News that South Australian Premier Mike Rann is contemplating a High Court challenge to the federal Murray-Darling water deal is good news for constitutional lawyers, because it would result in the resolution of a question raised before Federation but never litigated. Such a case might even be in the long-term best interests of the river systems, although in the immediate term South Australian success would certainly require the whole deal to be renegotiated. It seems fairly unlikely that the current scheme can ever function effectively without reasonably free trade in water licences to create a price mechanism where river waters are used efficiently for the most valuable purposes.
I gather South Australia will argue that the Commonwealth and State legislation implementing the Murray-Darling water agreement is in breach of Constitution section 92 and thus invalid. Section 92 requires that interstate trade be “absolutely free”, and the High Court has ruled (in Cole v Whitfield and other cases) that this means free from protectionist burdens of any kind that advantage the traders of one state over those from others.
In the case of water, I assume the argument is along the lines that the cap on trading in water licences, which Victorian Premier John Brumby insisted on as the price of his State’s participation in the deal, represents a protectionist measure that favours Victorian and NSW farmers who are upstream from South Australia and therefore get the opportunity to extract too much water, with the cap then preventing free interstate trade in water extracted by Victorian and NSW farmers (or rather the licences that allow them to do so).
Like ANU constitutional lawyer George Williams, I think it’s a respectable argument that might well succeed. In fact concerns about water and the Murray-Darling were very much front and centre in the years leading up to Federation. It’s strange that the question hasn’t got to the High Court long before this.
One problem Rann might have, however, is his own big mouth. Judicial review remedies, both equitable and prerogative, are discretionary. Litigants can be denied relief if, despite establishing good grounds for review, they have been guilty of excessive delay or come before the court with “unclean hands”:
The State Opposition and some commentators believe the Rann Government should have taken Victoria to the High Court two years ago.
But Mr Rann says that would have been foolhardy.
“That would have been the dumbest thing for SA to do,” he said.
“If we’d mounted the court case two years ago we wouldn’t have got the $13 billion, we wouldn’t have got the independent commission and Victoria wouldn’t have handed over its powers.”