Nelungaloo Pty Ltd v The Commonwealth

Nelungaloo Pty Ltd brought an action against the Commonwealth of Australia and others, seeking compensation for wheat acquired by the Commonwealth. The plaintiff alleged that the acquisition was unlawful and sought damages for conversion, or alternatively, the fair market value of the wheat. The defendants contended that the acquisition was lawful under the National Security (Wheat Acquisition) Regulations and that the plaintiff had elected to accept compensation determined according to those regulations.

The central legal issues before the High Court were the validity of the National Security (Wheat Acquisition) Regulations, particularly an order made on 16 November 1939, and the method of assessing compensation for acquired wheat. The Court was required to determine whether the order, which purported to acquire all wheat harvested in Australia from a specified date onwards, was within the scope of the Minister's powers under the regulations. Furthermore, the Court had to consider the effect of subsequent legislation, specifically section 11 of the Wheat Industry Stabilization Act (No. 2) 1946, which sought to retrospectively validate the order. The validity of a tax imposed by the Wheat Tax Act 1946 on acquired wheat was also in question, as it was argued to diminish the "just terms" of compensation required by the Constitution.

A majority of the High Court (Latham C.J., McTiernan and Webb JJ.) held that if a wheat grower voluntarily delivered their wheat to the Australian Wheat Board and accepted advances from the proceeds of sale, they elected to pursue compensation under regulation 19 of the National Security (Wheat Acquisition) Regulations and were bound by that election. Starke J. dissented on this point, finding that a pool constituted and administered in the manner provided by the regulations contravened section 51(xxxi) of the Constitution. The Court, with Rich, Starke, and Dixon JJ. dissenting on this specific point, found that section 11 of the Wheat Industry Stabilization Act (No. 2) 1946 validly retrospectively authorised the order of 16 November 1939, and that this section did not usurp judicial power but was within the defence power. However, Rich, Starke, and Dixon JJ. held that the tax imposed by section 6(1) of the Wheat Tax Act 1946 was invalid as it diminished the just terms of compensation.

The Court was evenly divided on the question of allowing the appeal. Consequently, pursuant to section 23(2)(a) of the Judiciary Act 1903-1947, the appeal was dismissed.