New South Wales v Commonwealth (1990)
| New South Wales v Commonwealth | |
|---|---|
 |
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| Court | High Court of Australia |
| Full case name | New South Wales, South Australia and Western Australia v The Commonwealth of Australia |
| Decided | 8 February 1990 |
| Citation(s) | (1990) 169 CLR 482; [1990] HCA 2; (1990) 90 ALR 335 |
| Case opinions | |
| (6:1) Section 51(xx) of the Constitution does not permit the Commonwealth to make a law for the incorporation of trading or financial corporations nor does it permit the Commonwealth to prohibit the states from making laws with respect to the incorporation of companies. (per Mason CJ, Brennan, Dawson, Toohey, Gaudron & McHugh JJ; Deane J dissenting) | |
| Court membership | |
| Judge(s) sitting | Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron & McHugh JJ |
New South Wales v The Commonwealth, the Incorporation Case, was a decision handed down in the High Court of Australia on 8 February 1990 concerning the corporations power in s51(xx) of the Commonwealth Constitution. The states of New South Wales, South Australia and Western Australia brought an application seeking a declaration as to the validity of certain aspects of the Corporations Act 1989 (Cth).
Section 51(xx) of the Constitution provides:
In an early High Court case, Huddart, Parker & Co Ltd v Moorehead, the corporations power had been construed extremely narrowly, mostly through adherence to the doctrine of reserved state powers which was later abandoned in the Engineers' case. The five justices in Huddart, Parker were of the opinion that the corporations power was confined to companies already in existence and did not extend to their creation.
However, 60 years on, the High Court declined to follow Huddart, Parker in the case of Strickland v Rocla Concrete Pipes Ltd. This was based on the fact that the decision in Huddart, Parker had relied on the now defunct theory of reserved state powers. This decision led to a significant revival in the use of the corporations power.
Corporations law in Australia had historically mirrored developments in English law and was mostly the concern of each separate state legislature. Thus, despite the reliance on the English framework, significant differences emerged between each state's corporations legislation.
After the Second World War it became increasingly clear that these legislative differences were creating unnecessary costs for companies operating nationally. Thus, the states and the Commonwealth co-operated in the formation of uniform national companies legislation which passed in each jurisdiction by 1962. The difficulty with this scheme was that it did not provide for uniformity in amendment of the legislation and with changes of government and policy each state's legislation once again developed on separate lines.
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