Re New South Wales

The matter before the High Court of Australia concerned an application by the Commonwealth of Australia, through its Acting Attorney-General, for declarations that certain sums were due and payable and unpaid by the State of New South Wales to the Commonwealth. These applications were made pursuant to the Financial Agreements Enforcement Act 1932. The State of New South Wales contested these claims, asserting various grounds for denial of liability and seeking to claim set-offs against the amounts demanded by the Commonwealth.

The central legal issues before the Court were whether the State of New South Wales was permitted to claim a set-off against amounts declared to be due and payable under the Financial Agreements Enforcement Act 1932, and the correct calculation of the sums owed by the State to the Commonwealth, considering various adjustments and credits. The Court was required to interpret the provisions of the Financial Agreements Enforcement Act 1932, particularly sections 5(1), 6, 7, 13(2), and 18, in conjunction with the Financial Agreement itself.

The Court reasoned that the Financial Agreements Enforcement Act 1932 did not permit a State to claim a set-off in proceedings of this nature. The Act's purpose was to enforce obligations arising under the Financial Agreement, and the procedure it established focused on determining whether amounts certified by the Auditor-General were indeed "due and payable and unpaid." The Court held that the State was limited to disputing the existence of such a debt, rather than introducing cross-claims or set-offs. While acknowledging some adjustments to the amounts claimed, the Court ultimately made a single declaration.

The Court declared that the State of New South Wales was indebted to the Commonwealth in the sum of £2,029,432 6s. 1d. This total comprised £910,203 15s. 7d. from the amount stated in the first Auditor-General's certificate and £1,119,228 10s. 6d. from the amount stated in the further certificate. The Court also addressed the treatment of moneys collected under proclamation, indicating these should be applied after judgment in satisfaction of the declared debt.