The long awaited decision of the High Court of Australia on the validity of certain pivotal sections of the Corporations Act 1989 (Cth), delivered on 8 February 1990, has settled at least for the foreseeable future that the corporations power in s 51 (xx) of the Commonwealth Constitution includes no power of incorporation. This decision in New South Wales & Others v Commonwealth of Australia (hereafter referred to as the Corporations Act case) aroused considerable public and commercial interest if not concern, not only in view of its significant impact on Australian commerce but equally in being an uncharacteristic set back for Commonwealth power.

Whether or not s 51 (xx) encompasses the power to provide for the incorporation of trading and financial corporations has been the subject of intense academic debate? Until this year, judicial consideration of the issue was scant and merely obiter dicta. The enactment by the Commonwealth of the Corporations Act 1.989 squarely raised this issue for the first time.3 The challenge as to the constitutional validity of certain provisions of chapters 2 and 5 of the Act was brought by New South Wales, South Australia and Western Australia and proceeded by way of a stated case to the Full High Court.