State of New South Wales; State of South Australia; State of Western Australia v The Commonwealth of Australia

The case before the High Court of Australia involved the Commonwealth of Australia as the respondent and the States of New South Wales, South Australia, and Western Australia as the applicants. The dispute concerned the interpretation and validity of certain provisions, specifically section 112, relating to partnerships and their potential overlap with federal law. Questions were referred to the Court pursuant to section 18 of the Judiciary Act 1903 (Cth).

The central legal issue before the Court was whether a law enacted by a State, such as one fixing the maximum size of a partnership, and a corresponding federal law, such as section 112 of the Corporations Act, could both be considered "laws with respect to partnerships" and, crucially, whether they could also be characterised as "laws with respect to corporations." The applicants argued that such provisions were indeed laws with respect to partnerships, but not necessarily laws with respect to corporations, particularly if they did not impose obligations on corporations.

The applicants' submissions, as presented by Mr Handley, contended that the prohibition in section 112 of the federal legislation was not wider than the facility available under Chapter 2 of the Corporations Act to incorporate under federal law. They illustrated a potential conflict where a State minister could set a maximum partnership size of 200, while the federal minister, under section 112, could set it at 100. This, they argued, highlighted that each would be a law with respect to partnerships. Furthermore, they submitted that neither law would be a law with respect to corporations because neither imposed any obligation on a corporation or an obligation incidental to an obligation on a corporation. The applicants sought to draw an analogy to the case of *Fontana Films* and argued that the present situation was even stronger in their favour.