State of Victoria v Sutton

[1998] HCA 56

HIGH COURT OF AUSTRALIA

GAUDRON, McHUGH, GUMMOW, KIRBY AND HAYNE JJ

THE STATE OF VICTORIA  FIRST APPELLANT

THE HONOURABLE STEPHEN
GEORGE ALLEY  SECOND APPELLANT

and

JOHN DAVID SUTTON   FIRST RESPONDENT

CONSTRUCTION, FORESTRY,
MINING AND ENERGY UNION  SECOND RESPONDENT

The State of Victoria v Sutton (M5-1997) [1998] HCA 56

2 September 1998

ORDER

1. Appeal allowed.

1. Set aside the order of the Full Court of the Industrial Relations Court of Australia.

1. Remit the matter to the Full Court of the Industrial Relations Court of Australia to determine any remaining issues under a Notice of Contention in or to the effect of that filed by the respondents in this Court and dated 1 April 1997.

On appeal from the Industrial Relations Court of Australia

2.

Representation:

I G Sutherland QC with L Kaufman for the appellants (instructed by Victorian Government Solicitor)

S C Rothman SC with H Borenstein for the respondents (instructed by
R L Whyburn & Associates)

Notice:  This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

The State of Victoria & Anor v John David Sutton & Anor

Property – Vesting of property of unincorporated association in Custodian – Inability of association to dispose of property vested in Custodian.

Property – Disposition – Prohibition on disposition without prior written consent of Custodian – Disposition in breach of prohibition "void, at the option of the Custodian" – Whether disposition in breach of prohibition void or voidable.

Property – Option to avoid disposition – Manner of exercising option – Period of time in which option to be exercised – Method of communicating exercise of option.

Industrial law (Cth) – Registered organisation – Cancellation of registration – Effect upon property of organisation.

Words and Phrases – "void" – "option" – "election".

Builders Labourers' Federation (Cancellation of Registration) Act 1986 (Cth).

Builders Labourers' Federation (Cancellation of Registration Consequential Provisions) Act 1986 (Cth).

BLF (De-recognition) Act 1985 (Vic).

Workplace Relations Act 1996 (Cth), s 347.

Workplace Relations and Other Legislation Amendment Act 1996 (Cth), Sched 16.

1. GAUDRON, GUMMOW AND HAYNE JJ.   On 30 March 1994, the Australian Building Construction Employees' and Builders Labourers' Federation ("the BLF") entered into a written agreement ("the amalgamation agreement") with the Construction, Forestry, Mining and Energy Union ("the CFMEU").  This was expressed to bring about "an amalgamation and/or merger of the BLF into the CFMEU" so that "all assets and liabilities of the BLF shall merge with the assets and liabilities of the CFMEU".  At the date of the agreement the CFMEU was, and the BLF was not, an organisation of employees registered under the Industrial Relations Act 1988 (Cth) ("the 1988 Act")[1].

   [1]Since 25 November 1996 titled the Workplace Relations Act 1996 (Cth) ("the Workplace Relations Act"). See s 2(1) and cl 1 of Sched 19 of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth).

2. This case concerns the effectiveness of the amalgamation agreement in light of Orders in Council previously made under Victorian legislation, the BLF (De‑recognition) Act 1985 (Vic) ("the De-recognition Act"). A consideration of the issues requires some treatment of earlier federal legislation.

   The Commonwealth legislation

3. For many years, the BLF was an organisation of employees registered under the predecessor to the 1988 Act, the Conciliation and Arbitration Act 1904 (Cth) ("the 1904 Act"). The benefit of registration to the BLF was, among other things, the gaining, by force of the legislation, of the legal personality of a body corporate[2].

   [2]See Williams v Hursey (1959) 103 CLR 30 at 52; Dobinson v Crabb (1990) 170 CLR 218 at 233; ReMcJannet; Ex parte Minister for Employment, Training and Industrial Relations (Q) (1995) 184 CLR 620 at 635, 645-646.

4. During the pendency of deregistration proceedings against the BLF under special provisions of the Building Industry Act 1985 (Cth)[3], the Commonwealth Parliament enacted two further statutes dealing specifically with the BLF[4].  The first was the Builders Labourers' Federation (Cancellation of Registration) Act 1986 (Cth) ("the Cancellation Act") which came into operation on 14 April 1986. As the name suggested, the Cancellation Act by its own force (s 3) cancelled the registration of the BLF under the 1904 Act.

   [3]The validity of the Building Industry Act 1985 (Cth) was upheld in R v Ludeke; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1985) 159 CLR 636.

   [4]Their validity was upheld in Australian Building Construction Employees' and Builders Labourers' Federation v The Commonwealth (1986) 161 CLR 88.

5. The second statute was the Builders Labourers' Federation (Cancellation of Registration - Consequential Provisions) Act 1986 (Cth) ("the Consequential Provisions Act"). The Consequential Provisions Act took effect immediately after the Cancellation Act. It addressed the impact of cancellation of the registration upon, among other things, property belonging to the BLF. The Consequential Provisions Act provided essentially that, following the Cancellation Act, the property of the BLF was to belong to an unincorporated association and was to be held and applied in accordance with the constitution and rules of the unincorporated association. This was the effect of s 4(1) of that statute. This preserved in relation to the BLF the operation of s 143(6) of the 1904 Act[5]. Section 143(6) stated:

   "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."

   The term "association" was defined in s 4(1) of the 1904 Act 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".

   [5]The 1904 Act, including s 143(6), was repealed by s 3 of the Industrial Relations (Consequential Provisions) Act 1988 (Cth). The effect of s 6 of that statute was, notwithstanding the commencement of the 1988 Act, to continue the application of s 143(6) in relation to the cancellation of registration of the BLF as if the 1904 Act had not been repealed.

6. At the time of the enactment of the Cancellation Act and the Consequential Provisions Act, the property of the BLF included funds on deposit[6] and parcels of land under the provisions of the Transfer of Land Act 1958 (Vic) ("the Transfer of Land Act")[7]. The registered titles to the parcels of land (which were situated at 11 Lygon Street, 13‑15 Lygon Street Carlton and 8‑18 Orr Street Carlton) stood in the names of two (in one case) and three (in the other cases) officers or members of the BLF. Section 37 of the Transfer of Land Act forbade the entry in the register of any trusts.

   [6]It would appear that the value of the funds on deposit, as at 22 February 1995, was approximately $857,938.97.

   [7]It would appear that the value of the land was estimated at May 1988 as between $1.78 million and $1.95 million.

7. Section 143(6) is not without difficulties of application to the situation with respect to the BLF. The phrase therein "the property of the association" has no clear legal meaning if the body is unincorporated. Subject to any provisions of the rules of the organisation, for example providing for the vesting of property in trustees or in some other body, the property would be that of the members. The rules of the BLF, as they stood on 13 April 1986, spoke of the "supreme control" being "vested" in the members (r 8.1) and also provided (rr 15, 16) for the custody, control and management of the property of the BLF. However, as the Full Court of the Federal Court pointed out in Bacon v O'Dea[8], whilst the BLF retained its corporate status, there had been no practical necessity to have the title to property vested in trustees or in any other body.

   [8](1989) 25 FCR 495 at 503.

8. The better view is that upon cancellation of registration on 14 April 1986, the property then was held by those who were members at that date.  That is consistent with the conclusion which was reached by the Full Court of the Federal Court in Bacon v O'Dea[9] after consideration of the terms of the rules of the BLF and of decisions upon the general law, including Bacon v Pianta[10] and Re Goodson, deceased[11].  Further, in Dobinson v Crabb, Dawson and McHugh JJ said[12]:

   "[I]n 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 [1904 Act], that law is primarily State law."

   In the same decision, Gaudron J construed[13] s 143(6) as evincing 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". We turn to consider the particular laws made in Victoria.

   [9](1989) 25 FCR 495 at 504.

   [10](1966) 114 CLR 634.

   [11][1971] VR 801.

   [12](1990) 170 CLR 218 at 230.

   [13](1990) 170 CLR 218 at 246.

   The Victorian legislation

9. The De-recognition Act received the Royal Assent on 30 July 1985 and s 7 thereof commenced on 1 August 1986. Section 7(1) empowered the Governor in Council, by Order published in the Victoria Government Gazette, to "provide for the restriction of the use of funds or property of BLF and for the control of those funds or that property". Such an Order would, unless sooner revoked, cease operation on the expiration of six months from the date on which it came into force, although s 7(2) permitted the extension of the Order by further Order. Section 7(3) provided that[14]:

   "A person shall not contravene an Order made under sub‑section (1).

   Penalty: 100 penalty units."

   Other relevant provisions of the De‑recognition Act came into force before s 7, that is to say on 14 April 1986. This was the day the Cancellation Act and the Consequential Provisions Act came into operation.

   [14]Section 7(3) was later re‑numbered s 7(5) by the BLF (De‑recognition) (Amendment) Act 1987 (Vic) ("the 1987 Act").

10. Significantly, in s 3 of the De‑recognition Act "BLF" was defined to mean:

    "(a)   the organization registered pursuant to the Commonwealth Act^[[15]] and known as The Australian Building Construction Employees' and Builders Labourers' Federation;

    ...

    (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".

    [15]The "Commonwealth Act" was defined in s 3 of the De‑recognition Act to mean the 1904 Act as amended and in force for the time being.

11. The definition speaks of the present, although in some respects by reference to past events. The expression in par (c)(i) "the organization referred to" identifies the BLF as it existed before the cancellation of registration. The term "the association within the meaning of the [1904 Act]" identifies the consequences of the operation of s 143(6) of the 1904 Act and the general law upon the BLF. In this judgment, the term "BLF" is used to identify the organisation whose registration under the 1904 Act was cancelled and the unincorporated association in respect of which thereafter s 143(6) and the general law operated.

12. Section 11 of the De‑recognition Act provided that, unless certain events had by then occurred, that Act was to cease to have effect on the expiration of one year from the Royal Assent on 30 July 1985. However, ss 2(2) and 6 of the 1987 Act operated to repeal s 11 of the De-recognition Act from 30 July 1985. Accordingly, the operation of the De‑recognition Act was continued beyond 30 July 1986.

13. With effect from 13 October 1987, the 1987 Act amended s 7(1) of the De‑recognition Act so that it read:

    "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 opening words of s 7(1) disclose a particular statutory purpose.

14. In Dobinson v Crabb, Gaudron J said[16]:

    "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 [1904 Act]."

    [16](1990) 170 CLR 218 at 243. See also at 224 per Brennan J.

    The Order

15. In purported reliance upon the De‑recognition Act, the Governor in Council made an Order on 13 October 1987[17].  Clause 1 of the Order committed "[p]ossession, custody and control of the funds and property" of the BLF in a "Custodian", Dr Ian Gordon Sharp.  Clause 7 required the Custodian "forthwith" to "take possession custody and control" of such funds and property and cl 5 restricted the ability of other persons to deal with such property[18].  At that stage, the Order did not provide for the vesting of funds and property in the Custodian.  Clause 11 provided that no person was to "resist, hinder or obstruct" the Custodian performing his functions under the Order.  Clauses 2 and 3 stated:

    "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."

    It is upon the construction of these provisions that the present litigation largely turns.

    [17]Victoria Government Gazette, No S39, 13 October 1987.

    [18]By further Order in Council dated 17 May 1988, cl 7 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":  see Dobinson v Crabb (1990) 170 CLR 218 at 224, 228.

16. The Order was made the day before the enactment of the 1987 Act and on the day of the deemed commencement of the 1987 Act (13 October 1987). However, s 5(b) of the 1987 Act inserted a new s 7(4) of the De-recognition Act. This stated:

    "The Order in Council declared to be made pursuant to section 7 of this Act and section 5 of the Police Regulation Act 1958 and published in the Government Gazette on 13 October 1987 is hereby declared to be and to always have been as valid as if enacted herein."

17. Approximately one month later, on 10 November 1987, the Governor in Council made a Supplemental Order[19].  Clause 2 thereof empowered the Custodian to "vest in himself as Custodian any funds or property of [the] BLF".  The Supplemental Order conferred other additional powers on the Custodian, including a power to bring or defend legal actions (cl 3).  A further Supplemental Order was made on 22 December 1987[20].

    [19]Victoria Government Gazette, No S45, 10 November 1987.

    [20]Victoria Government Gazette, No S59, 22 December 1987.

18. It is clear that technical words are not necessary to give effect to the intention of a settlor to vest property upon an express private trust for persons taking beneficial interests in that property[21].  "Equivalent" expressions will suffice[22].  The same may be taken to be the case where the trust is created by statute and the intention is that of the legislature[23].

    [21]Re Armstrong, deceased [1960] VR 202 at 205.

    [22]Richards v Delbridge (1874) LR 18 Eq 11 at 14.

    [23]Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145 at 166.

19. The Supplemental Orders did not provide that the vesting of property in the Custodian was to be on "trust" for the members.  Further, the Supplemental Orders did not use equivalent expressions to indicate, for example, that the property,  when vested, was to be held "on behalf of" or for "the benefit of" the members[24].  The Custodian is thus not a trustee, in the ordinary sense, of the property which is vested in him.  It nevertheless may have been the case that obligations in the nature of a trust not for beneficiaries but for statutory purposes[25] attached upon the vesting of the property in the Custodian.  It is unnecessary to determine this question.  What is of importance for this appeal is that, once any particular funds or other assets were vested in the Custodian by this means, they were beyond the reach of any purported disposition thereafter by the BLF.  It could not then effectively deal in that which was already vested in the Custodian.

    [24]cf Workers Compensation Act 1958 (Vic), ss 35(1) and 35(4) considered in Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145 at 165‑166.

    [25]See Harmer v Federal Commissioner of Taxation (1991) 173 CLR 264 at 274; Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145 at 161‑162, 165‑168, 188‑190.

20. As we have indicated earlier in these reasons, s 7(2) of the De‑recognition Act placed a temporal limitation upon these Orders. It stated:

    "An Order made under sub-section (1) -

    (a)shall come into force upon the date of publication of the Order in the Government Gazette; and

    (b)shall, unless sooner revoked, cease to be in force at the expiration of 6 months from the date on which it came into force but may, at any time while it remains in force (including a time when it remains in force by virtue of a previous extension or previous extensions under this paragraph), be extended in duration by a further Order made by the Governor in Council and published in the Government Gazette."

    The three Orders were extended (sometimes with variation) at intervals of approximately six months, with the last extension before the amalgamation agreement occurring on 17 March 1994 and operative until 16 September 1994.  The latest extension after the amalgamation agreement which the evidence discloses occurred on 2 March 1995 and operated until 1 September 1995.

1. Pursuant to the first Supplemental Order, the Custodian took steps to vest in himself the funds on deposit of the BLF in Victoria. The Custodian did not obtain the registered title of the parcels of land. However, the Custodian caused the entry on the relevant certificates of title of Queen's caveats under s 106 of the Transfer of Land Act. These were lodged on 16 May 1988 and forbade the registration of any dealing by the registered proprietors "without the consent of the Custodian under the [De-recognition Act] first obtained (Order of the Governor in Council made 13 October 1987, Clause 2)". Yet, in circumstances apparently not disclosed by the evidence, by order of the Registrar of Titles dated 26 October 1993[26], the lands were "vested" in three persons who appear to have been officers or members of the BLF and were, it may be assumed, new trustees.  The order was entered on each certificate of title on 9 May 1994.

   [26]Presumably made under the Transfer of Land Act, s 58.

2. Accordingly, even after the Supplemental Orders took effect, the legal title of the parcels of land was retained by the respective registered proprietors, although the Custodian had placed Queen's caveats on the titles.  It would appear that the beneficial interest in the land was retained by the members of the unincorporated association collectively.

3. However, the funds on deposit in Victoria were vested in the Custodian and insusceptible of disposition by the unincorporated association.  Thus, irrespective of any subsequent avoidance of the amalgamation agreement by the Custodian, the subject‑matter of that agreement could not have included the funds on deposit.  They could not be included in the assets of the BLF of which that instrument spoke.

The BLF-CFMEU agreements

1. On 30 March 1994, the BLF and the CFMEU entered into the amalgamation agreement.  At that time, the CFMEU was the product of a series of amalgamations of unions which were registered under federal law.  Unlike the BLF, however, the CFMEU was a registered organisation of employees and thus possessed corporate status.  The BLF appears to have executed the amalgamation agreement by affixing the "seal" of the BLF under the hand of the General Secretary and the Federal President.

2. The amalgamation agreement purported to do more than pass possession, custody or control of the assets of the BLF.  It was a purported disposition thereof.  The relevant provisions stated:

   "3. On and from 31 March 1994 all assets and liabilities of the BLF shall merge with the assets and liabilities of the CFMEU to be held and controlled in accordance with the rules of the CFMEU and this agreement and shall be treated as if such assets and liabilities were, at all times, the assets and liabilities of the CFMEU.  Such funds shall, to the extent that prior to 31 March 1994 they were funds under the control of a BLF branch, other than the BLF, Victorian Branch, be and become funds under the control of the respective Construction Labourers' Divisional Branch established consequent upon this agreement and, otherwise, the funds of the BLF shall be held in accordance with paragraph 11 herein.  In the case of the funds of the BLF, Victorian Branch they shall be and become funds under the control of the Building Unions Division, Victorian Divisional Branch.

   4.  For all purposes and in all proceedings, an asset or liability of the BLF existing immediately before 31 March 1994 is taken to have become and to have been at all times an asset or liability of the CFMEU on and from 31 March 1994.

   ...

   7.  On and from 31 March 1994 any and all members of the remaining branches of the BLF, if not already members of the CFMEU, shall be and become members of the CFMEU and be treated in the CFMEU as if all of the period of their membership in the BLF was membership in the CFMEU and all other persons who, prior to the day fixed for the amalgamation and/or merger, were members of the BLF, shall, on and from 31 March 1994 cease to be members of the BLF.

   ...

   11.  In relation to the funds of the BLF not under the control of any branch those funds shall also merge with the funds of the CFMEU and be and become the funds of the Building Unions Division of the CFMEU through its Divisional Office or funds under the control of the Building Unions Division of the CFMEU through its Divisional Office."

   No provision of the amalgamation agreement referred to the circumstance that the funds on deposit were held by the Custodian nor did it deal with the Queen's caveats over the registered titles to the real estate.  Significantly, the Custodian was unaware of the amalgamation agreement and so did not provide his consent to the disposition of any property of the BLF.  The evidence of the Custodian in this respect was not challenged.

3. The rules of the BLF, as well as the rules of the CFMEU, were amended to enable both bodies to effect the amalgamation.  State registered unions which were associated with the BLF also entered into agreements with the CFMEU in order to further achieve the purported amalgamation.

   The proceedings

4. On 6 April 1994, Mr John Sutton, the National Assistant Secretary of the CFMEU, applied to the Industrial Relations Court of Australia ("the IRC") for various orders and declarations. The application was based in part on s 258 of the 1988 Act and in part on the jurisdiction with respect to "associated matters" conferred by s 430 of that statute[27]. Section 258 empowered the IRC to determine whether an invalidity had occurred in the management or administration of a registered organisation. The relief sought by Mr Sutton included a declaration that no invalidity had occurred in relation to the merger of the BLF and the CFMEU; an order that the property of the BLF held prior to 31 March 1994 was now held by the CFMEU; and an order that the funds on deposit held by the Custodian be transferred to accounts held by the CFMEU. The Custodian, the State of Victoria, the CFMEU and certain officers and members of the BLF were named as respondents to the application. No registered proprietor of any of the real estate was joined as a party. Nor, as to the BLF, does there appear to have been any representative order in respect of members comprising the unincorporated association.

   [27]A motion for a declaration that the IRC had no jurisdiction to hear and determine the proceeding and for its dismissal was refused by Wilcox CJ on 12 October 1994:  Sutton v Sharp (1994) 1 IRCR 259; 125 ALR 643; 57 IR 102.

5. On 5 May 1994, Mr Sutton amended his application to change the CFMEU from a respondent to the second applicant.  On the same day, Mr Sutton and the CFMEU filed a detailed statement of claim.  On 28 October 1994, the Custodian and the State of Victoria filed their defence.  In response to the allegation that the CFMEU and the BLF had entered into the amalgamation agreement which took effect on 31 March 1994, the Custodian and the State of Victoria pleaded that the amalgamation agreement "was and is void".  They placed reliance on the terms of the Order and the lack of consent from the Custodian to the disposition of the property.

   The litigation in the IRC

6. Wilcox CJ concluded[28] that the intention of cl 2 of the Order made 13 October 1987 was to render a disposition of property without the consent of the Custodian void if the Custodian so elected.  Wilcox CJ stated that, whilst the first sentence of cl 2 gave rise to the inference that any breach of the prohibition contained within it would be void, the second sentence prevented the inference by evincing what his Honour held was a clear intention that an unauthorised disposition would be void at the election of the Custodian.  As the Custodian had not exercised the option, cl 2 did not render the disposition to the CFMEU void[29].

   [28]Sutton v Sharp (No 2) (1995) 62 IR 121 at 147.

   [29](1995) 62 IR 121 at 148.

7. On 24 August 1995, Wilcox CJ made various orders[30].  The Court declared that the amalgamation agreement "was and is valid and effective in law" (order 1), that "no invalidity has occurred in the management or administration of [the] CFMEU or any branch of [the] CFMEU" (order 2), and that the CFMEU was "beneficially entitled" to the funds or property in the possession, custody or control of the Custodian including any funds or property vested in him as Custodian under any Order in Council (order 3).  The Court also made a mandatory order that, within 60 days or such further time as a judge allows, the Custodian "do all things necessary" to vest in the CFMEU those funds and property (order 4).

   [30](1995) 62 IR 121 at 149.

8. Pursuant to s 420 of the 1988 Act, the Custodian and the State of Victoria appealed to the Full Court of the IRC.  The Custodian sought a stay of execution of order 4 pending the appeal.  The Full Court granted a stay of the order so far as it related to the real estate but refused a stay in respect of the funds on deposit.  The Custodian thereafter transferred to the CFMEU the funds on deposit.

9. However, as indicated earlier in these reasons, irrespective of the effectiveness of any subsequent avoidance by the Custodian under cl 2 of the Order, the subject‑matter of the amalgamation agreement could not and did not include in the first place the funds on deposit vested in the Custodian under cl 2 of the first Supplemental Order.  That statutory title was superior to any rights which the BLF would otherwise have had under the general law to transfer to the CFMEU.

10. Between the decision at first instance and the appeal to the Full Court, Dr Sharp died.  The Governor in Council made an Order which was published on 20 August 1996[31].  The Order committed possession, custody and control of the funds and property of the BLF to the Honourable Stephen George Alley and provided that Mr Alley was to have the same functions and powers as were exercised or held by Dr Sharp immediately prior to his death.  He is the second appellant in this Court[32].

    [31]Victoria Government Gazette, No S95, 20 August 1996.

    [32]Pursuant to a grant of special leave made on 6 November 1997 at the substantive hearing.

11. On 23 August 1996, the Full Court (Spender, Ryan and North JJ) dismissed the appeal[33]. On 14 February 1997, pursuant to s 432(2) of the Workplace Relations Act, this Court granted leave to appeal.

    [33]Sharp v Sutton (1996) 73 IR 185.

    The submissions

12. In this Court, the appellants made three principal challenges to the judgment of the Full Court:

    (1)the Full Court erred in treating a disposition of property of the BLF as voidable at the option of the Custodian and not void;

    (2)in the alternative, if the Order rendered any disposition of property of the BLF voidable, the Full Court erred in concluding that the Custodian had not elected to treat the disposition as void; and

    (3)it followed that there was lacking the necessary foundation for the declaratory and mandatory orders made by Wilcox CJ and affirmed by the Full Court.

    Submissions (2) and (3) should be accepted.  The purported disposition of the BLF's interest in the real estate was voidable.  The funds on deposit stand in a different position.  They had been vested in the Custodian before the amalgamation agreement and thus, in any event, could not have been divested by the BLF, so no question of later avoidance by the Custodian arose.  However, there remain for consideration certain grounds upon which, by Notice of Contention, the respondents seek to retain the orders in their favour made by Wilcox CJ and affirmed by the Full Court.

    The construction of the Order

13. The Order is to be read with the De‑recognition Act and, in particular, with s 7 which conferred the power to make the Order. The text of cll 2 and 3 is set out earlier in these reasons. The first sentence of cl 2 of the Order creates and imposes a norm of conduct. The relevant requirement is that no person shall pay or dispose of any of the funds or property of the BLF or of any interest therein, without the prior written consent of the Custodian. The Custodian may refuse consent if not satisfied, in his absolute discretion, of the matter referred in cl 3. The legal consequences of failure to observe the norm imposed by the first sentence of cl 2 are provided for elsewhere in the legislation[34]. One consequence is to engage the criminal law. Section 7(3) of the De‑recognition Act makes it an offence to contravene an Order made under s 7(1).

    [34]cf Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 at 348; 35 ALR 79 at 86; Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1988) 19 FCR 469 at 473.

14. Secondly, cl 2 itself goes on to attach civil consequences to payments, dispositions, encumbrances and charges which are, respectively, paid, disposed of or created in contravention of the first sentence of cl 2. The dealings in question "shall be void, at the option of the Custodian".

15. Windeyer J said of the term "void" that it "has never been an easy word" and pointed out that it did not necessarily mean that the void act had no legal effect at all[35].  In particular, where (as here) a disposition between two parties is described as "void" at the will of a third, the preferred construction is to read "void" as "voidable"[36].  The submission to the contrary which was at the forefront of the appellants' submissions should not be accepted.  However, in the alternative, the appellants proffered the construction which we would accept.

    [35]Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 at 459.

    [36]Davis v Bryan (1827) 6 B & C 651 at 655‑656 [108 ER 591 at 592]; Hughes v Palmer (1865) 19 CB (NS) 393 at 407‑408 [144 ER 839 at 845]; In re London Celluloid Company (1888) 39 Ch D 190 at 203.

16. The Order uses the expression "at the option of the Custodian".  There is no specification of a temporal limitation upon the exercise of the "option".  It is sufficient for the purposes of the present litigation to construe cl 2 as authorising the Custodian to exercise his "option" and communicate the fact of that exercise within a reasonable time of awareness of the facts giving rise to the right[37].

    [37]cf Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 633‑634.

17. In submissions, the term "election" was used as a synonym for "option" as it appears in cl 2.  The true nature of "election" is the confrontation of the person electing with two mutually exclusive courses of action between which a choice must be made, for example, to terminate or keep a contract on foot[38].  In its setting in cl 2 of the Order, "option" is best understood as identifying a power, but not a duty, which is thereby conferred upon the Custodian.

    [38]Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 at 41‑42.

18. Clause 2 of the Order prescribes no particular formality for the exercise of the power conferred therein.  However, that power is supplemented by the power conferred by cl 2 of the first Supplemental Order.  This enables the Custodian to "vest in himself ... any funds or property of [the] BLF".  The avoidance by the Custodian, under the Order, of a disposition of the property of the BLF does not thereby vest in the Custodian any title which before the disposition was vested, not in the Custodian, but in the disponor.  However, the disponor is to be treated as if the disposition had not taken place.  In that state of affairs, the Custodian may exercise the power conferred by cl 2 of the first Supplemental Order to vest the property in himself.  Clause 2 includes the taking of such steps as the notification of a debtor of an assignment of a debt and the securing of registration as a shareholder or as registered proprietor of land[39].

    [39]cf Re McJannet; Ex parte Minister for Employment, Training and Industrial Relations (Q) (1995) 184 CLR 620 at 657.

19. In the present case, no question arises as to the effect of the exercise by the Custodian of the power of avoidance upon third parties claiming through or under the CFMEU.  Nor does any question arise of the taking of steps by the Custodian to get in a legal or registered title.  Subject to the operation of the Order, the amalgamation agreement disposed of the rights and interests of the members of the BLF in the real property identified earlier in these reasons.  The funds had been invested by the Custodian.  The registered proprietors had remained on the titles to the land and at no stage did the Custodian vest the registered titles in himself.  The consequence was that no legal title in respect of any funds or property of the BLF was transferred or made over to the CFMEU by the amalgamation agreement.  The exercise of the power of avoidance under cl 2 of the Order did not call for any consequential vesting of legal title in the Custodian under cl 2 of the first Supplemental Order.

20. The Order does not stipulate any means for the communication to the parties to a disposition of the exercise of the power of avoidance conferred by cl 2 thereof.  Any means will suffice, at least if it is apt to draw to the attention of the parties to the dealing in question the exercise by the Custodian of the power conferred by cl 2.  A pleading in litigation in which the relevant actors are parties may be a sufficient vehicle.  The respondents submitted that this could be so in the present litigation only if the pleading had been tendered in the appellants' case at trial.  This submission should be rejected.

21. The Custodian became aware of what had been done only with the initiation by the CFMEU of the litigation in the IRC.  The pleading by the Custodian in the defence on 28 October 1994 that "the purported amalgamation agreement was and is void" was sufficient exercise of the power of avoidance and communication of its exercise.  It follows that on 24 August 1995 the IRC should not have granted a declaratory order that the CFMEU was "beneficially entitled" to funds or property vested in the Custodian.  As to beneficial entitlement to real property, any such disposition in favour of the CFMEU had been avoided.  As to the funds on deposit, they had been vested in the Custodian and his statutory title to them had not been divested by the amalgamation agreement.

    Conclusion

22. The order of the Full Court was that the appeal to it be dismissed.  The appeal to this Court from that order should be allowed and the order should be set aside.  The matter should be remitted to the IRC for determination of any remaining issues under a Notice of Contention in or to the effect of that filed by the respondents in this Court and dated 1 April 1997.  During argument in this Court, the parties concurred in that course.  It will be for the Full Court of the IRC to determine what, if any, leave is required from it before those issues may be raised and whether any leave should be given.

23. If the appellants ultimately are successful in the Full Court, it will be for it to determine what, if any, order should or can be made in the proceeding itself to reverse the consequences of compliance with order 4 of the orders made by Wilcox CJ.

24. If the respondents ultimately are successful in the outcome of the appeal, it would still be for the Full Court to consider whether the relief given by Wilcox CJ requires variation to bring it into proper form.  We refer, for example, to the absence of any representative order with respect to the members of the BLF and also to the making of a declaration as to the title to the real property in the absence of the registered proprietors.

25. Schedule 16 to the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) provides in certain circumstances for the exercise by the Federal Court of Australia of the jurisdiction of the IRC with respect to acts or omissions occurring before the "transfer day" (25 May 1997). However, item 63 of Sched 16 provides that this transfer of jurisdiction does not apply to a proceeding (defined in item 62 so as to include an appeal) which had been completed in the IRC before 25 May 1997. The appeal to the Full Court of the IRC had been completed by the order dismissing it made on 23 August 1996. Indeed, the jurisdiction of this Court under s 73 of the Constitution had been enlivened by the grant on 14 February 1997 of leave to appeal pursuant to s 432(2) of the Workplace Relations Act. Schedule 16 does not operate by intervening between the grant of leave in this Court and the delivery of its judgment so as to require any remitter to be directed to the Federal Court rather than the IRC. It is to the IRC, not the Federal Court, that the remitter from this Court should now be directed.

1. Having regard to s 347 of the Workplace Relations Act, there will be no order as to costs in this Court or as to the proceedings to date in the IRC.

1. McHUGH J. The State of Victoria and the Honourable Stephen George Alley ("the Custodian") appeal against an order of the Full Court of the Industrial Relations Court of Australia ("the IRCA")[40] which dismissed their appeals against four orders made by Wilcox CJ in that Court[41].  By Order 1, the IRCA declared "valid and effective in law" an agreement made between the Australian Building Construction Employees' and Builders Labourers' Federation ("the BLF") and the Construction, Forestry, Mining and Energy Union ("the CFMEU") which transferred all the property and liabilities of the BLF to the CFMEU.  By Order 2, it declared that "no invalidity has occurred in the management or administration of [the] CFMEU or any branch of [the] CFMEU".  By Order 3, it declared that the CFMEU was beneficially entitled to property in the possession, custody or control of the Custodian of the property of the BLF.  By Order 4, it directed the Custodian within 60 days to do all things necessary to vest that property in the CFMEU.

   [40]Sharp v Sutton (1996) 73 IR 185.

   [41]Sutton v Sharp (No 2) (1995) 62 IR 121 at 149.

2. The principal issue in the case is whether the whole or part of a purported transfer of property, then owned beneficially by members of the BLF, is void.  The State and the Custodian contend that it was void because, acting under Orders in Council enacted before the transfer was made, the Custodian has elected to treat the transfer as void.  In my opinion, the purported transfer of property to the CFMEU has been avoided by the Custodian in accordance with his powers under the Orders in Council and the CFMEU is not beneficially entitled to the property.

   Factual background

3. The CFMEU is an organisation of employees registered under the Industrial Relations Act 1988 (Cth). The BLF was formerly an association registered under the Conciliation and Arbitration Act 1904 (Cth). Its registration was cancelled on 14 April 1986 pursuant to the Builders Labourers' Federation (Cancellation of Registration) Act 1986 (Cth). Immediately before its de-registration, the BLF, as a federally registered organisation, held corporate status under the Conciliation and Arbitration Act. Upon de-registration, pursuant to s 143(6) of the then Conciliation and Arbitration Act[42], the BLF lost its corporate status and its property reverted to "the association" to be dealt with according to the rules of the organisation[43].  That is, the property became the property of the members of the association collectively at the time of de-registration[44].

   [42]Which continues to apply pursuant to the Builders Labourers' Federation (Cancellation of Registration - Consequential Provisions) Act 1986 (Cth).

   [43]s 143(6) of the Conciliation and Arbitration Act provides that:

   "(6)    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."

   [44]Dobinson v Crabb (1990) 170 CLR 218 at 220-221; Bacon v O’Dea (1989) 25 FCR 495.

4. In 1985, in anticipation of the Commonwealth legislation, the Parliament of Victoria enacted a statute entitled the BLF (De-recognition) Act 1985 (Vic) which was to come into force after the Commonwealth legislation cancelling the registration of the BLF took effect. Section 7 of that Act provided that:

   "7(1)     For the purpose of protecting the rights of persons who have ceased to be members of BLF, the Governor in Council may by Order published in the Government Gazette provide for the restriction of the use of funds or property of BLF and for the control of those funds or that property.

   (2)    An Order made under sub-section (1) –

   (a)   shall come into force upon the date of publication of the Order in the Government Gazette; and

   (b)  shall, unless sooner revoked, cease to be in force at the expiration of 6 months from the date on which it came into force but may, at any time while it remains in force (including a time when it remains in force by virtue of a previous extension or previous extensions under this paragraph), be extended in duration by a further Order made by the Governor in Council and published in the Government Gazette.

   (3)A person shall not contravene an Order made under sub-section (1).

   Penalty:  100 penalty units."

5. Pursuant to the power conferred by s 7, the Governor in Council made an Order which was published in the Victorian Government Gazette on 13 October 1987.

6. The Order provided that:

   "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.

   ...

   5.    A person who is in possession of or who has the custody or control of any funds or property of BLF or of any document or title thereto … :

   (a)shall forthwith inform the Custodian thereof;

   …

   (c)shall not part with such possession, custody or control save to the Custodian or such authorised person."

7. On 10 November 1987, the Governor in Council made a second Order which empowered Dr Sharp to "vest in himself as Custodian any funds or property of BLF".  After the decision of Wilcox CJ, but before the hearing of the appeal in the Full Court, Dr Sharp died.  Subsequently, the Honourable Stephen George Alley was substituted as Custodian.

8. The Orders in Council were extended at intervals of about six months.  At the date of the hearing before Wilcox CJ[45] the relevant extension was operative until 16 September 1994.

   [45]Sutton v Sharp (1994) 1 IRCR 259; 125 ALR 643; 57 IR 102.

   The CFMEU and BLF agreements

9. On 30 March 1994, the CFMEU and the BLF entered into an agreement to effect an amalgamation or merger between it and various State registered unions.  The CFMEU also entered into separate agreements with each of the State registered Unions including the BLF's Victorian Branch, which still existed as an unincorporated association.  The Custodian was unaware that the BLF had entered into any of these agreements and has never consented to them.  The relevant clauses of the CFMEU-BLF agreement read:

   "1. The BLF and CFMEU agree that on and from 31 March 1994 there shall be an amalgamation and/or merger of the BLF into the CFMEU.

   ...

   3.  On and from 31 March 1994 all assets and liabilities of the BLF shall merge with the assets and liabilities of the CFMEU to be held and controlled in accordance with the rules of the CFMEU and this agreement and shall be treated as if such assets and liabilities were, at all times, the assets and liabilities of the CFMEU.  Such funds shall, to the extent that prior to 31 March 1994 they were funds under the control of a BLF branch, other than the BLF, Victorian Branch, be and become funds under the control of the respective Construction Labourers' Divisional Branch established consequent upon this agreement and, otherwise, the funds of the BLF shall be held in accordance with paragraph 11 herein.  In the case of the funds of the BLF, Victorian Branch they shall be and become funds under the control of the Building Unions Division, Victorian Divisional Branch.

   4.  For all purposes and in all proceedings, an asset or liability of the BLF existing immediately before 31 March 1994 is taken to have become and to have been at all times an asset or liability of the CFMEU on and from 31 March 1994."

10. The relevant clause of the CFMEU-BLF Victorian Branch agreement reads:

    "4. On and from the amalgamation day the CFMEU shall assume control of and responsibility for all assets and funds which, immediately before the amalgamation day, comprised the Branch Funds of the Victorian Branch under Rule 17 of the rules of the BLF, and all liabilities of the Victorian Branch and/or the BLF in relation to the Victorian Branch, and such assets, funds and liabilities shall be managed and controlled in CFMEU by the CFMEU Building Unions Division, Victorian Divisional Branch."

11. In anticipation of these agreements, the BLF amended its rules in relation to the ownership of the property:

    "42B(ii) On and from the day fixed for the amalgamation and/or merger in paragraph (i) herein, all assets and liabilities of the Australian Building Construction Employees and Builders' Labourers' Federation ('the BLF') shall merge with the assets and liabilities of the CFMEU to be held and controlled in accordance with the rules of the CFMEU ... and shall be treated as if such assets and liabilities were, at all times, the assets and liabilities of the CFMEU. ...

    (iii) For all purposes and in all proceedings, an asset or liability of the BLF existing immediately before the day fixed for the amalgamation and/or merger is taken to have become and to have been at all times an asset or liability of the CFMEU on and from the day fixed for the amalgamation and/or merger."

12. It is common ground between the parties that, pursuant to these agreements, the BLF purported to transfer to the CFMEU certain funds on deposit and three parcels of land registered under the Transfer of Land Act 1958 (Vic). The appellants contend that these funds and parcels of land were the property of the members of the Victorian branch of the BLF prior to the de-registration of the BLF and remain the property of those members.

13. It is also common ground that neither the BLF nor the CFMEU sought or obtained the Custodian's consent to the merger agreement or the purported transfer of the property.  Since learning of the agreement, the Custodian has maintained that the transfer of property was void because his consent had not been obtained.  In the defence, filed by the Custodian in the present proceedings, par 5(e)(iii) asserted that "the first respondent regards any attempt by the BLF to dispose of funds or property of the BLF to the second applicant as void".

14. On the view that I take of the construction of the Order in Council of 13 October 1987, the critical question in the appeal is whether this pleading constituted an exercise of the power to avoid dispositions of property of the BLF pursuant to cl 2 of that Order.

    The history of the litigation

15. On 6 April 1994, Mr John Sutton, the Assistant National Secretary of the CFMEU, commenced the present proceedings in the IRCA.  Later, the CFMEU was joined as an applicant for relief.  The litigation gave rise to two main issues:  the validity of the CFMEU and BLF merger and the entitlement of the CFMEU to the assets held by the Custodian pursuant to the BLF (De-recognition) Act 1985 (Vic). The proceedings came before Wilcox CJ who held that on the proper construction of cl 2 of the Order of 13 October 1987 any transfer of property by the BLF was valid unless avoided by the Custodian and that the Custodian had not avoided the transfer of the property of the BLF to the CFMEU. His Honour declared that the CFMEU was entitled to the property and made the orders to which I have referred[46].

    [46]Sutton v Sharp (No 2) (1995) 62 IR 121 at 149.

16. The Full Court of the IRCA (Spender, Ryan and North JJ) dismissed an appeal by the State and the Custodian[47].  The Court agreed with Wilcox CJ that the CFMEU was entitled to the property because, on its proper construction, cl 2 of the Order in Council of 13 October 1987 merely gives the Custodian the right to elect to avoid a payment, disposition, or encumbrance made without his or her consent and does not make the payment, disposition, or encumbrance void ab initio.  The Full Court held that on the evidence the Custodian had not elected to avoid the transaction.  The Full Court raised the question whether the Custodian could still elect to avoid the transfer of property but declined to decide the issue[48].

    Effect of the BLF De-recognition Act and the consequential Orders in Council on the ownership of the property

    [47]Sharp v Sutton (1996) 73 IR 185.

    [48]Sharp v Sutton (1996) 73 IR 185 at 198.

17. The Order in Council of 13 October 1987 "committed" to the Custodian "possession, custody and control of the funds and property of BLF".  The Order in Council of 10 November 1987 gave a discretion and power to the Custodian to "vest in himself as Custodian any funds or property of BLF".  Pursuant to this Order, the Custodian vested in himself some of the property, namely those funds which he deposited in his name "as trustee for the BLF".  However, the Custodian did not register the real property in his name.  Instead the Custodian placed a Queen's Caveat on the title to each property.  The effect of the caveats was to restrict dealings with the property, but not to transfer the title.  The property remained registered in the name of certain members of the BLF, each of whom held the position of "trustee" under the BLF rules.  They held it on trust for the members of the BLF.  Nevertheless, although the Custodian did not hold the legal or beneficial title to the real property, he had a statutory right to control the disposition of that property and to avoid any disposition made without his written consent.

18. It is not open to doubt that the Custodian had the legal title to the funds which were invested in his name.  Furthermore, in my opinion, he held those funds as trustee for the members of the BLF, notwithstanding that the BLF De‑recognition Act and the Orders in Council vested the Custodian with a wide discretionary power to deal with the property of the BLF and does not mention the term "trust". Section 7 of the BLF De-recognition Act[49] emphasises that the restriction on use or distribution of the funds of the BLF was undertaken "[f]or the purpose of protecting the rights of persons who are or have ceased to be members of BLF".  Further, cl 3 of the Order of 13 October 1987 provided:

    "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."

    [49]As amended on 13 October 1987 by BLF (De-recognition) (Amendment) Act 1987 (Vic).

19. It follows from these provisions that, when the Custodian took control of the funds and invested them in his name, he became the trustee and not the beneficial owner of the funds.  It is true that neither the legislation nor the orders described the Custodian as a "trustee".  However, the purpose of the legislation was to protect the property for the members of the BLF.  That is a sufficient indication that the Custodian was to hold the property as trustee and not beneficially.  In Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation[50], this Court found that a trust arose out of legislation which similarly did not expressly provide for a trust and allowed a wide discretion to the trustee.  The Court said that[51]:

    "A trust may be created without use of the word 'trust'[52].  And, unless there is something in the circumstances of the case to indicate otherwise, a person who has 'the custody and administration of property on behalf of others'[53] or who 'has received, as and for the beneficial property of another, something which he is to hold, apply or account for specifically for his benefit'[54] is a trustee in the ordinary sense."

    To the extent that it is relevant, the Custodian also recognised that he held the funds as trustee and not beneficially, for he deposited the funds in his name "as trustee".

    [50](1993) 178 CLR 145.

    [51](1993) 178 CLR 145 at 165-166 per Mason CJ, Deane, Toohey and Gaudron JJ.

    [52]See In re Kayford Ltd [1975] 1 WLR 279 at 282; [1975] 1 All ER 604 at 607 per Megarry J; Tito v Waddell [No 2] [1977] Ch 106 at 211 per Megarry V-C. See also Brisbane City Council v Attorney-General [1979] AC 411 at 421.

    [53]Taylor v Davies [1920] AC 636 at 651.

    [54]Cohen v Cohen (1929) 42 CLR 91 at 100 per Dixon J.

20. It follows that, immediately before the amalgamation agreement, the beneficial interest in the funds was held collectively by the members of the BLF and was not transferred to the Custodian under the Orders in Council or the legislation.  The real property and the beneficial interest in the funds were therefore available to be dealt with by the members of the BLF collectively in accordance with the BLF Rules.  However, any dealing with the funds or property was subject to the statutory rights of the Custodian under the Orders in Council.

    The effect of the Victorian legislation and the conduct of the Custodian on the purported disposition of property

21. Despite the earnest argument of the appellant, it is not open to doubt that cl 2 of the Order in Council of 13 October 1987 by stating that any "payment disposition encumbrance or charge shall be void, at the option of the Custodian" merely gives the Custodian a right to avoid a dealing made without the written consent of the Custodian.  Clause 2 does not itself operate to avoid such a dealing.  It does not regard a dealing without the consent of the Custodian as having no force and effect.  On the contrary, it assumes that the dealing will be valid until the Custodian exercises his right to avoid the dealing.

22. By contesting the transfer of property before the primary judge and pleading that the transfer of property was and is void, the Custodian exercised his legal right to avoid the transfer.  Nothing in the terms or purpose of cl 2 requires the Custodian to use the word "elect" before he can avoid a dealing made without his written consent.  Clause 2 did not put the Custodian to an "election".  That term is not used in the Order in Council.  Moreover, when used for legal purposes, it ordinarily implies a duty on a person to choose between competing alternatives at a particular time or during a particular period.  In its context and having regard to the purpose of the legislation, the better view of cl 2 is that it simply confers a power on the Custodian and does not put him to an election.  It simply gives the Custodian power to avoid a disposition made without his written consent.  Prima facie, the power may be exercised at any time while the Order in Council is in force.  The fact that considerable time could elapse between a disposition of BLF property and the Custodian becoming aware of it strengthens the case for that construction.

23. The question in each case therefore is not whether the Custodian has elected to avoid a disposition of property, but whether he has manifested an intention to avoid the disposition.  It may be that the power can be validly exercised whether or not the Custodian does or is able to inform the parties to the dealing that he has exercised the power.

24. The Custodian became aware of the transfer of property by the BLF only when Mr Sutton initiated the present litigation.  Upon being met with the claim that the property had been transferred, the Custodian defended the claim by asserting that the transfer was void.  That indicated in the clearest terms that, so far as he was concerned, he was treating the transfer as void.  That was a sufficient manifestation of the exercise of the power invested in him by cl 2.  It was not necessary, as the respondent contended, for the Custodian's pleading to be tendered in the action before it could be treated as an exercise of the power or, as the respondents would have it, as an election.  Upon filing the pleading, the CFMEU became aware of the Custodian's decision to exercise the power with the result that, as against the CFMEU, the transfer of property to it was void.

1. Two objections, relevant to power, were taken to Declaration 3 and Order 4.  The first was that the clear purpose of the Order was to reserve dispositions of BLF funds and property to those which had the prior written consent of the Custodian.  On that footing, the officers and the trustees of the BLF had no power to act as they did, unilaterally and without the prior written consent of the Custodian.  Secondly, if in relation to the real property the Custodian had not put himself in "possession, custody or control", for example by failing to vest in himself the legal title to such property after the Supplemental Order permitted that course, this limited the effectiveness of Order 3, according to its terms.  All that the CFMEU was "beneficially entitled to" was the "funds and property presently in the possession, custody or control of [the Custodian]".  If, then, he was not in "possession, custody or control" of the legal estates in the real property, the principal subject matter of this litigation, Declaration 3 was silent as to such property.  Accordingly, so the argument ran, Order 4 should not have required the Custodian to "do all things necessary to vest in CFMEU" such funds and property.

2. There are several answers to these arguments.  I shall deal first with those which concern their substance.  It is true that the Order contemplated that "[p]ossession, custody and control of the funds and property of BLF" were committed to the Custodian[110].  However, it also proceeded to recognise that certain dispositions of such funds and properties might continue to be made subject (as I have held) to being avoided at the option of the Custodian[111].  The Custodian was armed with powers under the Order to take possession, custody and control of the funds and property[112] and under the Supplemental Order to "vest in himself as Custodian any funds or property"[113].  Until such powers were exhausted, the differentiation between the legal and beneficial interests in the property of the BLF in Victoria was virtually assured.  The legal interest in the real property held by the trustees might be in their name.  The beneficial interest would be enjoyed by the BLF association and its members.  By the Order, that beneficial interest was committed to the Custodian.  It was that interest with which Wilcox CJ was concerned. Having found that (by the amalgamation agreement) such BLF interests had merged with the assets and liabilities of the CFMEU, his Honour was understandably minded to provide, by his orders, for the beneficial interests in the funds and property.  The reference in the terms of Order 4 to the funds and property makes it plain that all that the Custodian was required to do was to "vest in CFMEU the said funds and property"[114].  As the beneficial interest in the real estate committed to the Custodian was all that he then held, and as that interest was notified by the Queen's caveats lodged by the Custodian, by inference, "all things necessary" would involve the removal of such caveats.  Only then would it be open to the trustees, in accordance with a lawful resolution of the BLF, to convey the legal title to the real property to the CFMEU or to such persons as under the rules of the CFMEU were entitled to hold real property on behalf of that organisation.  In the event that there was any uncertainty concerning the requirements of Declaration 3 and Order 4 they could be clarified, as Order 5 contemplated, by a single judge of the Industrial Relations Court.  It is not appropriate that such a matter should concern this Court.

   [110]Order, cl 1.

   [111]Order, cl 2.

   [112]cl 7.  See also cll 4, 5, 6 and 8.

   [113]cl 2.

   [114]Emphasis added.

3. If there were more substantial arguments as to the powers of the officers of BLF, on behalf of that association and its members, to enter into those provisions of the amalgamation agreement which dispose of the funds and property of the BLF and its members in Victoria, which I have failed to appreciate because of the way this ground of appeal so belatedly arose following suggestions from the Court, there is a readier answer to it.  In this intricate and hard-fought litigation, the appellants should not, in my opinion, have leave to raise in this Court, for the first time, a completely new issue.  Amongst all of the many technical objections which were argued at first instance, this one was not.  It was not even argued in the Full Court.  It was not suggested on the leave application.  It was not even conceived of by the appellants themselves.  It is unreasonable, therefore, at the death knock, to permit the enlargement of the appeal (which is not by way of rehearing[115]).  Any matter which is within the liberty reserved by Order 5 may still be raised in the Industrial Relations Court.  Any matter outside that liberty should now be taken as spent.  There must be an end to litigation.  It is not as if this was a case in which the appellants lacked legal representation of a high quality or in which they are otherwise deserving of protection from oversight of a legal technicality.  Were such a point now permitted, the respondents could not be protected, at least in the Industrial Relations Court, by an order that the appellants pay the costs incurred to date[116].  Although I am far from convinced that the power of disposal point is a good one, it is my view that this Court should decline the appellants' application for leave to add the proposed new ground of appeal.

   [115]Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 87, 110-111, 113; Petreski v Cargill (1987) 18 FCR 68 at 77.

   [116]Industrial Relations Act 1988 (Cth) (now Workplace Relations Act 1996 (Cth)), s 347.

   The form of the orders and other issues

4. Questions were also raised by members of the Court concerning the form of Declaration 3 and whether such a declaration ought to have been made.  Specifically, it was suggested that the declaration obliged the joinder, as parties to the proceedings, of the trustees vested with the legal estate of the real property in which the BLF association and its members originally had the beneficial interest.  Whilst various criticisms can be made of the form of Declaration 3, I have elsewhere expressed my view that this Court should resist attempts to involve it in such interlocutory matters.  They properly belong to the practice of another superior court[117].  Least of all should this Court yield to any temptation to do so where the point has never been raised before the appeal reached the Court and where liberty is specifically reserved to all parties to apply to the Industrial Relations Court should clarification or elaboration of its orders be deemed necessary.

   [117]Re JJT and Ors; Ex parte Victoria Legal Aid (1998) 155 ALR 251 at 272; cf Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 72 ALJR 873 at 894; 153 ALR 643 at 670.

5. There is no merit in the suggested failure of the Industrial Relations Court to ensure that all persons potentially affected by its orders (notably the trustees) be joined as parties to the proceedings before the orders were made affecting them. The proceedings before that court were unusual. They involved an application by the CFMEU pursuant to s 258 of the Industrial Relations Act 1988 (Cth) for a determination, by declaration, of a question as to whether an invalidity had occurred, relevantly, in connection with the amalgamation effected between the CFMEU and the BLF.

6. The predecessor to s 258[118] was enacted following the report of the Committee of Inquiry on Co-ordinated Industrial Organisations[119].  It was the product of widespread frustration with the invalidation, following litigation, of the actions of industrial organisations performed by the officials of those organisations in good faith, but in a manner that rendered them technically invalid[120].  Such litigation had caused enormous dislocation.  It encouraged expensive and often meritless proceedings which the Parliament, advised by the Committee, was determined, where appropriate, to remedy.  Although the terms of the provision enacted by Parliament differed from what was proposed by the Committee[121], it is nonetheless appropriate to have regard to the history and purpose of s 258. This background makes it clear that the provision should not be given a narrow construction. Nor should its operation be defeated by the same kind of meritless technicalities which gave birth to the enactment in the first place. By s 258(6), the Industrial Relations Court was empowered to determine what notices should be given to other persons of the intention to make an application for an order under the section. Pursuant to that provision, the Industrial Relations Court in these proceedings ordered notices to be given to individuals and, through newspaper advertisements, to the public. Notices were specifically given to the trustees. As this Court was informed, the trustees appeared before the Industrial Relations Court. They consented to the making of the declarations and orders by that Court. In such circumstances, their absence from the record, and for that matter the absence of other officers and members of the BLF, is now immaterial. If, belatedly, it were considered in some way material and that could be shown, the party contending as much could doubtless chance its arm under Order 5 reserving liberty to apply. Neither the objection to the form of the orders nor to the parties in the proceedings before the Industrial Relations Court has any merit which this Court needs to address. The form of the orders point also fails.

   [118]Conciliation and Arbitration Act 1904 (Cth), s 171C, inserted by Conciliation and Arbitration (Organizations) Act 1974 (Cth), s 16.

   [119]Sweeney, Report of the Committee of Inquiry on Co-ordinated Industrial Organisations (1974) at 57.

   [120]Sweeney, Report of the Committee of Inquiry on Co-ordinated Industrial Organisations (1974) at 38-40.

   [121]Sutton v Sharp (1994) 1 IRCR 259 at 271-272; 125 ALR 643 at 654; 57 IR 102 at 112.

   Conclusion

7. None of the challenges to the declaration and orders of the Industrial Relations Court succeeds.  I need not address several other issues which were raised during argument.  These included whether, even now, the Custodian could exercise the option to avoid the disposition of BLF funds and property to the CFMEU.  The appellants properly conceded that it was inherent in cl 2 of the Order that the Custodian would be bound to exercise his powers reasonably.  That would presumably include within a reasonable time of being aware of circumstances giving rise to their exercise.  Were an exercise of the option now attempted serious questions would arise as to its validity, the amalgamation agreement otherwise being declared valid and effective[122].  For example, it would be necessary for the Custodian to show that a foundation still existed for the exercise of his powers, or the extension of the Order, beyond the date of the amalgamation.  These questions were not determined in the proceedings giving rise to this appeal.  I would give no encouragement to fresh proceedings.  But that is where any such matters would now have to be agitated.  Not in this Court.  Not on new grounds added at the end of extended litigation.  Not on points unconceived by a well advised governmental party but arising for the first time during argument before this Court.

   [122]Declaration 1 of Wilcox CJ read "The amalgamation that was effected on and from 31 March 1994 between CFMEU and the Australian Building Construction Employees' and Builders Labourers' Federation ('the BLF') was and is valid and effective in law": (1995) 62 IR 121 at 149.

   Order

8. The appeal should be dismissed.