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.
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.
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.
[14] Rich J held that "The Constitution draws a clear distinction – well known in all British communities – between the legislative, executive and judicial functions of Government of the Commonwealth."
Barton J held that the Constitution gave the Parliament an absolute discretion as to what adjudicatory or administrative powers it deemed necessary for the Inter-State Commission.
of the Constitution enables Parliament to make laws for the peace, order, and good government of the Commonwealth with respect to Trade and commerce with other countries, and among the States.
[20]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.