Ritter v Godfrey

The Commonwealth and the Central Wool Committee brought an action against the Colonial Combing, Spinning and Weaving Co. Ltd. to recover damages for breach of contract. The company also brought a cross-action against the plaintiffs. The dispute concerned three agreements entered into between the parties between March 1917 and September 1918, which involved the Commonwealth Government granting consent to the company's sale of wool tops in return for a share of profits, or the company acting as an agent for the Commonwealth in manufacturing wool tops for an annual sum, or a combination of both. The case was heard in the High Court of Australia.

The primary legal issue before the Full Court was whether the Commonwealth Executive Government possessed the legal power to make or ratify these agreements independently of any Act of Parliament or regulations made thereunder. This question necessitated an examination of the scope of executive power as defined by Section 61 of the Constitution, and whether the agreements fell within the constitutional authority of the Commonwealth Executive.

The Court held that, apart from any statutory authority, the Executive Government of the Commonwealth lacked the power to enter into or ratify the agreements. The reasoning applied was that the agreements, in so far as they purported to bind the company to pay money to the Government as consideration for consents, constituted taxation, which is void without parliamentary authority, following the principle in *Attorney-General v. Wilts United Dairies Ltd.*. Furthermore, to the extent that any agreement obligated the Government to pay remuneration to the company for manufacturing wool tops, it constituted an appropriation of public revenue, which is also void without legislative sanction, as established in *Mackay v. Attorney General for British Columbia*. The Court also noted the constitutional principle that Ministers are responsible to Parliament, implying that Parliament's discretion over public expenditure should not be fettered by executive action without legislative approval.

The Court answered "No" to the question of whether it was within the legal power of the Commonwealth Executive Government, apart from any Act of Parliament or regulation thereunder, to make or ratify the agreements. Consequently, no answer was required for the subsequent question regarding the necessity of Governor-General in Council approval.