 November 1987 which is directly inconsistent with s.143(6). And even if I had taken a different view of s.143(6), such that inconsistency could occur, the grounds of inconsistency alleged by the appellants (other than the first ground) exhibit potential inconsistency only, arising out of the existence of State powers potentially capable of being exercised with respect to property, the subject of the Commonwealth law. No inconsistency would arise unless the powers were actually exercised: see The Queen v. Winneke; Ex parte Gallagher (1982) 152 CLR 211, at p 221.

17. The appellants argue in the alternative that s.143(6) manifests an intention to "cover the field". Before Marks J., the field was identified by counsel for the present appellants in these terms, namely, "what is to happen (to the property which previously belonged to the organization) after the cancellation of registration pending an application for re-registration at a later date". The question of an application for re-registration must be put to one side; s.143(6) is not confined to such a situation, as has already been observed. For the reasons given by Gaudron J., s.143(6) does not relevantly cover the field. It is unnecessary to say more on that aspect.

18. It follows that the appeal should be dismissed.

GAUDRON J. The appellants are members of the Federal Management Committee of The Australian Building Construction Employees' and Builders' Labourers Federation ("the BLF"). The BLF was for many years registered as an organization of employees under the Conciliation and Arbitration Act 1904 (Cth). Its registration was cancelled on 14 April 1986 by force of s.3 of the Builders Labourers' Federation (Cancellation of Registration) Act 1986 (Cth). Consequential provisions were made by the Builders Labourers' Federation (Cancellation of Registration - Consequential Provisions) Act 1986 (Cth). One consequence provided by s.4(1) of the last-mentioned Act is that s.143(6) of the Conciliation and Arbitration Act should apply.

2. Section 143(6) of the Conciliation and Arbitration Act provides:
"Upon the cancellation of the registration of an
organization, the organization shall cease to be an organization and a corporation under this Act, but shall not by reason of the cancellation cease to be an association. The property of the organization shall, subject to any order which the Court, upon application by a person interested, may make with respect to the satisfaction of the debts and obligations of the organization out of that property, be the property of the association and shall be held and applied for the purposes of the association in accordance with the constitution and rules of the organization insofar as they can be carried out or observed notwithstanding the deregistration of the organization."

3. On the same day as the BLF was deregistered there came into force the BLF (De-recognition) Act 1985 (Vic.) ("the De-recognition Act"). That Act was later amended by the BLF (De-recognition) (Amendment) Act 1987 (Vic.) ("the Amendment Act"). As a result of the amendments then effected, s.7(1) of the De-recognition Act presently provides:
"For the purpose of protecting the rights of
persons who are or have ceased to be members of BLF, the Governor in Council may by Order published in the Government Gazette provide for the restriction or distribution of the use of funds or property of BLF and for the control, vesting and realisation of those funds or that property." Despite the syntax, it is reasonably clear that, pursuant to s.7(1), authority may be given to restrict the use of funds and property and/or to effect a distribution of the funds and property. An Order was made under s.7(1) of the De-recognition Act on 13 October 1987. By s.7(4) of the De-recognition Act (inserted by s.5 of the Amendment Act) that Order is "declared to be and to always have been as valid as if enacted herein".

4. The Order of 13 October 1987 relevantly provides:

"1. Possession, custody and control of the funds and property of BLF is hereby committed to Ian Gordon Sharp (hereinafter called 'the Custodian'). 2. No person shall pay or dispose of any of the funds or property of BLF or of any interest therein, or create any encumbrance or charge in respect thereof, without the prior written consent of the Custodian. Any such payment disposition encumbrance or charge shall be void, at the option of the Custodian. 3. The Custodian may refuse to give consent referred to in clause 2 hereof if he in his absolute discretion is not satisfied that the payment disposition encumbrance or charge is desirable to be made for the carrying out of the ordinary and proper affairs of BLF and for the benefit of its members. 4. The Custodian may pay or direct any person to pay from the funds or property of BLF such sum as appear to him in his absolute discretion to be desirable to be made for the carrying out of the ordinary and proper affairs of BLF and for the benefit of its members."

5. The appellants contend that s.7 of the De-recognition Act is inconsistent with s.143(6) of the Conciliation and Arbitration Act and is, by force of s.109 of the Constitution, invalid. The appellants brought proceedings in the Supreme Court of Victoria against the respondents, the Minister for Labour for the State of Victoria, the Custodian and the Attorney-General for Victoria, seeking a declaration of invalidity. In the Supreme Court it was argued that s.7 was invalid by reason of inconsistency with s.143(6) of the Conciliation and Arbitration Act and by reason that it infringed s.92 of the Constitution. The proceedings were heard by Marks J. and resulted in judgment for the defendants in the action (the respondents to the present appeal). An appeal to the Full Court of the Supreme Court was removed into this Court pursuant to s.40 of the Judiciary Act 1903 (Cth). In this Court the appellants relied solely on s.109 of the Constitution.

6. The argument on behalf of the appellants was made by reference to s.7(1) and (4) of the De-recognition Act and the provisions of the Order as earlier set out, no separate argument being made by reference to other ancillary provisions of the Order or by reference to s.7(2) and (3). It was argued that s.7 of the De-recognition Act is directly inconsistent with s.143(6) of the Conciliation and Arbitration Act in two respects. First, it was said that the provisions of s.7(1) and (4), allowing for the vesting of the funds and property of the BLF and providing for the Custodian to have custody and control of and a power to direct payment from those funds and property, are wholly inconsistent with ownership of the property by the association as provided by s.143(6) of the Conciliation and Arbitration Act. Secondly, it was put that cll.2 and 3 of the Order, requiring the Custodian's consent to the payment of any moneys or the disposition of the funds or property of the BLF, are directly inconsistent with the authority given by s.143(6) to the Federal Court of Australia to make orders "with respect to the satisfaction of the debts and obligations of the organization". Alternatively, it was argued that there is manifest in s.143(6) an intention to "cover the field", the field being identified as "what is to happen (to the property which previously belonged to the organization) after cancellation pending re-registration at (a) later date".

7. For the purposes of the appellants' first argument as to direct inconsistency, it may be accepted that the powers which may be granted and those which have been granted to the Custodian pursuant to s.7 of the De-recognition Act involve a derogation from the ordinary incidents of ownership. The critical consideration is whether, as argued on behalf of the appellants, s.143(6) of the Conciliation and Arbitration Act, by conferring ownership on the association and by providing that the property "be held and applied for the purposes of the association in accordance with the constitution and rules of the organization insofar as they can be carried out or observed notwithstanding the deregistration of the organization", constitutes a continuing guarantee of those ordinary incidents dating from the time of deregistration of the organization. As against that argument, it was put that s.143(6) operated once and for all to confer ownership on the association and that, having done so, its force was thereupon spent save for the authority of the Federal Court to make orders for the satisfaction of the debts and obligations of the organization out of that property. On the latter view, s.143(6), in directing that the property be held and applied as therein set out, merely operated to adapt the incidents of ownership to the fact that it was granted to an association which would have no constitution or rules but for the imposition by the sub-section of the constitution and rules of the organization.

8. The words "be held and applied for the purposes of the association in accordance with the constitution and rules of the organization insofar as they can be carried out or observed notwithstanding the deregistration of the organization" do not, of themselves, immediately convey a precise or clear meaning. Even allowing for a lack of clarity, there are, in my view, difficulties with each of the meanings contended for.

9. Section 143(6) makes three positive stipulations relating to an association consequent upon deregistration of an organization. First, it preserves the association which became registered as an organization and thereby became incorporated. See ss.132 and 136 of the Conciliation and Arbitration Act. Secondly, it grants ownership of the property previously belonging to the organization to the association, subject to such order as might be made by the Federal Court of Australia for the satisfaction, out of that property, of the debts and obligations of the organization. Thirdly, it provides that the property shall be held and applied in the particular manner therein specified.

10. In Reg. v. Ludeke; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1985) 159 CLR 636, at pp 650-651, this Court noted that s.143(6) of the Conciliation and Arbitration Act reinforced the view that the Building Industry Act 1985 (Cth) did "not affect the rights which the Federation has as an association, apart from those which result from its registration" and did "not empower the Minister ... to affect the property of the organization except to the extent necessary to provide for payment of its debts and liabilities". Although the Court was then directing attention to the Building Industry Act, the quoted observations, if understood as referring to the general rights of the association, are a convenient description of those elements of s.143(6) which are relevant to the present issue.

11. The silence of s.143(6) of the Conciliation and Arbitration Act as to the general rights of the association means that those rights are necessarily to be ascertained by reference to the general law. Indeed, it was not contended otherwise on behalf of the appellants. It may be taken that, whether by force of the provision in s.143(6) that "the organization ... shall not ... cease to be an association" or by reason of the provision as to the holding and application of the property which previously belonged to the organization, the association succeeds to the constitution and rules of the organization. But it may also be assumed that the constitution and rules are capable of amendment. Nothing in s.143(6) warrants an implication that the constitution and rules may not be amended in the manner provided by them immediately before deregistration. And the association, whether in respect of its constitution and rules or in respect of its activities, is not subject to the legislative restraints applicable to organizations registered under the Conciliation and Arbitration Act or its successor, the Industrial Relations Act 1988 (Cth). By amendment to the constitution or rules, the association may, from time to time, adopt new and different purposes from those which attended the organization.

12. Within the above context, if s.143(6) constitutes a continuing guarantee, it is necessarily a guarantee of authority to hold and apply the property only "for the purposes of the association in accordance with the constitution and rules of the organization etc.". Unless, by reason of s.143(6), the association is forever bound to the constitution and rules of the organization (a construction which is hardly to be adopted when the sub-section is silent as to the general rights of the association), the guarantee either ceases to exist if the association adopts new or different purposes which do not accord with the constitution and rules of the association or exists only for so long as a purpose of the association can be identified as one which attended the organization. On the other hand, the construction that would give to s.143(6) a once and for all operation, by which property is transferred to the association and, for that purpose, the constitution and rules of the organization are conferred on the association, would mean that the property out of which the Federal Court might make orders for the satisfaction of the debts and obligations of the organization could, in the meanwhile, be applied (so long as the general law permits) for such purposes as the association might from time to time adopt.

13. In my view neither of the constructions contended for gives appropriate recognition to the words "for the purposes of the association in accordance with the constitution and rules of the organization insofar as they can be carried out or observed notwithstanding the deregistration of the organization". The reason for the concluding words is not contentious. They give recognition to the fact that the purposes of the association will be less extensive than those of the organization by reason that it will not have the same status as the organization in relation to awards made under the Conciliation and Arbitration Act or its successor, the Industrial Relations Act. See s.143(5) of the Conciliation and Arbitration Act and s.4(2), (3) and (4) of the Builders Labourers' Federation (Cancellation of Registration - Consequential Provisions) Act. Similarly, by confining the purposes of the association for which the property may be held and applied "in accordance with the constitution and rules of the organization", the sub-section impliedly recognizes that the association's purposes may diverge from those of the organization and expressly limits the purposes for which the property is to be held and applied to those which attended the organization. In this way the sub-section treats the property which previously belonged to the organization as having been held or acquired for the purposes of the organization rather than of the association and, to some extent, protects the interest in that property of those persons who were members of the organization. And, to some extent, it protects the property out of which the Federal Court might order the payment of the organization's debts and liabilities by preventing its application for purposes which are different from those which attended the organization.

14. On the above construction two matters emerge. First, the provision as to the holding and application of the property which previously belonged to the organization does not constitute a continuing guarantee of ownership in a particular manner. Rather, it constitutes a limitation upon the purposes for which the property may be held or applied. Secondly, the words "for the purposes of the association etc." describe the purposes for which the property is to be held and applied. They do not provide the means of identifying those by whom it is to be held and applied. On that matter the sub-section is silent.

15. The matter was argued on behalf of the appellants on the basis that the funds and property to which s.7 of the De-recognition Act applies are identical with the property which was transferred to the association by s.143(6) of the Conciliation and Arbitration Act. This may be so in fact, but, as a matter of law, there is not necessarily an exact correspondence. The definition of "BLF" in the De-recognition Act is such that, when applied to s.7, s.7 operates on all property of the association, whether it previously belonged to the organization or whether it was later acquired by the association in its own right. Property acquired by the association in its own right after deregistration of the organization is unaffected by s.143(6) of the Conciliation and Arbitration Act. However, so far as s.7 operates with respect to property which previously belonged to the organization, the vesting of that property pursuant to s.7(1) would, and the granting of custody and control to the Custodian by the Order does, constitute a holding of that property. Similarly, the power to distribute that property constitutes a power to apply it. Nothing in the De-recognition Act (including the Order) permits for that holding and power to apply the property to be characterized other than as a holding and power to apply the property for the association. As s.143(6) is silent as to the identity of the person or persons who may hold and apply the property which previously belonged to the organization, there is no direct inconsistency in so far as s.7 of the De-Recognition Act authorizes that property to be held and applied for the association. The critical consideration is whether s.7 of the De-Recognition Act enables or authorizes it to be held and applied for purposes other than those stipulated in s.143(6) of the Conciliation and Arbitration Act.

16. Save for the limitation to be found in the words of s.7(1) which confer authority on the Governor in Council "(f)or the purpose of protecting the rights of persons who are or have ceased to be members of BLF" (which by virtue of the operation of s.3(c) refers to the association), that sub-section imposes no limit as to the purposes for which property the subject of an order as therein contemplated may be held or applied. The Order, in cll.3 and 4, limits the purposes for which the Custodian may consent to the application of property or may himself apply property to those which "appear to him in his absolute discretion to be desirable ... for the carrying out of the ordinary and proper affairs of BLF and for the benefit of its members". Whether application "for the benefit of its members" is a purpose of the association which accords with the constitution and rules of the organization was not explored in argument. Indeed the constitution and rules of the organization were not before the Court. However, by reason that the association may amend the constitution and rules received on deregistration of the organization, the "ordinary and proper affairs of BLF" may travel beyond those purposes of the association which accord with the constitution and rules of the organization. And, of course, s.7(1) itself may enable authority to be given for the property to be held and applied for any purpose, subject only to such limitation as is to be discerned from the purposes for which the Governor in Council is empowered to make orders thereunder. Accordingly, there is a direct inconsistency between s.7 of the De-recognition Act and s.143(6) of the Conciliation and Arbitration Act in so far as the former enables and/or authorizes the holding and application of property which previously belonged to the organization for a purpose of the association (whether presently existing or adopted in the future), not being a purpose which accords with the constitution and rules of the organization in so far as they can be carried out or observed following deregistration.

17. The appellants' second argument as to direct inconsistency proceeds on the basis that, if s.7 of the De-recognition Act is valid, the property which previously belonged to the organization is thereby put beyond the reach of any order which might be made by the Federal Court with respect to the satisfaction of the debts and obligations of the organization unless the Custodian gives his consent pursuant to cll.2 and 3 of the Order. The effect of s.143(6) is not to make the association liable for the debts and obligations of the organization, but, rather, to impress the property itself with liability for those debts and obligations to the extent that the Federal Court so orders. Questions could arise as to whether, and if so in what circumstances, property in the hands of a third party, the third party not being a person holding property on behalf of the association, would remain available for the satisfaction of the debts and liabilities of the organization. However, nothing in the De-recognition Act, or for that matter in the Order, puts the Custodian in the position of a third party in the sense that the property held by him is held other than on behalf of the association. And the effect of the De-recognition Act is that he takes, whether by vesting or by virtue of custody and control, only that which is or was the BLF's, which by virtue of s.3(c) denotes that which is or was the association's. So far as that involves property which previously belonged to the organization, it is property impressed with liability to satisfy the debts and obligations of the organization to the extent that the Federal Court orders. Clauses 2 and 3 of the Order must be read against the background that s.7 of the De-recognition Act does not authorize the conferral of a better title or a greater right or interest than that which the association possessed. So read, there is no requirement that the Custodian consent to that to which the property is already subject. So far as concerns the property which previously belonged to the organization, it was, is and will remain subject to the satisfaction thereout of the debts and obligations of the organization to the extent ordered by the Federal Court.

18. So far as a law of the Commonwealth and a law of a State are capable of simultaneous obedience, the test whether there is inconsistency between the two is whether there is to be discerned in the law of the Commonwealth an "intention (by the Parliament of the Commonwealth) to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed": Ex parte McLean (1930) 43 CLR 472, per Dixon J. at p 483. And, as his Honour there pointed out, there is no inconsistency if it appears "that the Federal law was intended to be supplementary to or cumulative upon State law".

19. On behalf of the appellants it was contended that there is to be discerned in s.143(6) of the Conciliation and Arbitration Act an intention to provide exclusively and exhaustively as to "what is to happen (to the property which previously belonged to the organization) after cancellation pending re-registration at (a) later date". It may at once be noted that nothing in the relevant legislation predicates the eventual re-registration of a deregistered organization. Rather, re-registration is a mere possibility, and one that is subject to certain restrictions. See ss.132 and 143A(5) of the Conciliation and Arbitration Act and s.5(1) of the Builders Labourers' Federation (Cancellation of Registration - Consequential Provisions) Act. In this context, no inference of an intent to legislate exhaustively and exclusively can be made by reference to the possibility of re-registration. On the contrary, the possibility that an association might not seek or, if it does so, might not obtain re-registration suggests that, save in so far as s.143(6) expressly provides otherwise, the association should be subject to the general law, including applicable State law.

20. The inference that s.143(6) of the Conciliation and Arbitration Act was intended to be supplemented by the general law, including applicable State law, is further supported by the fact that it is silent as to the identity of those who should hold the property for the association and as to the machinery matters necessary to effect a transfer of the indicia or instruments of title from the organization to the association. Unless these machinery matters are to be supplied by the general law, including applicable State law, s.143(6) has the effect, in the words of Stephen J. in Ansett Transport Industries (Operations) Pty. Ltd. v. Wardley (1980) 142 CLR 237, at p 246, of "creating a partial vacuum".

21. The above matters tell against any intention that s.143(6) of the Conciliation and Arbitration Act should be exhaustive and exclusive. Rather, they indicate an intention that the specific provisions thereby made with respect to the property which previously belonged to the organization should be supplemented by the general law, including applicable State law. Accordingly, the only inconsistency between s.7 of the De-recognition Act and s.143(6) of the Conciliation and Arbitration Act is a direct inconsistency in so far as the former enables and/or authorizes property which previously belonged to the organization to be held or applied for a purpose of the association which does not accord with the constitution and rules of the organization.

22. It is necessary to turn to the question whether s.7 of the De-recognition Act may operate to the extent that it is not inconsistent with s.143(6) of the Conciliation and Arbitration Act. As earlier appears, there is no inconsistency in so far as s.7 is concerned with property acquired by the association otherwise than from the organization following deregistration. Nor is there any inconsistency in so far as s.7 allows for the holding and application on behalf of the association of the property which previously belonged to the organization. The only inconsistency is that which arises in so far as s.7 enables and/or authorizes that property to be held and applied for purposes other than the purposes of the association which accord with "the constitution and rules of the organization insofar as they can be carried out or observed notwithstanding the deregistration of the organization".

23. By s.6(1) of the Interpretation of Legislation Act 1984 (Vic.) it is provided that:
"Every Act shall be construed as operating to the full
extent of, but so as not to exceed, the legislative power of the State of Victoria, to the intent that where a provision of an Act, or the application of any such provision to any person, subject-matter or circumstance, would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid provision to the extent to which it is not in excess of that power and the remainder of the Act and the application of that provision to other persons, subject-matters or circumstances shall not be affected."

24. A provision such as that in s.6(1) of the Interpretation of Legislation Act operates to preserve statutory provisions to the extent of their validity unless it appears that the remaining provisions would, in their substantive operation, have a different effect from that which they would have had if the provisions were to have stood in their entirety. See Bank of N.S.W. v. The Commonwealth (1948) 76 CLR 1, per Dixon J. at p 372. So far as s.7 of the De-recognition Act applies to property acquired by the association otherwise than from the organization following deregistration, its substantive operation is unaffected by its partial invalidity as to property acquired by the association from the organization by force of s.143(6) of the Conciliation and Arbitration Act. So far as the latter property is concerned, s.7 of the De-recognition Act has the same substantive operation save to the extent that authority may be or may have been conferred for the holding and/or application of that property other than for a purpose of the association which accords with the constitution and rules of the organization in so far as they can be carried out or observed notwithstanding deregistration. More particularly, no different effect is given to s.7 in so far as it enables and/or authorizes vesting of the property or the granting of custody of and control over or the distribution of the property. Within the bounds of a limitation that the property be held and applied for the purposes of the association which accord with the constitution and rules of the organization so far as they can be carried out or observed, s.7 of the De-recognition Act has a substantive effect no different from that which it would have if it stood in its entirety.

25. The appeal should be allowed. The judgment entered for the defendants in the action should be set aside. In lieu thereof it should be declared that s.7 of the De-recognition Act is invalid to the extent that it enables and/or authorizes the holding and application of the property which belonged to the organization previously registered as The Australian Building Construction Employees' and Builders' Labourers Federation under the Conciliation and Arbitration Act for a purpose other than a purpose of the association of the same name in accordance with the constitution and rules of the organization so far as they can be carried out or observed notwithstanding deregistration.

26. It is necessary, in the special circumstances of this case, to make special provision as to costs. As the appellants have succeeded in part on this appeal, there should be an order that one half of the costs of the appellants, both at first instance and on the appeal, be borne by the first and third respondents. As to the balance of the appellants' costs, there should be an order that same be paid out of the property of the association held by the second respondent.

Orders

Appeal dismissed with costs.