Lee v Commonwealth of Australia

In Lee v Commonwealth of Australia, the applicants, Mr Lee and Mr Gropler, challenged the constitutional validity of the Water Act 2007 (Cth) and the Basin Plan made under that Act. They claimed the Act and the Basin Plan discriminated against interstate trade, conferred protection on intrastate trade, and curtailed the capacity of Basin States to function as such. They also claimed the government policy to purchase water entitlements to increase environmental flows was unconstitutional and that the water entitlements were acquired without just terms. The applicants sought relief under various sections of the Constitution, including sections 92, 99, 100, and 101. The respondents, the Commonwealth of Australia and the Murray-Darling Basin Authority, applied for summary judgment under section 31A of the Federal Court of Australia Act 1976 (Cth), arguing the applicants had no reasonable prospect of successfully prosecuting the proceeding.

The Court considered the legal issues, including whether the challenged provisions were made or capable of being made pursuant to the trade and commerce power, whether the Act discriminated against interstate trade, whether it curtailed the capacity of Basin States to function as such, and whether the applicants had standing to bring the claims. The Court concluded the challenged provisions were not made or capable of being made pursuant to the trade and commerce power but rather an exercise of power to legislate in respect of external affairs. The Act did not discriminate between inter and intrastate trade in a protectionist sense, nor did it curtail the capacity of Basin States to function as such. The Court also found the applicants did not have a special interest beyond an emotional or intellectual satisfaction and that the reduction in water entitlements did not amount to acquisition of property.

The Court found the applicants had no reasonable prospect of success on each of the constitutional challenges, as the success of the proceeding depended on propositions of law which would contradict binding High Court authority. The Court concluded the proceeding was dependent on a proposition of law which would contradict a binding decision of the High Court and, therefore, the applicants had no reasonable prospect of success. The Court made a judgment under section 31A for the respondents in the proceeding, dismissing the proceeding and ordering the applicants to pay the respondents' costs.