New South Wales v Commonwealth,^[1] commonly known as the Wheat case,^[2] or more recently as the Inter-State Commission case,^[3] is a landmark Australian judgment of the High Court made in 1915 regarding judicial separation of power. It was also a leading case on the freedom of interstate trade and commerce that is guaranteed by section 92 of the Constitution.^[4]

In 1914 there were rising prices in Australia for various commodities, including wheat, caused by a drought in Australia from 1911 to 1916 and the outbreak of World War I in July 1914.^[5] The initial response of the Parliament of NSW was to fix the price of wheat at 4s 2d (4 shillings and 2 pence) per bushel while the then market price was 5 p higher at 4s 7d.^[6] Farmers and merchants refused to sell their wheat at that price and resulted in the Government seizure of wheat stored at railway yards.^[7] By December 1914 the market price in Victoria had risen to 5s 6d.^[5] The NSW Parliament passed the Wheat Acquisition Act 1914 to compulsorily acquire wheat in NSW and for varying or cancelling contracts for the sale and delivery of wheat,^[8] paying a price of 5s per bushel of wheat acquired.^[5] The acquisition necessarily prevented the performance of any existing contracts for the sale of wheat in NSW to be exported to another State.

In January 1915, the Commonwealth applied to the Inter-State Commission for an order to prohibit the NSW Government and the NSW Inspector-General of Police from preventing the exportation of wheat to other States on the basis that this acquisition infringed the Constitution's guarantee of freedom of interstate trade and commerce. The commission consisted of a chief commissioner, Albert Piddington, who had been briefly appointed to the High Court but resigned before hearing a case,^[9] and two laypersons, George Swinburne and Nicholas Lockyer (Comptroller-General of Customs). The Inter-State Commission found that the NSW Wheat Acquisition was invalid and made the order sought by the Commonwealth, with Swinburne and Lockyer finding that NSW had contravened section 92 of the Constitution^[4] by compulsorily acquiring wheat which was the subject of contracts for interstate sale and was in the course of interstate transport. Piddington disagreed, holding that the Act was a valid exercise of the power of a State to compulsorily acquire food for the civilian population.^[5]

NSW appealed to the High Court, challenging the decision not only on the basis that NSW contended that it had not infringed the freedom of interstate commerce, but challenged the very foundation of the Inter-State Commission. The argument was that the Inter-State Commission Act 1912,^[10] was contrary to the separation of powers that was implicit in the Constitution. The argument had its foundation in the structure of the Constitution, where chapter 1 dealt with the Parliament, chapter 2 with the Executive Government and chapter 3 with the Judicature. The Inter-State Commission is not within any of these chapters, instead it is within chapter 4 which deals with finance and trade.

The idea that the executive is unable to exercise judicial power has its origins in the 1607 decision in the Case of Prohibitions which held that the King had no right to personally sit as a judge and interpret the law.^[11] The more immediate precursor was the separation of powers under the United States Constitution including the power of the Supreme Court to review whether a law passed by Congress was unconstitutional.

The High Court upheld the appeal by NSW on both grounds, the majority deciding that the strict insulation of judicial power was a fundamental principle of the Constitution. All judges held that the compulsory acquisition of all wheat, even though it included wheat that was the subject of interstate trade, did not contravene the freedom of interstate trade that was guaranteed by section 92 of the Constitution.^[4]

The Wheat case sounded the death knell, not only to the Inter-State Commission, but also to the combined function approach to administrative adjudication in Australia.^[21] The decision continues to have ramifications for both federal courts and non-judicial tribunals and has been followed in numerous High Court decisions, including

• Waterside Workers' Federation of Australia v J W Alexander Ltd where the majority of the High Court held that because the President of the Commonwealth Court of Conciliation and Arbitration was appointed for 7 years and not life as required by Chapter 3 of the Constitution, the Court could not exercise judicial powers of the Commonwealth.^[22]
• British Imperial Oil Co Ltd v Federal Commissioner of Taxation a power of appeal against an income tax assessment was part of the Judicial power of the Commonwealth which could not be conferred upon a Board of Appeal.^[23]
• Silk Bros Pty Ltd v State Electricity Commission (Vict) a power to determine applications by landlords for recovery of premises and providing for the enforcement of the Board's orders were an invalid attempt to confer Judicial power on a body that was not a Federal Court.^[24]
• R v Davison a registrar was not an officer of the Bankruptcy Court and a legislative attempt to confer upon a registrar the power of making a judicial order was therefore void.^[25]
• R v Kirby; Ex parte Boilermakers' Society of Australia (Boilermakers' case) established the second limb of the separation of powers doctrine in that a Federal court established under Chapter 3 of the Constitution could not exercise executive power of the Commonwealth.^[26]
• Re Wakim; Ex parte McNally that while the constitution permitted the Commonwealth to vest jurisdiction in State Courts, it did not permit the States to vest jurisdiction in Federal Courts.^[27]