The first step in resuming normal practice after the war was the resumption of selling wool by auction and private sale after 30 June 1946.

From 30 June 1946, the Australian government introduced a subsidy for the purchase of wool to be manufactured into garments in Australia and sold for local consumption.

As a result, Australian Woollen Mills sued for breach of contract, whilst the government denied liability on the grounds that there was no legally binding contract between the parties.

The High Court ruled that there was no legally binding contract between the parties, as all the government had done was merely to make a statement on government policy (i.e. the subsidy), which alone was not an offer capable of acceptance.

"[1]: p 457 The Privy Council gave Australian Woolen Mills special leave to appeal, however dismissed the appeal, agreeing with the High Court that there was no contract to pay a subsidy.