South Australia v Commonwealth [1962] HCA 10

High Court of Australia Dixon C.J. McTiernan, Kitto, Taylor, Menzies, Windeyer and Owen JJ. South Australia v Commonwealth [1962] HCA 10

ORDER The demurrer of the defendant to the plaintiffs' statement of claim allowed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

1962, Feb. 27 Dixon C.J.

This suit comes before the Full Court upon a demurrer to a statement of claim. The suit is brought by the State of South Australia and the Attorney-General of the State against the Commonwealth and its general purpose appears to be to establish the immediate obligatory force upon the Commonwealth of that part of the Railways Standardization Agreement of 20th October 1949 between the Commonwealth and the State of South Australia which concerns the standardization of the gauge of railway between Port Pirie and Broken Hill. The agreement is to be found in the schedule to the Railway Standardization (South Australia) Agreement Act 1949 (No. 83) of the Commonwealth and in the schedule to the Railways Standardization Agreement Act, 1949 (No. 49) of South Australia. The Commonwealth Act authorizes the execution of the agreement on behalf of the Commonwealth and the State Act approves the agreement on behalf of the State. The agreement is between governments in Australia, that is to say, between the Sovereign in right of the Commonwealth and the Sovereign in right of the State of South Australia, and it relates to governmental works and finances of major importance. The possibility of treating such an agreement between two governments as giving rise not merely to political obligations but to obligations enforceable at law arises from the federal system and the existence under that system of a court to the judicial power of which the Constitution gives supremacy. Section 75 (iii.) of the Commonwealth Constitution provides that in all matters in which the Commonwealth is a party the High Court shall have original jurisdiction and s. 78 says that the Parliament may make laws conferring rights to proceed against the Commonwealth or a State in respect of matters within the limits of the judicial power. Pursuant to this power s. 57 of the Judiciary Act 1903-1960 Cth enacts that any State making any claim against the Commonwealth whether in contract or in tort may in respect of the claim bring a suit against the Commonwealth in the High Court. Section 64 provides that in any suit to which the Commonwealth or a State is a party the rights of parties shall as nearly as possible be the same, and judgment may be given and costs awarded on either side, as in a suit between subject and subject. There have been differences of opinion as to whether s. 64 is limited to questions of procedure or extends to the substantive law governing the liability put in suit: see Asiatic Steam Navigation Co. Ltd. v. The Commonwealth [1] and the cases there cited. But Kitto J. expressed in that case [2] the opinion that when one reads Farnell v. Bowman [3] the conclusion seems inevitable that the rights referred to in s. 64 include the substantive rights to be given effect in the suit. If this be so it would still be necessary to resort to s. 79 and s. 80 of the Judiciary Act, for in a suit between subject and subject these sections direct where this Court shall go for the substantive law (cf. Deputy Federal Commissioner of Taxation v. Brown [4] ). If s. 64 be limited to procedure, s. 79 and s. 80 will apply directly.