New South Wales v The Commonwealth

The case of *New South Wales v. The Commonwealth* was heard by the High Court of Australia. The dispute arose from a petition filed by the Commonwealth against the State of New South Wales and its Inspector-General of Police before the Inter-State Commission. The Commonwealth alleged that the State had contravened provisions of the Constitution concerning inter-State trade and commerce through its actions under the *Wheat Acquisition Act 1914* (N.S.W.). The Inter-State Commission, by a majority, found the State Act invalid and granted an injunction against New South Wales, which led to the appeal to the High Court.

The High Court was required to determine two primary legal issues. Firstly, whether the Inter-State Commission had the constitutional authority to be constituted as a court with powers of adjudication, particularly the power to issue injunctions, as provided by Part V of the *Inter-State Commission Act 1912*. Secondly, the Court had to consider whether the *Wheat Acquisition Act 1914* (N.S.W.), which provided for the compulsory acquisition of wheat within the State and declared certain contracts for its sale void, violated Section 92 of the Constitution, which guarantees freedom of inter-State trade, commerce, and intercourse.

A majority of the High Court, comprising Griffith C.J., Isaacs, Powers, and Rich JJ., held that Section 101 of the Constitution did not empower the Commonwealth Parliament to create the Inter-State Commission as a court. They reasoned that the judicial power of the Commonwealth was vested in the High Court and other federal courts established under Section 71, and the Inter-State Commission, with its seven-year term of office for commissioners, did not meet the requirements of federal courts under Section 72. The Court interpreted the "powers of adjudication and administration" in Section 101 as referring to executive or administrative functions with incidental quasi-judicial powers, rather than the creation of a judicial tribunal. Consequently, Part V of the *Inter-State Commission Act 1912*, which purported to grant judicial powers, was deemed ultra vires. Regarding the *Wheat Acquisition Act 1914* (N.S.W.), the entire Court held that its provisions did not violate Section 92 of the Constitution. The Court reasoned that the State's power of expropriation was a sovereign power applicable to property within its territory, and the Act should be construed as applying only to matters within the State's competence, not invalidating it merely because its language was wide enough to cover inter-State commerce.

The High Court reversed the decision of the Inter-State Commission. It declared that the Commission lacked jurisdiction to issue the injunction and make the order for costs. However, the Court proceeded to consider the validity of the *Wheat Acquisition Act 1914* (N.S.W.) in a related suit, finding it to be intra vires the Parliament of New South Wales.