Carter v E W Roach & J B Milton Pty Ltd [1921] HCA 45; (1921) 29 CLR 515 (17 November 1921)

Carter Informant, Appellant; and E. W. Roach and J. B. Milton Proprietary Limited Defendant, Respondent.

The question we have to consider is whether a memorandum of agreement duly certified and filed under the provisions of sec. 24 (1) of the Commonwealth Conciliation and Arbitration Act is obnoxious to the provisions of sec. 29 (ba) of that statute. Two distinct contentions were made before us: first it was said that sec. 29 (ba) when properly construed did not extend to a memorandum of agreement under sec. 24, and next it was said that if sec. 29 (ba) did purport to extend to such a memorandum it was invalid because not within the powers of the Parliament of the Commonwealth. We agree to the first contention, and therefore find it unnecessary to express any opinion as to the second. The relevant portion of sec. 24 is as follows: "(1) If an agreement between all or any of the parties as to the whole or any part of the dispute is arrived at, a memorandum of its terms shall be made in writing and certified by the President, and the memorandum when so certified shall be filed in the office of the Registrar, and unless otherwise ordered and subject as may be directed by the Court shall, as between the parties to the agreement, have the same effect as, and be deemed to be, an award for all purposes including the purposes of section thirty-eight." It is said for the appellant that the effect of these words is to put the parties to a filed and certified memorandum of agreement precisely in the same position as if they had proceeded to arbitration and had obtained an award in the terms of the memorandum of agreement; that for the purposes of the Act the memorandum is an award of the Court, and, being an award of the Court, is subject to all the provisions of the Act with respect to such awards so far as they reasonably and properly can be applied to a memorandum of agreement. Such a provision is contained in sec. 29 (ba), which enacts that the award of the Court shall be binding in the case of employers on any successor or any assignee or transmittee of the business of a party bound by the award, including any corporation which has acquired or taken over the business of such a party, and therefore the memorandum of agreement is binding not only on the employers who are parties to it, but also on their successors, assignees and transmittees. We think that this argument is based on an inaccurate paraphrase of the provisions of sec. 24 (1). In our opinion the words "as between the parties to the agreement" in that section are equivalent to the words "so far as the reciprocal rights and obligations of the parties under the agreement are concerned," and the sub-section does no more than provide that the terms of the agreement shall be binding on the parties to the same extent, and enforceable against them in the same way, as if they had been terms of an award instead of merely terms of an agreement. We also think that the conclusion which the appellant draws from his premises is too narrow. If the memorandum is an award of the Court, then not merely some but all of the provisions of the statute which apply to awards must apply to filed memoranda—which leads to an absurdity, because it is conceded that many of such provisions cannot without absurdity be applied to a filed memorandum. It seems clear to us that if the sub-section has a larger meaning than that which we have attributed to it, it must mean that the word "award" when used in the statute shall include a certified and filed memorandum of agreement; and an examination of the provisions of the statute dealing with awards shows that it cannot have that meaning, for many of those provisions are admitted to be quite inapplicable to a memorandum of agreement. The appellant endeavours to make sec. 29 (ba) apply in the present case by giving an ambulatory meaning to the words "award of the Court." He says that sub-secs. (a) and (b) are not in their nature applicable to a filed memorandum, and the word "award" in the beginning of the section does not therefore include a filed memorandum for any of the purposes of those sub-sections; but sub-section (ba) is applicable to such a memorandum, and consequently the word "award" in the beginning of the section and the same word in sub-section (ba) do include such a memorandum. To us it seems clear that Parliament intended that one specific thing, which it called an "award of the Court," should be binding on all those enumerated in the various sub-sections, and that there is neither reason nor authority to justify us in adopting the distributive method suggested by the appellant. When we look at the history of sec. 24 (1) it becomes plain that Parliament did not consider that the sub-section had the meaning which is now attributed to it by the appellant. Before the passing of Act No. 31 of 1920 the sub-section ended with the words "shall, as between the parties to the agreement, have the same effect as, and be deemed to be, an award." Sec. 12 of that Act added the words "for all purposes including the purposes of section thirty-eight," which now stand at the end of the sub-section. If the words of the sub-section as it stood made a certified and filed memorandum an award simpliciter, there was no need for any alteration or addition: the word "award" wherever used in the statute would include a filed memorandum, and the words added could give no new force or efficacy. If, on the other hand, the sub-section as it then stood did not have that effect, it cannot have it now, for the added words were apt, not to produce such an effect, but only to give the filed memorandum increased efficiency with respect to parties already bound by the agreement.

This is an appeal with respect to an information for a penalty for breach of an agreement certified and filed under sec. 24 (1). The defendant, a proprietary company, was not a party to the agreement, but was formed after the agreement was made and certified and filed, and it took over the businesses of two respondents to the dispute who had signed the agreement. Sec. 29 (ba) provides that an award of the Court shall be binding on, "in the case of employers, any successor, or any assignee or transmittee of the business of a party bound by the award, including any corporation which has acquired or taken over the business of such a party"; and sec. 24 (1) provides that an agreement certified and filed "unless otherwise ordered and subject as may be directed by the Court shall, as between the parties to the agreement, have the same effect as, and be deemed to be, an award for all purposes including the purposes of section thirty-eight." I can see no escape from the conclusion that the provision contained in sec. 29 (ba) is to be applied to this agreement, so that the assignees of a party to an agreement filed are to be bound in the same way as the assignees of a party to a filed award.

No one contends that under sec. 24 (1), taken by itself, a filed agreement binds anyone but the parties to the dispute who are parties to the agreement; and no one contends that in sec. 29 the words "the award of the Court," taken by themselves, mean or include an agreement. But the missing link between the sections is found in the words of sec. 24 (1), providing that the agreement is to have the same effect as and to be deemed to be an award—as between the parties to the agreement—and for all purposes. Parties to an agreement cannot, of course, bind by the agreement those parties to the dispute who are not parties to the agreement. It is evident that the addition to the words of sec. 24 (1) made by the amending Act of 1920—"for all purposes including the purposes of section thirty-eight"—was made to clear away the doubts which had been frequently raised as to the applicability of such provisions as sec. 38 (c), (d) and (o) to agreements—I mean the provisions for fixing penalties, for imposing penalties, and for making variations. The amending Act of 1920 was passed on 11th October 1920, before the Full Court decided (9th December 1920) that the Court of Conciliation had power to vary its agreements as well as its awards (R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte North Melbourne Electric Tramways and Lighting Co.[1]). Probably the Act as it stood before 11th October 1920 had as full an effect on agreements as it has had since; but it surely is not unusual for a legislature to seek to remove all doubts on a subject by an amendment expressly declaring its intention and validating the existing practice.

For the purposes of this question, therefore, the paraphrase suggested for the words "as between the parties to the agreement" in sec. 24 (1)—the paraphrase "so far as the reciprocal rights and obligations of the parties under the agreement are concerned"—might well be accepted; but it takes the respondent company no further towards its goal. The question still remains, does not the provision in sec. 24 (1), that an agreement is to "have the same effect as, and be deemed to be, an award for all purposes," cause the provisions as to awards to fit like a cap on the agreement? I mean, of course, the provisions as to awards made, not awards in the course of the making—an agreement made and filed is to be deemed to be an award made and filed (secs. 28 (1), 38B, 40, 40A seem to refer to awards in the course of making). These words in sec. 24 (1) are, indeed, stronger than the words of an ordinary interpretation section, which usually (as in sec. 4) excepts any case "where otherwise clearly intended." I can see no difficulty in applying sec. 28 (2)—that an award is to continue after its fixed date—to agreements; or in applying secs. 30 and 31.

If (as seems to be assumed) sec. 29 (a) and (b) are idle, otiose, unnecessary as to agreements, that fact does not affect our duty to apply all other provisions of the Act as to awards, to agreements. If there were an Act as to cattle and if horses are by the words of the Act to be deemed to be cattle, and if there are provisions as to horns, the fact that horses have no horns does not render the Act inapplicable to horses so far as it can be applied.

If the argument of the defendant be accepted, it would seem to follow that penalties cannot be imposed for breach of agreements, and that agreements cannot be varied by the Court under sec. 38 (o), or interpreted; that, in fact, the words inserted in sec. 24 by Parliament in 1920 are worse than nugatory. If the argument be accepted, it follows that the members of organizations are not bound by agreements made by the organizations under sec. 24 (sec. 29 (d)).

I am of opinion that in sec. 24 (1) the words "as between the parties to the agreement" were put in to distinguish between the parties to the dispute who are parties to the agreement and the parties to the dispute who are not parties to the agreement—to make a separation between parties on the same plane; and that Parliament, by sec. 29 (ba) and (d) and sec. 24 (1) combined, meant to bind assignees of a business as to which an agreement has been made as well as assignees of a business as to which an award has been made, and to bind all members of an organization bound by an agreement as well as all members of an organization bound by an award.

The Commonwealth Conciliation and Arbitration Act 1904-1920 prescribes that an agreement certified and filed pursuant to sec. 24 of the Act shall, as between the parties to the agreement, have the same effect as, and be deemed to be, an award for all purposes including the purposes of sec. 38. On the one hand, it is said that this provision attracts to agreements filed under sec. 24 all the provisions of the Act relating to awards so far as the same are capable of application; whilst, on the other, it is said that any provisions so attracted must be confined in their application to the parties named in the agreement. The latter construction gives no effect to the words "for all purposes" added to sec. 24 in 1920 (see Act No. 31 of 1920, sec. 12). It renders, so far as I can see, all agreements quite ineffective as to members of organizations who are not actually named as parties to the agreement. They can neither take advantage of the agreement (Mallinson v. Scottish Australian Investment Co.[2]), nor can it be enforced against them. It does not run counter perhaps to the actual decision in R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte North Melbourne Electric Tramways and Lighting Co.[3], but the opinions given in that case trend in the opposite direction. But none of these considerations are decisive on the question of construction, and in the end the precise words of the enactment are the governing test.

The memorandum of the agreement when certified and filed "shall, as between the parties to the agreement, have the same effect as, and be deemed to be, an award for all purposes." The agreement is to be in the same position, in my opinion, as if the Court had made an award and limited its application to the parties named in the award. There is nothing in the Arbitration Act to prohibit such an award (Federated Engine-Drivers' and Firemen's Association of Australasia v. Adelaide Chemical and Fertilizer Co.[4]). Clearly sec. 29, so far as applicable, would apply to such an award, and particularly the provisions of sec. 29 (ba). But the provisions of sec. 29 (a) and (b) would not be applicable to the award any more than they are to an agreement which is given the effect of an award under sec. 24.

If the provisions of sec. 29 (ba) can be applied to an award which is limited to certain parties in an industrial dispute, I can see no sound reason for refusing to apply it to an agreement which has the effect of an award between named parties. The truth is that the words "between the parties to the agreement" in sec. 24 indicate the extent of the settlement of the industrial dispute, and do not define the limit of the operation of the agreement. The words "shall have the same effect as, and be deemed to be, an award for all purposes" provide for the operation of the agreement, and are a statutory direction to carry out and execute the agreement in the same manner as if it were an award in partial settlement of the industrial dispute.

As the majority of the Court are of a contrary opinion, it becomes unnecessary to consider whether sec. 29 (ba)) is within the competence of Parliament.

[1] [1920] HCA 82; 29 C.L.R., 106.

[2] [1920] HCA 51; 28 C.L.R., 66.

[3] [1920] HCA 82; 29 C.L.R., 106.

[4] [1920] HCA 18; 28 C.L.R., 1, at p. 9.

High Court of Australia

Carter v E W Roach & J B Milton Pty Ltd [1921] HCA 45; (1921) 29 CLR 515 (17 November 1921)

HIGH COURT OF AUSTRALIA