ICM Agriculture Pty Ltd v The Commonwealth

The High Court of Australia considered a constitutional challenge brought by ICM Agriculture Pty Ltd and others against the Commonwealth. The dispute arose from a funding agreement entered into by the Chief Executive Officer of the National Water Commission with a State, which the plaintiffs alleged authorised the State to acquire property on other than just terms. The core of the plaintiffs' argument was that their bore licences, issued under New South Wales legislation, constituted property within the meaning of section 51(xxxi) of the Constitution, and that the replacement of these licences with aquifer access licences under subsequent legislation amounted to an acquisition of property that was not on just terms.

The legal issues before the Court were whether the Commonwealth lacked the executive power to enter into the funding agreement, and consequently, whether the National Water Commission Act 2004 (Cth) was invalid to the extent it authorised such an agreement. This involved determining whether the legislative power conferred by section 96 of the Constitution, potentially in conjunction with section 51(xxxvi), was subject to the limitations imposed by section 51(xxxi) regarding the acquisition of property on just terms. Additionally, the Court had to consider whether the plaintiffs' bore licences constituted "property" for the purposes of section 51(xxxi) and whether their replacement amounted to an "acquisition" of that property.

The Court reasoned that while the legislative power under section 96 of the Constitution, when combined with section 51(xxxvi), does not permit the Commonwealth to grant financial assistance to a State on terms requiring the State to acquire property on other than just terms, this principle did not apply in the present case. The Court concluded that the replacement of the plaintiffs' bore licences did not constitute an acquisition of property within the meaning of section 51(xxxi) of the Constitution. This conclusion rendered the questions concerning the Commonwealth's executive power and the validity of the National Water Commission Act moot. The Court also determined that the plaintiffs no longer held their bore licences.

Consequently, the High Court ordered that the questions stated in the special case be answered accordingly. The Court held that the replacement of the plaintiffs' bore licences did not constitute an acquisition of property within the meaning of section 51(xxxi) of the Constitution, meaning the questions of invalidity did not arise. The Court also found that the plaintiffs no longer held their bore licences. The plaintiffs were ordered to pay the costs of the Special Case.