I. INTRODUCTION

On 19 June 2003, five justices of the High Court of Australia handed down their decision in what appeared to be a routine commercial dispute. In Neat Domestic Trading Pty Ltd v AWB Ltd (NEAT),^[1] a small grain exporter, Neat Domestic Trading (Neat), challenged the decision of a significantly larger company—AWB International Ltd (AWBI)—that held statutory authority to approve all bulk wheat export licences.

Neat had repeatedly applied for permission to export wheat to Morocco and Italy, only to be rejected by AWBI each time. Although AWBI was a private company, it exercised decision-making authority under section 57 of the Wheat Marketing Act 1989,^[2] which required the Wheat Export Authority (WEA) to obtain written approval from AWBI before issuing any export licence. This arrangement effectively gave AWBI control over the entire wheat export market—a function typically reserved for the executive branch of government.

However, AWBI’s refusal to approve Neat’s export applications was not based on legislative guidelines or individual merit. Instead AWBI denied all third-party export licence applications as a matter of company policy—a decision aimed at protecting its monopoly and maximising returns for its own shareholders. After its sixth export application was refused, Neat initiated legal proceedings. It argued that AWBI’s blanket policy of refusing all third-party bulk wheat export licence applications, without regard to their individual merits, contravened fundamental administrative law principles, and sought review under the Administrative Decisions (Judicial Review) Act (ADJR Act).^[3]

But the majority of the High Court — Gleeson CJ, Hayne, McHugh, and Callinan JJ — disagreed. They held that AWBI’s position was not subject to judicial review because, despite its statutory role, its refusal to grant export permits was a commercial decision rather than an administrative decision made “under an enactment” within the meaning of the ADJR Act. As a result, AWBI’s exercise of government-like power escaped legal scrutiny — Neat was left with no recourse against a competitor that could block its access to all export markets, and this seemingly obscure case gave the government a tidy little workaround to one of the few protections offered by our Constitution: judicial review.^[4]

I remember reading this case in law school and wondering how four seasoned professionals in the justice business could pontificate their way to such a poor decision. Surely, when a private company is granted privileged decision-making powers over an entire national industry, those decisions should be guided by stringent legislative guidelines—or at the very least, a clearly defined policy framework. Allowing these sorts of decisions to be driven solely by the commercial interests of the deciding party, gives that party a substantially unfair advantage over all competitors in the market—conduct which, without the provisions of the Wheat Marketing Act,^[5] would have ordinarily been considered anti-competitive under the Trade Practices Act.^[6]

If it was the federal government’s intention to restrict all wheat exports by companies other than the WEA, it had the power to do so,^[7] just as it had done prior to the privatisation of the Australian Wheat Board in 1999.^[8] But establishing a legislated scheme that required export licences — which, in practice, would never be granted — seems precisely the kind of arrangement that ought to attract judicial oversight. Which is why the High Court’s decision has always struck me as counter-intuitive.

Never the less, I felt obligated to re-evaluate my opinion before writing this post. Accordingly, I went back and re-read the case, along with every cited authority, and examined the statutory interpretations the justices relied on — including whether AWBI’s decision was made “under an enactment” per the ADJR Act; the role of s 57 of the Wheat Marketing Act 1989 (Cth); and whether AWBI’s function was statutory or purely private…

I also reviewed the court’s interpretation of sections 5(2)(f) and 6(2)(f) of the ADJR Act, which are designed to ensure that discretionary powers are exercised fairly and with proper regard to the individual merits of each case. Then, just as I briefly began to question my original thinking, I reached the section of the judgment where the court examined the U.K. case of R v Panel on Take-overs and Mergers, Ex parte Datafin.^[9]

In Datafin, the English Court of Appeal held that judicial review could apply to private entities performing public functions—even where the decision-maker did not owe its existence to statute, and its decisions were not made pursuant to statutory power. The Court emphasised that it was the nature of the decision that mattered, rather than the source of the decision-maker’s authority. And this just seemed to make more sense.

And yet, the High Court took the opposite approach in NEAT. Rather than engaging with the broader implications of unchecked executive power, they appeared to obsess over the source of AWBI’s authority. It was here that I began to wonder if their obsession with precise statutory interpretation had led to a kind of legal myopia – one that created a constitutional blind spot. After all, while the Commonwealth Parliament is legislatively sovereign,^[10] their sovereignty must always be constrained by the Australian Constitution.^[11]

My view was affirmed in the judgement itself. Justice Kirby dissented. In his view, it’s the nature of the power exercised—not merely the identity of the actor—that should determine whether judicial review applies. He warned that allowing the executive to delegate statutory authority to private entities without oversight posed a serious risk to the integrity of administrative law:

“If the legislature confers powers and discretions on such a body, it must do so on the footing that it will be answerable in law for their proper exercise.” ^[12]

At the heart of his reasoning, Kirby criticised the court for focusing too much on AWBI’s legal status rather than its actual power. Though AWBI was a private company, its authority to block wheat exports came from legislation—yet the Court’s approach effectively shielded its decisions from accountability:

“The error of approach in this case is serious, because it allows the evasion of fundamental constitutional and administrative law principles simply by designating an entity as ‘private’ despite its statutorily conferred power.” ^[13]

Importantly, Kirby’s concern wasn’t simply theoretical. Unlike the U.S. Constitution, Australia’s constitution does not contain an explicit Bill of Rights. It relies instead on structural checks and balances—such as the separation of powers doctrine and the availability of judicial review to safeguard against government overreach.^[14]

But NEAT created a convenient loophole. If the government doesn’t want its decisions questioned, it can simply outsource them to a private company and wash its hands of the matter. And we’re now watching this influence reshape areas of Australia’s administrative landscape in real time.

Consider the federal government’s former proposal to privatise Australia’s visa processing system—a plan that sparked significant concerns about legal oversight. Though this proposal was ultimately scrapped when Labor formed government in 2022,^[15] the underlying concern remains: if a private contractor is vested with decision-making power under a government contract, yet remains unbound by administrative law principles, individuals adversely affected may be left with no meaningful way to challenge those decisions.

And the implications of NEAT extend beyond migration policy. In the area of privatised employment services, for instance, private providers operating under Workforce Australia determine welfare entitlements and enforce mutual obligation requirements. These decisions are administrative in character and grounded in statutory frameworks, yet they frequently fall into a legal grey area when it comes to accountability.^[16]

Legal Aid NSW has echoed these concerns, warning that the outsourcing of key public services—including Out of Home Care placements and decisions related to the National Disability Insurance Scheme (NDIS)—has led to fragmented service delivery and obscured accountability.^[17]

II. IN DEFENCE OF NEAT

Despite these examples, some scholars have defended the High Court’s decision, arguing that subjecting private corporations to public law review would create unworkable legal conflicts. In his award-winning essay defending the Court’s decision in NEAT, Caspar Conde presents a remarkably clear summary of the various judgments—far more understandably than in many of the administrative law textbooks I reviewed.^[18] He contends that although AWBI exercised statutory power, it remained a private entity whose corporate constitution expressly committed it to maximising commercial returns for wheat growers. On that basis, he argues that imposing public law standards—such as procedural fairness through judicial review—would create an untenable tension between AWBI’s corporate duty to maximise shareholder returns and its role in making licencing decisions.^[19]

Conde ultimately supports the Court’s conclusion that there is “no sensible accommodation” that could reconcile AWBI’s private law obligations with the demands of public law scrutiny.^[20] However, I respectfully disagree, for a number of reasons:

A. The Constitution should prevail

The Australian Constitution Act establishes the foundational rules for the nation’s governance as a federation. It defines the powers and relationships between the Commonwealth and State governments, outlines the structure and functions of the legislative, executive, and judicial branches, and affirms various rights of Australian citizens. As the highest law in Australia, all statutes and government actions must conform to its provisions.^[21] Importantly, the Parliament, Executive Branch, and High Court all owe their very existence to the Constitution.^[22]

Unlike ordinary legislation, the Constitution cannot be amended by the Parliament—it requires the approval of the Australian people through referendum, as set out in section 128. Just as Parliament cannot legislate constitutional change, it follows that any legislation it enacts, such as the Corporations Act,^[23] and the Wheat Marketing Act,^[24] should not, in its operation, influence or inadvertently negate the availability of constitutional guarantees.

If the opposing duties imposed by those Acts were genuinely untenable, Parliament ought to have provided clear legislative guidelines to enable AWBI to reconcile its conflicting obligations. The Court has the power to demand this,^[25] it is tradition alone that restrains it.^[26] I believe the Court erred in using this situation as rationale to insulate AWBI from judicial oversight. Later in this section I will propose a possible reason the Court may have chosen this path.

B. Where profit motives and public duties collide

Where profit motives and public duties collide, corruption is most likely to occur—and judicial oversight becomes most essential. This concern is not speculative, it is an obvious and predictable vulnerability that any reasonable person could anticipate—and no one should have been more alert to this than the Justices of the High Court. AWBI themselves later confirmed this through their conduct in the 2005 Wheat-for-Oil scandal.^[27] AWBI exploited its privileged position and government backing to funnel over $290 million in kickbacks to Saddam Hussein’s regime, disguising them as transport fees and routing them through a Jordanian front company. The scheme breached U.N. sanctions and was exposed by both the Cole Inquiry^[28] and a U.N. investigation,^[29] which revealed AWB’s systemic abuse of authority and a lack of oversight.

A more extreme example of corruption by private actors performing public functions is the U.S. Kids-for-Cash scandal, which exposed how profit-driven arrangements in the juvenile justice system led to egregious abuses.

Over several years, two Pennsylvania judges accepted millions of dollars in kickbacks from privately operated detention centres in exchange for sentencing thousands of children—many for minor infractions and some without legal representation. The misconduct went undetected for years because these institutions were privately run and thus evaded traditional government scrutiny.^[30]

Both of these examples demonstrate the dangers of outsourcing core public responsibilities without meaningful oversight. As the risk of corruption in such arrangements increases, so too should the requirement for judicial oversight—a conclusion contrary to that reached in NEAT.

C. Critics of the NEAT decision misunderstand its implications

In the final section of his essay, Conde contends that concerns about governments outsourcing power to avoid judicial review are misplaced and reflect a misunderstanding of the court’s actual findings. But this viewpoint is itself misplaced. Regardless of how the Court framed its decision, there is nothing to prevent Parliament from replicating the same flawed arrangement when delegating other executive powers.

If judicial review can be avoided simply by assigning power to a private actor and withholding guidance, then the requirements of the Constitution become discretionary. NEAT may not have created a slippery slope—but it certainly removed every barrier to one.

Conde frames the NEAT decision as a legitimate example of the justice system fulfilling its function—with the court determining when public law constraints should apply to private actors. Yet he offers no concrete alternatives for ensuring accountability when administrative law remedies do not apply. One can only assume he envisions a mix of private law remedies, market forces, or contractual mechanisms—but each of these is a far less practicable safeguard than extending judicial review to all government-like decisions, as this table explains.

Furthermore, if it was considered unreasonable to expect AWBI to balance its competing statutory responsibilities, it seems even more absurd to expect ordinary citizens to initiate expensive legal proceedings simply to access protections the Constitution already guarantees.

D. There may have been a deeper motive behind the majority’s reasoning

While reviewing the resources associated with NEAT, I noticed a surprisingly simple issue that escaped mention in all the material. During judicial review the Court assesses whether an executive decision was made in accordance with the law—it does not evaluate the merits of the decision, nor can it impose a new one.^[31]

In NEAT, there were no statutory guidelines governing how export licensing decisions were to be made. In the absence of any such legal criteria, judicial review would have been futile—because without law, there is no legal process to review.

Had the Court found in favour of judicial review, it would have been left, in effect, to examine a scheme in which export licences were required by law but effectively unobtainable. To confront this directly, the Court would have had to examine the legislation itself and acknowledge that the statutory framework was fundamentally defective. It is plausible the majority’s ruling was shaped, at least in part, by a reluctance to make such a finding—a reluctance rooted in tradition, shaped by Australia’s commitment to parliamentary supremacy and judicial restraint.

As Sir Anthony Mason observed:

“Our ingrained belief in these concepts, especially the supremacy of Parliament… has been largely responsible for an unwillingness on the part of our courts to undertake an activist role… This belief naturally led to the adoption of an approach to constitutional and statutory interpretation, described as ‘Legalism’, that is more formal than that adopted by the Supreme Court of the United States.” ^[32]

Unlike the American tradition of judicial intervention, Australian courts have long followed the British model, prioritising judicial restraint. In NEAT, the majority’s reasoning offered the most expedient way to avoid engaging with the substance of Parliament’s legislation. Yet in doing so, it established a precedent that enables power to operate unchecked—sidelining accountability in favour of corporate self-interest.

For more on the dangers of corporations, keep an eye out for my up-coming post:
How corporate self-interest is the root of all evil.

Justice Kirby understood that accountability is the backbone of lawful government. When unelected actors exercise binding decision-making power under legislative authority, there must be a legal pathway for review. As he later warned in Griffith University v Tang,^[33] the High Court’s ruling in NEAT had already caused “a serious reduction in accountability for the exercise of governmental power” and had “extended that error of approach”.^[34] If this trajectory continues, it threatens the very foundation of the rule of law.

III.CONCLUSION

The increasing tendency of governments to outsource essential public functions to private corporations—without clear guidelines or accountability—poses a slow-moving threat to democratic integrity, both in Australia and globally.

It raises a fundamental question: if the separation of powers and judicial review exist as checks and balances to safeguard against government overreach, yet the highest court in the land shrinks from confronting poorly drafted legislation, then who exactly is left to do the checking and balancing?

When the government engineers monopolies that serve corrupt corporate interests, and the judiciary refuses to intervene, we are reduced to waiting for election day—fingers crossed—hoping a new government might bother to clean up the mess. Surely that’s not what the framers of the Constitution had in mind.

And yet, more than two decades on, NEAT still stands—not just as precedent, but as permission. Permission to create corporate monopolies, to shield executive decisions from scrutiny, and to bypass our constitutional protections.

What a NEAT trick.

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Administrative Decisions (Judicial Review) Act Australian Constitution Act 1902 (Cth) Chief Justice Murray Gleeson Ex parte Datafin Judicial Review Justice Ian Callinan Justice Kenneth Hayne Justice Michael Kirby Justice Michael McHugh Neat Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277 R v Panel on Take-overs and Mergers