Inglis v Commonwealth Trading Bank of Australia

(1969) 119 CLR 334

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(Judgment by: Owen J)

Between: Inglis
And: Commonwealth Trading Bank of Australia

Court:

Judges: Barwick CJ
Kitto J
Taylor J
Windeyer J

Owen J

Subject References:
Constitutional Law (Cth)

Hearing date: 19-20 May 1969
Judgment date: 4 September 1969

Sydney

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Judgment by:
Owen J

The appellants in person issued a writ out of this Court against the Commonwealth Trading Bank of Australia (which I will call the "Trading Bank") in which they claimed:

"1.

An injunction to restrain the defendant Bank and its servants from taking any action under demand notice authorized by the defendant and signed by its servant and manager, Roger Francis Berkeley Fitzhardinge, and dated 30th August 1968, the said demand is for the payment of $31,641.16 to the defendant by the plaintiffs.

2.

A declaration that the plaintiffs owe no sum to the defendant either under Indenture of Mortgage registered No 27/8497 or otherwise but that the defendant is indebted to the plaintiffs and an order that the defendant return the title deeds to the land 'Lammermuir' to the plaintiffs immediately.

3.

An injunction to restrain the defendant its agents or servants or otherwise from molesting the plaintiffs in any manner or form in their possession of their property known as 'Lammermuir', on Lake Meadowbank, in the Derwent Valley, Tasmania.

4.

An order that the defendant pay exemplary damages to the plaintiffs for conspiring to libel and libelling the first named plaintiff in the letter written by the defendant's former manager in Tasmania, Edwin Chester Gifford, to the then general manager of the defendant on 28th December 1962, whereby the plaintiffs have been much injured in their property, credit and reputation and have suffered damage and injury and the damage and injury has continued since the said 28th December 1962, and is still continuing.

5.

A declaration that the defendant and its servants have conspired to libel and have libelled the first named plaintiff.

6.

A declaration that the defendant and its servanrs have conspired with the Hobart solicitors Peter Benson Walker and Peter Hamilton Tilley Stops of 116 Collins St., Hobart, to aid and abet the aforesaid Hobart solicitors to defraud and cheat and hoodwink and deceive the plaintiffs.

7.

A declaration that the defendant and its servants have been in breach of their statutory duty towards the plaintiffs and have acted ultra vires their powers to the injury and damage of the plaintiffs.

7A.

Damages for breach of contract.

8.

Damages.

9.

Such sum as may be allowed on taxation for costs.

10.

Such other order, declarations or injunctions as to the Court may seem just.

11.

An order that title to the land 'Lammermuir' aforesaid vest in the plaintiffs unencumbered by any alleged debt to the defendant." (at p343)

2. It is impossible to discover from these allegations what exactly are the grievances of which the plaintiffs complain. What is clear, however, is that in an endeavour to bring the case within the original jurisdiction of this Court the appellants claim that in respect of these grievances, whatever they may be, the "Trading Bank" is "a person being sued on behalf of the Commonwealth", within the meaning of those words in s. 75 (iii.) of the Constitution. I take that to mean that, by virtue of the legislation under which the "Trading Bank" is constituted and under which it conducts its banking business, it is a "part of, or an agency of, the central government", to use the words of Dixon J. (as he then was) in Bank of N.S.W. v. The Commonwealth (1948) 76 CLR 1 , at p 359, and was acting as such in the transactions, whatever they were, which gave rise to the appellant's complaints. In support of their contentions, the appellants, naturally enough, place much reliance upon the decision in the Banking Case (1948) 76 CLR 1 while the respondent contends that, in carrying out its banking functions, it is not a part of, or an agency of, the Commonwealth Government.

To determine these competing submissions it is necessary to compare the legislation which this Court was called upon to consider in the Banking Case (1948) 76 CLR 1 with that which was introduced by a series of Acts, the Commonwealth Banks Act, the Reserve Bank Act and the Banking Act, all of which were passed in 1959. In the Banking Case (1948) 76 CLR 1 it was held that the Commonwealth Bank, not, it should be noted, the "Trading Bank" which did not have a corporate existence until 1953, was "a person being sued on behalf of the Commonwealth" in proceedings taken to have declared invalid provisions of the Banking Act 1947 which purported to enable the Commonwealth Bank, as then constituted, to take over the businesses of the private banks and to do so, in effect, on the direction of the Commonwealth Government. The powers and functions of the Commonwealth Bank under the Commonwealth Bank Act 1945 and the Banking Act 1945 were summarized by Rich and Williams JJ. in that case (1948) 76 CLR, at pp 272, 273 and by Dixon J. (as he then was) (1948) 76 CLR, at pp 359, 360. I do not repeat what was there said.

It is, I think, sufficient for present purposes to say that while the Bank was authorized to carry on general banking business it was also a central bank and, if requested to do so, was required to act as the financial agent and banker of that Government. It controlled the Australian note issue. It was declared not to be liable to pay land or income tax or any State tax to which the Commonwealth itself was not subject. Its general monetary and banking policies were, in the last resort, subject to governmental control and in connexion with the acquisition of the businesses of the private trading banks under the Banking Act 1947 it was "completely subject to the dictation of the Treasurer". These were some of the considerations which led to the conclusion in the Banking Case (1948) 76 CLR1 that under the legislation then in force the Commonwealth Bank was an agent or instrumentality of the Commonwealth. But in the case of the "Trading Bank" a great many of these features do not exist.

It was set up in 1953 as a corporate entity for the purpose of carrying on general banking business, an activity which had earlier been committed to the Commonwealth Bank. The Act of 1953 was repealed by the Reserve Bank Act 1959 but by the Commonwealth Banks Act 1959 the "Trading Bank's" entity was preserved. The effect of the 1959 Acts was to repeal the Commonwealth Bank Acts of 1945, 1948, 1951 and 1953 and divide up the various activities previously carried on by the Commonwealth Bank amongst a number of separate corporate bodies, the Reserve Bank of Australia, the Commonwealth Banking Corporation, the "Trading Bank", the Commonwealth Savings Bank and the Commonwealth Development Bank. As a result of this division of functions the Reserve Bank is now the Central Bank and the banker and financial agent of the Commonwealth Government, and controls the note issue. The "Trading Bank", as its name suggests, does no more than carry on the general business of banking.

It is required to pay income tax and is, along with the private banks, subject to the wide powers and authorities conferred upon the Reserve Bank by the Banking Act 1959 relating to such matters as statutory reserve deposits, the mobilization of foreign currency, the policy to be followed by trading banks in relation to advances, foreign exchange control and the control of interest rates payable to or by banks. In all these respects the "Trading Bank's" functions differ widely from those which were exercised by the Commonwealth Bank under the earlier legislation. It is true that the Board of the Commonwealth Banking Corporation, under the Commonwealth Banks Act 1959, determines the "Trading Bank's" policy and controls its affairs and that from time to time that Board is required to inform the Government of the banking policy of the "Trading Bank", along with the policies of the Commonwealth Savings Bank and the Development Bank, and that if, in any case, a difference of opinion arises between the Board and the Government whether any such policy is directed to the greatest advantage of the people of Australia and has due regard to the stability and balanced development of the Australian economy and such difference cannot be settled by agreement between the Commonwealth Treasurer and the Board, the Government may in the last resort determine the policy to be adopted and must accept responsibility for the adoption of that policy. It is true also that the members of the Board of the Commonwealth Banking Corporation, other than the Secretary to the Treasury, are appointed by the Governor-General; that a close liaison is required to be maintained between the Corporation and the Treasury and that each is required to keep the other fully informed on all matters which jointly concern the corporation, the "Trading Bank", the Savings Bank, the Development Bank and the Treasury.

Furthermore the "Trading Bank" is required to pay to the Commonwealth one half of its net profits, after making provision for income tax. But notwithstanding these links between the Commonwealth Government and the "Trading Bank" and the fact that the Government may through the Reserve Bank exercise wide powers of control over its general banking policy as well as over the general banking policies of the private banks, I am of opinion that the "Trading Bank" in the conduct of its general banking business is not to be regarded as a part of, or an agency of, the Commonwealth Government so as to enable an action to be brought against it in the original jurisdiction of this Court as being "a person sued on behalf of the Commonwealth". (at p346)

3. I would therefore dismiss the appeal. (at p346)