State of Victoria v Sutton

The High Court of Australia heard an appeal concerning the validity of a purported transfer of property from the Builders Labourers' Federation (BLF) to the Construction, Forestry, Mining and Energy Union (CFMEU). The State of Victoria and the Custodian of the BLF's property contended that the transfer was void because the Custodian had elected to treat it as such, in accordance with Orders in Council made under Victorian legislation. The central dispute revolved around whether the Custodian's actions had effectively avoided the disposition of the property to the CFMEU.

The legal issues before the High Court included whether a disposition of property prohibited by an Order in Council, which stated it was "void, at the option of the Custodian," was in fact void or merely voidable. The Court also had to determine the manner in which the Custodian could exercise this option to avoid the disposition, the timeframe within which such an option must be exercised, and the method by which the exercise of this option should be communicated. Furthermore, the Court considered the effect of the cancellation of the BLF's registration under Commonwealth industrial law on its property.

The High Court reasoned that the Orders in Council, enacted under Victorian legislation in anticipation of the BLF's de-registration, empowered the Governor in Council to restrict the use and control of the BLF's property. The Court found that the Custodian's pleading in defence, asserting that the purported amalgamation agreement was void, constituted a sufficient exercise of the power of avoidance and communication of that exercise. Consequently, any disposition of property in favour of the CFMEU had been avoided. The Court held that the CFMEU was not beneficially entitled to the property in question.

The High Court allowed the appeal, setting aside the order of the Full Court of the Industrial Relations Court of Australia. The matter was remitted to the Full Court of the Industrial Relations Court of Australia to determine any remaining issues raised by a Notice of Contention filed by the respondents.