The Commonwealth v Australian Commonwealth Shipping Board

The Commonwealth and the Attorney-General for the Commonwealth, on the relation of the Secretary to the Chamber of Manufactures in New South Wales, brought an action against the Australian Commonwealth Shipping Board and the Municipal Council of Sydney. The dispute concerned an agreement entered into by the Shipping Board to supply, deliver, and erect steam turbo-alternators for the Municipal Council of Sydney's power-house. The plaintiffs sought a declaration that the Shipping Board had acted *ultra vires* in entering into this agreement and an injunction to restrain further action. The matter came before the High Court of Australia on demurrers filed by both the Shipping Board and the Municipal Council of Sydney.

The legal issues before the court were twofold. Firstly, whether the Australian Commonwealth Shipping Board possessed the statutory power under the *Commonwealth Shipping Act 1923* to enter into the agreement for the supply and erection of turbo-alternators for a municipal power-house. Secondly, if the Act did confer such power, whether the *Commonwealth Shipping Act 1923* was within the constitutional legislative powers of the Parliament of the Commonwealth, particularly in relation to the defence power. Additionally, the court considered whether the Attorney-General for the Commonwealth had the right to bring such an action on behalf of the public when a public body allegedly transgressed its statutory powers.

A majority of the High Court, comprising Knox C.J., Gavan Duffy, Rich, and Starke JJ., held that the Shipping Board had no power to enter into the agreement. Their Honours reasoned that either the *Commonwealth Shipping Act 1923* did not confer the necessary power, or, if it did, the Act itself was beyond the constitutional authority of the Commonwealth Parliament. They found no constitutional power to authorise such a general commercial business activity, even if it could be argued as incidental to defence. Isaacs J. concurred, finding no authority in the Act for the agreement and no constitutional power to authorise it merely because it might be assistant to the Board's works. Higgins J. also agreed, concluding that the power was not conferred by the Act. The majority further held that if a public body constituted under Commonwealth law transgresses its statutory powers, the Attorney-General for the Commonwealth has the right to complain and seek a declaration and, if necessary, an injunction, irrespective of whether private injury has been alleged.

Consequently, the demurrers filed by both the Australian Commonwealth Shipping Board and the Municipal Council of Sydney were overruled, with costs awarded to the plaintiffs.