The Commonwealth v New South Wales

The Commonwealth of Australia commenced an action against the State of New South Wales in the High Court of Australia, seeking damages for a collision between a vessel owned by the State and a motor-launch owned by the Commonwealth. The State of New South Wales applied to have the service of the writ set aside or proceedings stayed, arguing that the High Court lacked jurisdiction to hear the case without the State's consent.

The central legal issue before the High Court was whether it possessed the constitutional jurisdiction to entertain an action brought by the Commonwealth against a State without the State's consent. This involved interpreting the scope of the High Court's original jurisdiction as conferred by section 75 of the Constitution, particularly subsection (III) which pertains to matters in which the Commonwealth is a party, and considering the role of section 78 of the Constitution and relevant provisions of the Judiciary Act 1903-1920.

A majority of the Court, comprising Knox C.J., Isaacs, Rich, and Starke JJ., held that the High Court had jurisdiction to entertain the action based on section 75(III) of the Constitution. They reasoned that the term "matters" in section 75 encompassed justiciable controversies capable of determination by law, and that the Commonwealth, as a party, fell squarely within this provision. They rejected the argument that a State of Australia was a "sovereign State" in a manner analogous to a foreign power, and therefore not subject to suit without consent. Higgins J. reached the same conclusion, finding that while section 75 conferred jurisdiction over justiciable matters, it was section 78 of the Constitution, as implemented by the Judiciary Act, that provided the necessary legislative basis for making a complaint by the Commonwealth against a State justiciable.

The Court ordered that the application by the State of New South Wales to set aside the service of the writ or stay proceedings be dismissed.