D'Emden v Pedder

The High Court of Australia considered a dispute between D'Emden, the Commonwealth Auditor-General, and Pedder, the Tasmanian Commissioner of Audit. The core of the disagreement concerned the extent to which a State Act could regulate or interfere with the operations of a Commonwealth agency, specifically the Commonwealth Audit Act 1901. D'Emden sought to prevent Pedder from auditing the accounts of the Commonwealth's Postmaster-General in Tasmania, arguing that the Tasmanian Audit Act 1902 (Tas) purported to impose State-level auditing requirements on Commonwealth functions.

The central legal questions before the Court were whether the Tasmanian Audit Act, in its application to Commonwealth officers and functions, was valid and effective, and whether the Commonwealth Audit Act, by its nature, impliedly excluded such State interference. The Court was required to interpret the relationship between Commonwealth and State legislative powers, particularly in light of sections 52(ii), 107, 109, and 114 of the Commonwealth Constitution, and to consider the relevance of American constitutional jurisprudence to the interpretation of the Australian Constitution.

The Court reasoned that the Commonwealth Parliament, under section 52(ii) of the Constitution, had exclusive power to make laws with respect to the departments of the public service the control of which is by the Constitution transferred to the Parliament. The Audit Act 1901 was enacted pursuant to this power, establishing a comprehensive system for auditing Commonwealth accounts. The Court held that the Tasmanian Audit Act, by attempting to subject Commonwealth officers and their accounts to State audit, was inconsistent with the Commonwealth legislation and therefore invalid to that extent, by operation of section 109 of the Constitution. The principle established was that where Commonwealth legislation validly exercises a power granted to the Commonwealth, it prevails over inconsistent State legislation.

Consequently, the Court found in favour of D'Emden, ruling that the Tasmanian Commissioner of Audit had no power to audit the accounts of the Commonwealth's Postmaster-General in Tasmania.