TRADING BANKS' CASE

Chronicle (Levin), 21 February 1948, Page 7

TRADING BANKS' CASE

(N.Z.P.A.-

-fieuter*

Legal Tilts At Act For Nationalisation \

Copyrtght)

MELBOUENE, Peb. 20. Legal submissions in the bank nationalisation case, by counsel for the private Australian ,banks -wrhich are challenging the valitlity of the Banking Act, have occuxiied the attention oi the Higli Court tliis'week. The ehiei counsel for the banlcs, Mr. G. Barwick, K.O., eoncluded his address on Wednesday and the argument was taken'up by Dr: Coppel, K.O. Mr. Barwick said the essential point was that the 1947 Bank Act impedea. free trade, commerce and intercourse between the Btat.es. That was obnoxious to and a contravention of Bection 92 of the Commomvealth Constitution which guaranteed the riglit of all Australians to trade freely between the States. Even if the Court decided the business o| banking wns not trade or commerce the provisions of the Act still contravened Bection 92. The Act authorised the probibition of all banking transactions by all existing trade banks except Btate banks, insofar as thev tracled. If tlie Act were fully exercised, the remission of the price of goods sbia inter-state and all fmancial intercourse inter-state of any kind could take place only through tTOvernmental agen^y. "Any person wanting to have any imancial intercourse with a person in any othe-r .Btate, must have resort to a Governmental agency. That is a necessary effect of this legislation, ' f he said. Mr. ' Barwick summed up his attack as follovvs:— r Pirstly, the Act was not authorised by any of the 49 paragraphs of Bection 51 of the Constitution, setting out the powers of Parliament. ' Secondly, the Act in three of its most radical provisions, those dealing With the acquisition and management ot private banks and tlie prohibition oi their carrying on business, was obnoxious to Bection' 92 of tlie Constitution. • Thirdly, insofar as the Act was justilied under paragraph 41 of Becticfn 51 of the Constitution relating to the Commoinvealth's power to ac(uire property, it did not provide " just terins. " Fourthly, the Act was an invasion oi the constitutional integrity of the Btates. Fiftly, the Act was inconsistent with Bection 105 (a) of the Constitution which empowers the Connmmwcaltti '.'to make agreements with Btates wun rcspect to the jjublic debts of the States. " Dr. Coppell said he would attack tlie Act on two points — Bection (5 of tlu Act and Bection 51 of the Constitution Bection (5 meant that if any provision of the Act could not be given full effect because it was nltra vircs,, the whole of the Act could operate to tlie extent it was consistent with the Constitution. "The keniel of uiv argument is that no section of this Act can operate alone after the appiication ot Bection 5 aiul niust be considored ii: relation to tlie whole Act.'-' The Court he said, could not rewrite the Act but must either pass or fail the entire legislation. Bection 5 did not autliorise the G'ourt itself to make the law. .The Ooutt had to iind on the law expressed in thii Act,Dr,. Coppel added that if Parliament .\as invn.iig tlie Court to deternune whai tlie legislature intended, tlien the whole Banking Act was invalid. Dealing with aspeets of the Act eov efiug the determination and paymeni of coinpensat ion for shares . and assets acquired under the Act, Dr. Coppei said the Act would not be objected fo if it provided for the acijuisition oi property and det ennination of compensation on just terms by a PederaJ Court. He proposed to argue that those conditioiis did not exist. He said Bection 40 of the Act excluded from componsation any person whoHiad a cJaim but who failed to give notice of it to the .Common wealt h Bank /within two montlis. A person living iji England might not lcnow of the elosing of the rcglater in time to give any notice within. the prescribed time. Dr. Coppel. said under Bection 51 of the .Constitution, t he power of Parliament to acquire property was deait with: The power. was general but had two, conditioiis, firstly, that the terins were just, and, secoiully that the acquisition law was made under conditioiis. wliere Parliament had power to make just laws. Dr. Coppel said Parliament was not given power to make Ia.ws in respect to purposes and it was under this desigiiation that the Banking Act could be placed. Bection 24 of the Act contained four verv sound reasops wliy the Act- must be "declared invalid. Thev were, firstly, the acquisition proposed in the section vvas not an acquisition of propeftv incidental to tlie subject matter of banking; secondly, the acquisition attempted was wider tlian could be justiiied on anv view of banking power; thirdlv, vvhat was to be acquired was not defin'ed witn anv certainty and acquisition failed for that reason; fourthly, "just terms" for compensation were not provided. Ihe -Act gave the Governnient power to take over Australian private tradnig banks and Australian assets of Engiis'i banks trading in Australia. Those EngJisli banks and the Btates of Vietoria, Bouth Australia, and Western Australia were also challenging tlie validitv of the. Act.

Dr. Coppel said the secontl .point which he raised meant that the Acl enabled the Common wealtli to take over the Australian business of a private bank and its business ov'erseas. Clearlv sueh wide acquisition power was beyond the banking power given to the Cominou wealtli under the Constitution. Alternativelv, he subniitted that tlie phrasing of the Act was " vague and uncertain. " There was no general criterion by which one#could ascertain' what was the Australian business of a bank which conducted business m Australia, the Hnited Ivingdom aird New Zealand. "As I see it, this is an Act which says, 'we will /take over an unspeeified indefinite part of your business,' " he said. If this section failed manv other sections of the Act which would not work without it, must also failo