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Commonwealth v Bank of New South Wales

January 07, 2023

Commonwealth v Bank of New South Wales,[1] was a Privy Council decision that affirmed the High Court of Australia's decision in Bank of New South Wales v Commonwealth,[2] promoting the theory of "individual rights" to ensure freedom of interstate trade and commerce. The case dealt primarily with Section 92 of the Constitution of Australia.[3]

Commonwealth v Bank of New South Wales
CourtPrivy Council
Decided26 October 1949
Citation(s)[1949] UKPC 37, [1950] AC 235;
[1949] UKPCHCA 1, (1949) 79 CLR 497
Case history
Prior action(s)Bank of New South Wales v Commonwealth [1948] HCA 7, (1948) 76 CLR 1
Court membership
Judge(s) sittingLord Porter, Lord Simonds, Lord Normand, Lord Morton of Henryton and Lord MacDermott
Keywords
Nationalisation, banking

Background

After two strong election wins, the Australian Labor Party government of Ben Chifley announced in 1947 its intention to nationalise private banks in Australia. It achieved this process by passing the Banking Act 1947.[4] The policy proved very controversial, and the Bank of New South Wales challenged the constitutional validity of the law. The High Court found specific provisions of the law were invalid and struck them down.[2] The Commonwealth government decided to appeal the decision in the Privy Council and in doing so adopted a deliberate strategy of limiting the grounds of appeal to avoid seeking a certificate from the High Court under section 74 of the Constitution.[5][6][7]

 
Ben Chifley (centre) with HV Evatt (left) and Clement Attlee (right) at the Dominion and British Leaders Conference, London, 1946

High Court of Australia

The High Court held in Bank of New South Wales v Commonwealth that the Banking Act 1947 was unconstitutional on a number of grounds:

  • Section 92 of the Constitution,[3] in providing that "trade, commerce, and intercourse among the States ... shall be absolutely free." conferred a positive right on the banks to engage in the business of interstate banking.[2]: at pp. 388 
  • it involved the acquisition of property that was not "on just terms, contrary to section 51(xxxi) of the Constitution.[8] The problem with acquisition arose out of the Act's sections detailing the appointment of new directors for all private banks with the power to control, manage, direct and dispose of assets of those banks. Dixon J held that this was a "circuitous device to acquire indirectly the substance of proprietary interest."[2]: at pp. 349 
  • The Act, in setting up a "Court of Claims", invalidly attempted to oust the original jurisdiction of the High Court.[9][2]: at pp. 368 

Privy Council

The Privy Council endorsed the High Court decision in adopting the individual rights approach. Provisions of the Commonwealth law prohibited private banks from carrying out interstate business banking. Interstate banking transactions under the law were thus not "absolutely free" and hence in violation of Section 92 of the Constitution. The Law Lords held that a simple legislative prohibition of interstate trade and commerce would be constitutionally invalid, but a law seeking to regulate or prescribe rules as to the manner of trade and commerce would not necessarily be in breach of Section 92. In addition, the act was held to be not an act with respect to banking, and therefore invalid under s51(xiii), the banking power.

See also

Notes

  1. ^ Commonwealth v Bank of NSW [1949] UKPC 37, [1950] AC 235; [1949] UKPCHCA 1, (1949) 79 CLR 497 (26 October 1949), Privy Council (on appeal from Australia).
  2. ^ a b c d e Bank of New South Wales v Commonwealth [1948] HCA 7, (1948) 76 CLR 1 (11 August 1948), High Court (Australia).
  3. ^ a b Constitution (Cth) s 92 Trade within the Commonwealth to be free.
  4. ^ Banking Act 1947 (Cth).
  5. ^ Constitution (Cth) s 74 Appeal to Queen in Council.
  6. ^ Gowans, G.; Menhennitt C.I.; Phillips P.D.; Tait, J.B. (18 August 1948). "Opinion No. 1833: Re Banking case judgements" – via Australian Government Solicitor.
  7. ^ The High Court only once granted a s 74 certificate, in Colonial Sugar Refining Co Ltd v Attorney-General (Cth) [1912] HCA 94, (1912) 15 CLR 182.
  8. ^ Constitution (Cth) s 51(xxxi) "The Parliament shall, subject to this Constitution, have power to make laws for ... the acquisition of property on just terms ...".
  9. ^ Constitution (Cth) s 75.

References

  • Winterton, G. et al. Australian federal constitutional law: commentary and materials, 1999. LBC Information Services, Sydney.

January 07, 2023
commonwealth, bank, south, wales, privy, council, decision, that, affirmed, high, court, australia, decision, bank, south, wales, commonwealth, promoting, theory, individual, rights, ensure, freedom, interstate, trade, commerce, case, dealt, primarily, with, s. Commonwealth v Bank of New South Wales 1 was a Privy Council decision that affirmed the High Court of Australia s decision in Bank of New South Wales v Commonwealth 2 promoting the theory of individual rights to ensure freedom of interstate trade and commerce The case dealt primarily with Section 92 of the Constitution of Australia 3 Commonwealth v Bank of New South WalesCourtPrivy CouncilDecided26 October 1949Citation s 1949 UKPC 37 1950 AC 235 1949 UKPCHCA 1 1949 79 CLR 497Case historyPrior action s Bank of New South Wales v Commonwealth 1948 HCA 7 1948 76 CLR 1Court membershipJudge s sittingLord Porter Lord Simonds Lord Normand Lord Morton of Henryton and Lord MacDermottKeywordsNationalisation banking Contents 1 Background 1 1 High Court of Australia 2 Privy Council 3 See also 4 Notes 5 ReferencesBackground EditAfter two strong election wins the Australian Labor Party government of Ben Chifley announced in 1947 its intention to nationalise private banks in Australia It achieved this process by passing the Banking Act 1947 4 The policy proved very controversial and the Bank of New South Wales challenged the constitutional validity of the law The High Court found specific provisions of the law were invalid and struck them down 2 The Commonwealth government decided to appeal the decision in the Privy Council and in doing so adopted a deliberate strategy of limiting the grounds of appeal to avoid seeking a certificate from the High Court under section 74 of the Constitution 5 6 7 Ben Chifley centre with HV Evatt left and Clement Attlee right at the Dominion and British Leaders Conference London 1946 High Court of Australia Edit The High Court held in Bank of New South Wales v Commonwealth that the Banking Act 1947 was unconstitutional on a number of grounds Section 92 of the Constitution 3 in providing that trade commerce and intercourse among the States shall be absolutely free conferred a positive right on the banks to engage in the business of interstate banking 2 at pp 388 it involved the acquisition of property that was not on just terms contrary to section 51 xxxi of the Constitution 8 The problem with acquisition arose out of the Act s sections detailing the appointment of new directors for all private banks with the power to control manage direct and dispose of assets of those banks Dixon J held that this was a circuitous device to acquire indirectly the substance of proprietary interest 2 at pp 349 The Act in setting up a Court of Claims invalidly attempted to oust the original jurisdiction of the High Court 9 2 at pp 368 Privy Council EditThe Privy Council endorsed the High Court decision in adopting the individual rights approach Provisions of the Commonwealth law prohibited private banks from carrying out interstate business banking Interstate banking transactions under the law were thus not absolutely free and hence in violation of Section 92 of the Constitution The Law Lords held that a simple legislative prohibition of interstate trade and commerce would be constitutionally invalid but a law seeking to regulate or prescribe rules as to the manner of trade and commerce would not necessarily be in breach of Section 92 In addition the act was held to be not an act with respect to banking and therefore invalid under s51 xiii the banking power See also EditAustralian constitutional law UK company law UK public service law Russian Commercial and Industrial Bank v Comptoir d Estcompte de Mulhouse 1923 2 KB 630Notes Edit Commonwealth v Bank of NSW 1949 UKPC 37 1950 AC 235 1949 UKPCHCA 1 1949 79 CLR 497 26 October 1949 Privy Council on appeal from Australia a b c d e Bank of New South Wales v Commonwealth 1948 HCA 7 1948 76 CLR 1 11 August 1948 High Court Australia a b Constitution Cth s 92 Trade within the Commonwealth to be free Banking Act 1947 Cth Constitution Cth s 74 Appeal to Queen in Council Gowans G Menhennitt C I Phillips P D Tait J B 18 August 1948 Opinion No 1833 Re Banking case judgements via Australian Government Solicitor The High Court only once granted a s 74 certificate in Colonial Sugar Refining Co Ltd v Attorney General Cth 1912 HCA 94 1912 15 CLR 182 Constitution Cth s 51 xxxi The Parliament shall subject to this Constitution have power to make laws for the acquisition of property on just terms Constitution Cth s 75 References EditWinterton G et al Australian federal constitutional law commentary and materials 1999 LBC Information Services Sydney Retrieved from https en wikipedia org w index php title Commonwealth v Bank of New South Wales amp oldid 1100302453, wikipedia, wiki, book, books, library,

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