Bank of New South Wales v Commonwealth

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Bank of New South Wales v Commonwealth
Coat of Arms of Australia.svg
Court High Court of Australia
Full case nameBank of NSW & ors;
Bank of Australasia & ors;
Victoria;
South Australia; and
Western Australia
(Plaintiffs)
v
Commonwealth;
Treasurer of Australia; and
Commonwealth Bank
(Defendants)
Decided11 August 1948
Citation(s) [1948] HCA 7, (1948) 76 CLR 1
Case history
Subsequent action(s) Commonwealth v Bank of New South Wales [1949] UKPC 37, [1950]  AC  235;
[1949] UKPCHCA 1, (1949) 79  CLR  497
Case opinions
Nationalisation of private banking amounts to a violation of an individual right to engage in particular types of trading and commercial activity under s 92. Failure to provide for the provision of interest on compensation meant the acquisition of bank shares and business was not made on "just terms".
Court membership
Judge(s) sitting Latham CJ, Rich, Starke, Dixon, McTiernan and Williams JJ

Bank of New South Wales v The Commonwealth, also known as the Bank Nationalisation Case, is a decision of the High Court of Australia [1] that dealt with the constitutional requirements for property to be acquired on "just terms", [2] and for interstate trade and commerce to be free. [3] The High Court applied an 'individual rights' theory to the freedom of interstate trade and commerce that lasted until 1988, when it was overturned in favour a 'free trade' interpretation in Cole v Whitfield . [4]

Contents

Background

Comfortable in government after two strong election wins, the Labor government of Ben Chifley announced in 1947 its intention to nationalise private banks in Australia. To accomplish this goal the Parliament passed the Banking Act 1947 . [5] Under the Act, shares in the private banks would be owned by the Commonwealth Bank of Australia, which in turn would be owned by the Federal Government. [6] The proposal was controversial, and the constitutional validity of the law was challenged by a number of banks, including the Bank of New South Wales, as well as the non-Labor states of Victoria, South Australia and Western Australia. [7] The banks were represented by a formidable legal team, [7] with the Australian incorporated banks represented by Garfield Barwick KC , [1] :at p. 7 who would later become the Chief Justice, and the United Kingdom incorporated banks represented by Frank Kitto KC , [1] :at p. 37 who would later be appointed to the High Court, while the Commonwealth was represented by the former High Court judge H. V. Evatt KC . [1] :at p. 49

Decision

The Court hearing lasted for a record 39 days. [7] The summary of the parties arguments occupies 143 pages of the Commonwealth Law Report. [1] :at pp. 7–149 A number of arguments were put to the Court, most of which were rejected.

However the Court declared the law invalid on four grounds, albeit by different majority of judges: [7]

Aftermath

The Commonwealth government appealed the decision in the Judicial Committee of the Privy Council, in Commonwealth v Bank of New South Wales (1949). [9] The Privy Council affirmed the High Court's decision.

At the 1949 federal election the Chifley government lost power, ostensibly due to the problems regarding this legislation and the Court case. [10]

This particular understanding of s 92 would remain highly influential, until it was overturned in favour a 'free trade' interpretation in Cole v Whitfield . [4]

See also

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References

  1. 1 2 3 4 5 6 7 8 Bank of New South Wales v Commonwealth [1948] HCA 7 , (1948) 76 CLR 1 (11 August 1948), High Court (Australia).
  2. 1 2 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 ...".
  3. 1 2 Constitution (Cth) s 92 Trade within the Commonwealth to be free.
  4. 1 2 Cole v Whitfield [1988] HCA 18 , (1988) 165 CLR 360(2 May 1988), High Court (Australia).
  5. Banking Act 1947 (Cth).
  6. Ben Chifley, Prime Minister (15 October 1947). "Banking Bill 1947: Second Reading". Parliamentary Debates (Hansard) . Commonwealth of Australia: House of Representatives. pp. 804–5, 808..
  7. 1 2 3 4 Hull, Crispin (2003). Ch 2 Major Cases. The High Court of Australia: celebrating the centenary 1903–2003. Lawbook Co. ISBN   0-455-21947-8.
  8. Constitution (Cth) s 75 Original jurisdiction of High Court.
  9. Commonwealth v Bank of New South Wales [1949] UKPC 37 , [1950] AC 235; [1949] UKPCHCA 1 , (1949) 79 CLR 497(26 October 1949), Privy Council (on appeal fromAustralia).
  10. "A policy backed by a mandate". The Age . 23 February 1950. p. 2 via National Library of Australia.