Butterworth v Commonwealth Bank of Australia [1916] HCA 68; (1916) 22 CLR 206 (26 October 1916)

HIGH COURT OF AUSTRALIA

Butterworth Plaintiff; and The Commonwealth Bank of Australia and Another Defendants.

H C of A

26 October 1916

Griffith C.J., Barton, Isaacs, Gavan Duffy and Rich JJ.

Sir William Irvine K.C. (with him Starke), for the defendants, in support of the demurrer.

Mitchell K.C. and Latham, for the plaintiff, contra.

Griffith C.J.

An interesting discussion was initiated on the question whether the Commonwealth Bank is a real entity or merely a name, but it is not necessary to deal with it. The action is brought to recover penalties from the Bank for breach of the provisions of the Victorian Banks and Currency Act 1915, which (sec. 3) applies to "every company firm or individual engaged in the ordinary business of banking by receiving deposits and issuing bills or notes payable to the bearer at sight or on demand." I remark, in the first place, that by these words two separate conditions are imposed, both of which must exist before any company, firm or individual can come within the Act. One is that it must be engaged in the ordinary business of banking by issuing bills or notes payable to bearer at sight or on demand. The meaning of that expression, as used in legislation, if it were open to doubt, is well shown by the Statute to which my brother Rich has referred me, 7 & 8 Vict. c. 32, which is entitled "An Act to regulate the issue of bank notes," &c., and recites that "Whereas it is expedient to regulate the issue of bills or notes payable on demand," &c., which the Act then proceeds to do. It is quite plain what is the meaning of "bills or notes payable on demand." The Commonwealth Bank is, by its Statute, forbidden to issue bills or notes payable to bearer on demand. Therefore, whatever else the Commonwealth Bank is, it is not a bank within the meaning of that section.

It was further argued that the Commonwealth Bank was either a company, a firm or an individual within the meaning of the Act. Certainly it is not a firm. Certainly it is not an individual. If there were any doubt, the use of the words "individual banker" in sec. 3 (3) and in sec. 5 shows that the word "individual" means individual human being. A very wide construction of the word "company" might perhaps be held to cover it. But I do not think that construction is justifiable.

On both grounds, therefore, the section has no application to the Commonwealth Bank, which is neither a company, a firm, nor an individual, and, if it were either, is not engaged in the ordinary business of banking by "issuing bills or notes payable to the bearer at sight or on demand." That is sufficient to dispose of the case so far as the Commonwealth Bank is concerned.

It is then said that the Commonwealth Bank is a mere abstraction which the Court should treat as a nullity, and that the only real person to be found is the defendant Miller, the Governor of the Bank, who, it is said, is an "individual engaged in the ordinary business of banking," &c. He is clearly not such a person within the meaning of the Act.

The plaintiff's case is, therefore, wholly without foundation.

Barton J.

I am of the same opinion. I do not think the subject is capable of serious discussion, unless perhaps by way of forensic argument, and I decline to waste time upon it.

Isaacs J.

I agree. There are other questions raised by the demurrer which it has not been necessary to argue. I only wish to say that it is not to be supposed that the reasons which I shall shortly mention are the only reasons which, if the matter were fully argued, might actuate me in determining the matter the same way. I merely decide that the Commonwealth Bank Act was validly passed, and that it is the Commonwealth Bank which acts as a bank and not Mr. Miller. That Bank is not, nor is he, a "banking company firm or individual banker" within the meaning of sec. 5 of the Banks and Currency Act 1915.

Gavan Duffy J.

I agree with what has been said by the Chief Justice.

Rich J.

I also agree with what the Chief Justice has said.

Judgment for the defendants.

Solicitors for the plaintiff, Strongman & Crouch.

Solicitor for the defendants, Gordon H. Castle, Crown Solicitor for the Commonwealth.