Bourke & Ors v State Bank of New South Wales

[1990] HCATrans 31

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S44 of 1989

B e t w e e n -

MICHAEL VINCENT BOURKE,

L & M HOLDINGS PTY LTD,

L.R.A. RESTAURANTS PTY LTD,

HUNTER DEVELOPMENTS PTY LTD,

EMAS PTY LTD, BONOTO PTY LTD,

KRYS PROPERTIES PTY LTD,

AVITO PTY LTD and TERENCE BOURKE

Applicants

and

STATE BANK OF NEW SOUTH WALES

Respondent

Cause removed pursuant to section 40(1)

of the Judiciary Act 1903

Bourke(2)

MASON CJ
BRENNAN J
DEANE J
DAWSON J
TOOHEY J

GAUDRON J

Mc-HUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 6 MARCH 1990, AT 10. 19 Afi:

Copyright in the High Court of Australia

ClT2 /l/CM 1 6/3/90

MR J.J. SPIGELMAN, QC: If the Court pleases, in this matter

I appear with my learned friend, MR M. CASHION, for the applicant.(instructed by J.M. Caruana,

Kay & Barry)

MR K. MASON, QC, Solicitor-General for the State of New

South Wales:  I appear with my learne~ friend,

MR L.S. KATZ, for the respondent and the Attorney-General

for New South Wales intervening.(inst~ucted by

P.W. Kearns)

MR G. GRIFFITH, QC, Solicitor-General for the Commonwealth: If

the Court pleases, I appear with my learned friends,

MR D. ROSE and MR J.S. HILTON, for the Attorney-General

of the Commonweal th intervening • We appear to support

the validity of legislation but otherwise in the

interests of the respondent.(instructed by the

Australian Government Solicitor)

MR K.H. PARKER, QC, Solicitor-General for the State of

Western Australia: If it please the Court, I appear

with my learned friend, MR K. PETTIT, on behalf of for Western Australia)
the Attorney-General for the State of Western

MR H.C. BERKELEY, QC, Solicitor-General for the State of

Victoria: If the Court pleases, I appear with my

learned friend, MRS. O'BRIEN, for the

Attorney-General for the State of Victoria.	We
intervene in the interests of the respondent.

(instructed by the Crown Solicitor for Victoria)

MR J.J. DOYLE, QC, Solicitor-General for the State of

South Australia: If the Court pleases, I appear with

my learned friend, MISS C. SARRE, for the ;

Attorney-General for the State of South Australia,

to intervene also in support of the respondent.

(instructed by the Crown Solicitor for

South Australia)

MR G.L. DAVIES, QC, Solicitor-General for the State of Queensland:

May it please the Court, I appear with my learned

friend, MR. B.D. O'DONNELL, for the Attorney-General
for the State of Queensland, also in support for

the respondent.	(instructed by the Crown Solicitor
for Queensland)

MASON CJ:  Mr Spigelman.

(Continued on page 3)

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Bourke(2)

MR SPIGELMAN:  I hand up ten copies of an outline of our

submissions.

MASON CJ:	Yes.
MR SPIGELMAN:	Your Honours, we have three alternative

submissions, any one of which would lead to the

appeal being allowed. The first is tha~ the

financial corporation power operates in

accordance with its terms to the State Bank with

respect to its intrastate transactions and that

no implication or process of construction cuts

that down by reference to placitum(xiiD,·

Alternative, we say if· there is any such

construction or implication to be made it is

limited in effect to something which would

render the exclusion in placitum(xiiD inoperative

and the TRADE PRACTICES ACT does not meet that

test.

Third is the proposition that the State

Bank has crossed the border in accordance with

the agreed facts in the appeal book or the cause removed book and that, having done so, the whole of its activities fall within the second leg

of placitum(xii}; th~t is, State banking extending

beyond the limits of the State concerned.

With respect to the first way we put our

case, it was common ground below that the respondent

was a financial corporation. In paragraph 2

we have outlined where that is alleged in the

statement of claim; indeed, that was one of

the paragraphs that were struck out by His Honour.

We have given Your Honours references to some

of the powers and also to the agreed facts as

they appeared at page 32 of the cause removed

book.

The issue that was argued below was whether

or not placitum(xx)was in some relevant manner

cut down in its effect by reason of the exception

of State banking from the first part of placitum(xiiD

We say no and that in that respect placitum(x~ does

not differ from any of the other placita. We give

Your Honours examples there in paragraph 3 of our

outline of laws with respect to. each bf those

matters - would be capable of having an impact

in some way or another on the State Bank. Others

could be mentioned. The bankruptcy and insolvency

power~ clearly, the Bank's secutity position is

affected by that.and one could go through the whole

list. There is nothing we say in placitum(x~ that
makes it distinctive in this respect. It is true

that it is a.power with respect to persons not

purposes or subject-matter but we say that is not

a relevant distinction in this regard.

C1T3/1/SH	3	6/3/90
Bourke(2)

MR SPIGELMAN (continuing): It has never been accepted in this	Court, or at least not since the ENGINEERS 1 case,
that the fact that a power might be misused is some
reason for reading it down. But we submit that
there are other powers with respect to persons
in the CONSTITUTION and they can relevantly be
exercised against the State Bank or th~ insurance
power having identical exception against Government
insurance officers. For example, the Connnonwealth could
pursue it to the alien's power, pass a law with
respect to the banking activities of all aliens and
that would apply to State banks. Pursuant to the
race power the Connnonwealth could pass a law with respect to life insurance policies available to
Aborigines and that would apply to Government
Insurance Offices. So, too, we say with the power
in placitum (xx) with respect to trading and
financial corporations.

We invoke in this respect the doctrine now

approved in this Court with respect to the process
of characterization and quote, Your Honour, the

Chief Justice's observation in COMMONWEALTH V

TASMANIA, which was indeed referred to with

approval by the joint judgment of this Court in

ALEXANDRIA PRIVATE GERIATRIC HOSPITAL. We say that

it just does not cease to be a valid law with

respect to financial corporations because it may also

be characterized as a law with respect to State
banking.

In that regard, we would wish to give Your Honours one additional reference and that is to

Your Honour the Chief Justice's reasoning in

QUEENSLAND ELECTRICITY COMMISSION V THE COMMONWEALTH,

(1985) 159 CLR 192, at page 213 to 215. It is to

similar effect, although perhaps longer than the

passage we have referred to in the DAM's case.

May we draw particular attention with respect to

both those passages to Your Honour's consideration

of the approach to characterization adopted by

Sir John Latham in a number of cases which Your Honour

overruled and eventually with the approval of the

entire Court.

DAWSON J: Is the effect of this that the words "other than

State banking" have no real meaning at all because

the State Bank will always be a financial corporation

and if you can legislate under paragraph (xx) then you

need not worry about paragraph (xiii) .

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Bourke(2)

MR SPIGELMAN:  We submit not,that is not the effect of this,

the question is whether or not it is law with

respect to banking at all and we submit that the -

DAWSON J: No, it will always be law with respect to a financial

corporation.

SPIGELMAN:  That is not necessarily the case and as we pointed

out elsewhere it was not always the case that

State banking took a corporate form, though it is

now the case that it does.

DAWSON J: Well, perhaps I should qualify it then, if the

State Bank is in a corporate form then the argument

necessarily means that the words) "other than State

banking" have no meaning at all?

MR SPIGELMAN:  The first proposition for which we contend,that

may be the practical implications, in a sense, that
the Conmionwealth Parliament would be able to take
the corporation has the relevant subject-matter to

which it attaches legal consequences, but the second

way we put our case is that if there is some

implication in the corporation '.s power, or for that

matter the alien's power or the race power - the

personal power - that it is limited in some way only

as to striking down legislation which would render

the exception inoperative, in Your Honours phrase

give it some meaning,and we would submit that these

provisions of the TRADE PRACTICES ACT which

establish standards of general application to all

corporations do not meet that test. So it is the

second way we put our case, but the first way - there

is no doubt that the Conmionwealth Parliament by

making the touchstone the corporation would have,

in practical terms, be able to effectuate that result.

Your Honours, returning to the first way we

put our case the reason why the dicta to the contrary

and the reasoning of the contrary - they are not
entirely dicta	- in the cases relied upon by the

trial judge and set out in paragraph 5 should not be followed is that they are infected by the process of

characterization, or the approach to characterization,

which has now been rejected by this Court, namely

that one has a choice in the way - the Canadian

constitution has a choice of two mutually exclusive

lists - one has· to decide whether something ought

to be characterized in one way or another.

ClTS/1/JL	5
Bourke(2)

MR SPIGELMAN:  That is a process that is now rejected in

this Court. It was not as clearly rejected at the
time of the BANK NATIONALIZATION case, and we

submit that it was that which significantly affected

the reasoning of all of the Judges who found a

restriction in the corporation's power of this character in the BANK

case. Could I take Your Honours to 76 Cl~, and I only

wish to take Your Honours to the sections directly

referred to on this matter, to which we give page

references in our paragraph 5.

The first is at page 184 in the judgment

of the then Chief Justice. It is in a section which

begins on the previous page at 182, under the

subheading:

Construction of Legislative Powers: Pith

and Substance &c.

That already gives away the approach to characterization

being adopted by the then Chief Justice in this case.

He outlines the Canadian cases on page 182, and at the foot of it indicates the submissions of the Connnonwealth

Attorney that sought to distinguish them on the basis

of the incomparable structure of the Canadian

constitution, and this continues over the page, and

down at about point 7 in the first paragraph beginning

on 183, His Honour dismisses this approach, or the

submissions, by saying:

There are ..... grave difficulties in

the way of accepting the proposition that

a law which "touches and concerns" an

authorized subject matter is valid unless

it contravenes some express prohibition

to be found in the CONSTITUTION.

(Continued on page 6)

ClT6/l/FK	6
Bourke(2)

MR SPIGELMAN (continuing):  _ ·And he outlines an example

of the difficulties in the taxation power and

relies upon BARGER. Your Honours, BARGER is

no longer authority in this Court and we would,
in that regard, refer the Court to Your Honour

the Chief Justice's observations in MURPHYORES,

114 CLR 1, at page 23, with which two other m~wbers

of the Court agreed.

He goes on to indicate another e-xample.

An example like BARGER is to be found in

section 51(xx) and it is this paragraph that

is quoted against me and was referred to by the

judge below and it would appear relied upon.

We would submit that it is clear that His Honour

in this regard is approaching the matter from the same perspective as he did in other cases such as WEST and the MELBOURNE CORPORATION case

on the approach to characterization which has

now been overruled in this Court.

DAWSON J: Why do you say characterization? It is a question

of construction, really, is it not?

MR SPIGELMAN:	We say that it is a question of - - -
DAWSON J:	What you are really saying is that you construe

each paragraph of section 51 without reference

to the other paragraphs?

MR SPIGELMAN:  No, we do not make that submission but we

do say that there is no implication of this power

with respect - at this level, namely our first

proposition, that arises or any other power

in 51 that arises from the exception of State

banking.

DAWSON J: That is what I am putting to you. You say that

you construe (xx) without reference to (xiii).

MR SPIGELMAN:  One can construe it by reference to (xiii)

without giving - - -

DAWSON J:	Any effect to (xiii).
MR SPIGELMAN:	The effect of (xiii), we submit, is that

the banking power cannot be exercised in such

a manner as to control State banking and it does

not say anything about any other power.

DAWSON J: That is to say you construe each paragraph

separately. That is not a method of construction

that has been accepted by this Court, as far

as I know. It is certainly one I would not accept, that

you do not construe each paragraph in its context.

ClT7/1/ND	7
Bourke(2)
MR SPIGELMAN:	We totally accept the proposition that one

construes each paragraph in its context. What

we would submit is that one does not construe

paragraph (xx) as if it said "except State banking".

That is carrying the exception and giving it

a dominant weight in this paragraph and perhaps

other paragraphs.

DAWSON J: That is another question.

(Continued on page 9)

ClT7/2/ND	8
Bourke(2)
MR SPIGELMAN:	One can say that one has reference to

paragraph(xili)for the purpose of construing

placitum (xx) without saying that it is entitled

to dominant weight.

DAWSON J: Then your next proposition is that it has no.

effect.

MR SPIGELMAN:  That is our first proposition and our second

proposition is it has a particular kind of effect

but our first proposition is it has no effect.

DAWSON J: It is not a question of characterization; it is

a question of construction.

MR SPIGELMAN:	We submit that it would have been possible to describe the process that had gone on in the other
authorities to which reference is made in our
paragraph 4 as a process of construction also.
Characterization is probably accurately described
as a process of construction or at least it is a
step in the process of construction.

McHUGH J: But·this particular point is a question of

construction, is it not? If you take Sl(xxxi),

all the other provisions of the CONSTITUTION are

construed with that exception and on their face

most other powers in section 51 would give the

power to acquire property.

MR SPIGELMAN:  There is no doubt of that and the authority

for that in this Court is SCHMIDT's case and it

has always been applied and the reason for that,

the reason that one gives, if one might say, the

exclusion,· namely, the just terms reference if

I could describe that as an exclusion, the reason

one gives that dominant weight is that section Sl(xxx±) is

a different kind of power. As SCHMIDT''s case itself

found, it would have been implied, an implied

incidental power for the other heads of power to

have had a power to acquire property as part of
the sovereignty of the governmental system.	The

purpose of (xxxi) is to establish - or one of the
principal purposes - the exception and that is

why (xxxi) is not like (xiii) or (xiv1 the

insurance power,which relevantly are the same.

The purpose of the power is not to establish

the exception. We would distinguish the authorities

on (xxxi) in that regard to say that the exception

in (xiii) and (xiv) is an exception in accordance

with the terms of that power.

C1T8/l/SH	9	6/3/90
Bourke(2)
McHUGH ,J'.;_:	What about the arbitration power?	Do you

disregard its limitations about conciliation and

arbitration in relation to interstate col.'!'lmerce?

MR SPIGELMAN:  We would submit that if necessary although

it is not necessary for this case, but ~-e would

submit that the Connnonwealth Parliament could

under interstate trade pass laws with respect to

industrial disputes. Yes, that would be our

submission.

DAWSON J: Probably under the corporation's power too.

MR SPIGELMAN:  And under the corporation's power.

'	DAWSON J: It only needs a few in that event, does it not?
MR SPIGELMAN:  That would be our submission, but if we were

driven to distinguishing the conciliation and

arbitration power in the same way as the acquisition

power, we would say that it would be possible to

construe it in such a way as to draw the conclusion

that it was intended that that power be exhaustive

with respect to industrial disputes, but one can
not say the same,with respect?to a banking power,

and the best example of that is that there are other

placita in 51 that directly touch on banking such

as currency and the bills of exchanse power. There

are separate specific powers directly involved in

the business of banking. Now there are others which

are indirectly involved like the bankrupcy ar4d insolvency

power and some of the others that may be, but for

the banking power there are other express powers

which touch on the business of banking.

BRENNAN J: Mr Spigelman, is the choice then for paragraph (xiii)

this: to construe the words other than"State

banking" as words which are mere limitations upon

the power first granted, or as being reservations of

power to the States?

MR SPIGELMAN:  Our first proposition is, with respect, the first

way Your Honour put it, that it is a reference to

banking. With respect to the second way we put our

proposition, that is if there is an implication for
other powers arising from this exception, it is of
a more limited character. It is something to do with
whether or not the power becomes totally inoperative
or the exclusion becomes totally inoperative, and in

that respect arguments about reservation to the States may become material, though we would not

submit determinative.

DAWSON J:  Of course there is another way of doing it , it may

not be acceptible nowadays, but that is to construe

CIT9/l/CM	10
Bourke(2)

the corporation'spower as not extending to the
activities of the corporations, but merely to

the recognition of their status.

MR SPIGELMAN: Well, we would submit that there is authority

in this Court that would, unless reopened, I ~ean

there - - -

DAWSON J: True, but having regard to the history of the

particular paragraph, that comes perhaps closer to

the truth than anything else. I mean,obviously

what concerned the founding fathers was just that

question and the question of the activities of

corporations was something that never really

addressed themselves to with any precision.

MR SPIGELMAN:  But it is not exactly clear that the

founding fathers would have expected -if and to

the extent to which their intent is still determinative
of these matters, but it is not clear to the extent

to which they would have expected corporations to

become as nominate as they have become.

DAWSON J: Perhaps so, but the fact that paragraph (xx) is

couched in terms of persons, whereas. (xiii) is couched
in terms of activities, does suggest just that

division.

MR SPIGELMAN: Well, we do not understand any of our learned

friends on this occasion to be seeking Court's leave
to reopen the earlier decisions of this Court which
indicate that at least with respect to the trading

activities of trading and financial corporations,and

we are well within that in the.1PJ....DE PFAC.r.rtf:S A,_,r"'f, th.at

that falls within placitim «x)fairly and squarely.

DAWSON J: It may suggest the proper reconciliation of (xiii) and (xx.).

(Continued on page 12)

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Bourke(Z)

1:1R SPIGELMAN: That is so.

DAWSON J: In so far as banking activities are involved they

are not included in (xx:) but are included in (xiii).

1:1R SPIGELMAN: Yes, if Your Honour pleases, that is the

case against me and may I say th2.t I was

about to take Your Honours to the reasoning - - -

DAWSON J:	I am interrupting too much.
1:1R SPIGELMAN:	In the BANK NATIONALIZATIOII case which is

almost precisely stated in the terms that

You Honour just put it to me, but if I could just go back and indicate, in the BANK case,

I would just like to refer the Court to the

decision of Mr Justice Starke where at page 304, in a short passage, he notes that placitum (xx).

It is an independent power complete in

itself.

That is about point 3 or 4.

And, in my opinion, the power authorizes the

Commonwealth to

do certain things, then -

the carrying on business in Australia by

these corporations might be prohibited absolutely -

then -

the~ COT:-1STITUTION must be construed as one

whole document and it may well be that this

corporation power is confined to corporations

that are not within the banking power.

He leaves it open there but goes on to say this:	Be this as it may, this power does not, I	think, support the BANKING ACT 1947. The
banking power is the appropriate power and the
one upon which reliance must be placed.

Now, Your Honours, that sort of reasoning as to what

is the appropriate power is, we submit, directly

inconsistent with the Court's recent decisions on

characterization.

The same is true though less obviously so of

and that appears at page 256 and I say this	the joint judgment of Justices Rich and Williams
again occurs in a section of Their Honours' judgment

ClTl0/1/JL	12
Bourke(2)

where they deal with the "pith and substance"

point and line of reasoning in the Canadian

authorities. That begins at the foot of 253.

But having outlined that they come at page 256

to really saying:

But it is unnecessary to pursue t:\t.. meaning -

this is at the first paragraph -

because we are of opinion that it does not

apply to corporations whether created abroad

or within Australia engaged in the business

of banking. Placitum (xiii.) contains an

express exclusion of State banks from this

head of power.

It refers to MELBOURNE CORPORATION and what it

decided and says:

The ordinary way to constitute such banks would be to incorporate them -

no doubt by 1947 that was true -

Such banks would be trading or financial

corporations formed within the limits of the

Connnonwealth. If -

and this is very similar to the point Your Honour

Justice Dawson put to me -

pl. (xx.) was intended to apply to banks, the

Commonwealth Parliament would thereby acquire

legislative powers over State banks from which

it is expressly excluded by pl. (xiii.).

We say placitum (xx) is not alone in that. There are

numerous other placita which directly impinge on

State banking and then it says:

(Continued on page 14)

ClTl0/2/JL	13
Bourke(2)
MR S~IGELMAN (continuing):

It was contended that the placita could be reconciled by implying an exclusion.

and says, no, this is a question of construction,

there should not be an implied exclusion". It

really ought to simply say that banks were put in a

separate category, and we submit that if that line of reasoning is right - we first submit it is wrong, but

we alternately say it ought to be limited in such a

way as would not render the exclusion in placitum ~iiD,

and analogously (xiv), totally inoperative.

It is clear that at least Justice Rich

shared the approach to characterization which has

been rejected in this Court, and could I take

Your Honours there to the MELBOURNE CORPORATION case,

74 CLR, page 67 is the extract to which I wish to

take Your Honours, in about the sixth line there is

a passage beginning with:

It has been laid down frequently by the

Judicial Committee that in considering

the constitutional validity of legislation

it is necessary to look at the pith and

substance of the legislation,

and there refers to a Canadian case.

Moreover I think it is not competent for
the Commonwealth or a State under the
guise or the pretence or in the form of an

exercise of its own power to carry out an

object which is beyond its powers.

And then goes on to apply the doctrine of 'pith

and substance We do not understand him to be

limiting himself to some kind of pretence, but if

he is then we have no problem with that, but

otherwise it would appear in this passage that

His Honour shared the view as to characterization,

that is to say that one had to categorize things

once, and that if it is proper,the pitch and

substance,or the proper characterization was outside

Commonwealth power then, so be it, the Act was

struct down.

Now, all of the reasoning,we submit, in

the BANK NATIONALIZATION case, which is used against

us, is infected by this approach to characterization.

In STRICKLAND V ROCLA CONCRETE PIPES Mr Justice Menzies

returned to this issue and adopted a similar course

of reasoning,in part relying on the authority nf the

extracts from the BANK NATIONALIZATION case, 124 CLR 507,

ClTll/1/FK	14/ 15	6/3/90
Bourke(2)

and that is outlined at the paragraph beginning

in the middle of the page, "It is one", and

continuing over the page. He refers to 5l(xx)

as it stands in the CONSTITUTION, and he then

says:

It is one of a number of matte1s

enumerated in s.51 as subject matters

with respect to which Parliament bas been

given power to make such laws as it thinks

fit subject to the CONSTITUTION. Each

subject of enumeration is not exclusive of the

others and a limit upon one cannot be inferred

merely from the existence of another of more

particular scope. Nevertheless, when there is

to be found a limit in the definition of one

subject matter the others should not be

contstrued as enabling Parliament, by

legislation on a different subject matter,

to override that express restriction.

(Continued on page 17)

ClTll/2/FK	16
Bourke(2)

MR SPIGELMAN (continuing): Your Honours, that is the second

way we put our case and only if there is to be a

limitation it is something like that. It is some

overriding of the express restriction rather than

just something which touches or affects the

institution concerned:

Of this s. 51 (xxxi.) provides the simplest example -

and he was probably there referring to SCHMIDT's case;

he does not give a reference to it -

but in BANK OF NEW SOUTH WALES V THE COMMONWEALTH

(2) there is to be found another example,

namely a limitation upon s. 51 (xx.) arising from

the terms of s. 51 (xiii.). For the most part,

subject matter is expressed impersonally;

indeed, it is only in pars, (xix.), (xx.) and

(xxvi.) that the subject matter is persons.
Each of these paragraphs presents its own problems.

For instance, can Parliament, by legislation under par. (xix.), provide widowers' pensions

for aliens notwithstanding -

et cetera. Your Honours, he goes through,- I do not

think I need to read all to Your Honours. He again
makes reference to, I think, each of the placita

that Your Honours have asked me about this morning and we have given our responses to that. However,

at the end of this paragraph, he decides not to deal

with the submission of the Attorney-General, that

every Act beginning "Every alien shall" is a valid

law and says:

all we are here concerned with is a law relating

to the trading of trading corporations formed

within Australia. Prima facie such a law is

within power.

So here we are dealing with the trading activities of

financial corporations and whilst in this case, obviously,

he was not dealing with a corporation which fell within

the State banking exception, we submit that the issue

is, at least in the second way we have put our case, is
posed here; namely, an act of that character does not

override the express restriction, to use His Honour's

formula on the previous page.

Your Honours, the matter was left, we refer: to

again, by the then Chief Justice in the Trade

Practices Tribunal in the ST GEORGE COUNTY COUNCIL case.

We say he left the matter open. He just indicated that

that was yet to be resolved, we submit. We think there

was also a similar reference on another occasion by the

then Chief Justice Sir Harry Gibbs in a reference

that appears in my friend's learned submissions.

ClT12/l/LW	17	MR SPIGELMAN, QC	6/3/90
Bourke (2)

But, to the contrary, is the reasoning at least

of Mr Justice Higgins in the ENGINEERS'case and

perhaps in the joint judgment, though it is less clear

there. The ENGINEERS'case is at 28 CLR. The passage

in the decision of Mr Justice Higgins is at 162 point 9

where he, dealing there with placitum (xxxv), says

the very fact that it is excluded expra.:sly in banking

or insurance is a reason for not implying such an

exclusion in the case of placitum (xxxv) and the

relevant exclusion there was, as Your Honours will

recall, whether the Connnonwealth's power over

conciliation and arbitration could extend to State

instrumentalities. The point was a trading

instrumentality and this did not raise that question

that agitated the Court for some time as to whether

some administrative core of State activities - this

was a trading corporation.

This is an approach to reasoning which

Mr Justice Higgins used on a number of other occasions

and the other occasions are in identical terms.

I do not think I need give Your Honours additional

references. But there is also a reference of that

character in the joint judgment and that is at page 158.

(Continued on page 19)

ClT12/2/LW	18	6/3/90
Bourke(2)

MR SPIGELMAN (continuing):  At the foot of page 157,

Their Honours were there dealing with the

implications upon a line of previous authority

of the approach blowing up the implied immunities

and reserve powers doctrine which they had earlier

set forth in the judgment. They came to the _

RAILWAY SERVANTS' case and noted its second holding

was:

that State railways were specially

recognized by the CONSTITUTION as "State

instrumentalities" for "governmental functions" - and by reason of that fact, presumably -

beyond the ambit of Commonwealth legislative

power.

Over the page, they come back to this. At about

the fifth line they say:

The first ground is not legally sustainable.

With respect to the second ground, the general

proprietary right of the States in respect

of their railways is undoubtedly recognized

and specially protected; but the CONSTITUTION

just as clearly confers upon the Commonwealth

Parliament the express power stated in

pl XXXV, and does not proceed to except

therefrom the States, as it does (subject

to a qualification) in relation to banking

and insurance.

That is reasoning of the same character but not

with quite the same force as that of Mr Justice Higgins

to which I first took Your Honours.

BRENNAN J:  Mr Spigelman, if contrary to your argument

the relevant words are not merely a limitation upon the power granted by paragraph (xiii) but

are an express reservation of power, are there

any cases in which the doctrine of implied reserve

powers receive consideration in which reference

has been made to paragraph (xiii) as a case of

express reserve powers?

MR SPIGELMAN:  I know of none. And whilst the Court has,

on many occasions, considered implied reservations,

I do not know·of a case, other than the ones

that are listed here, where the Court has considered

the effect of an express limitation on other

placita. Obviously, the ones we have identified

here contain as - together with perhaps SCHMIDT's
case which I have referred to in the context

of the acquisition power, if that is analogous,

I think, having swapped last night and this morning

C lTl 3/1 /ND	19
Bourke(2)

our written submissions with all of my learned friends,

I think we have referred the Court in our joint researches to all the occasions on which the matter has been considered.

Your Honours, we outline there in

paragraph 6 of the various State Acts as they

existed in 1900. Could I add one to paragraph (v)

with respect to Western Australia. Western

Australia also had an AGRICULTURAL BANK ACT

1894 which, like the Posts and Savings Banks,

was not incorporated in any way, so undec ,(v)

should be added a reference AGRICULTURAL BANK

ACT 1894, not incorporated. And we hand to

Your Honours ten copies of all of those Acts.

Basically, it turns out in 1900 it was two

all. There were two States with incorporated

State banks, Victoria and South Australia; there

were two States which had State banks which were
not incorporated, that was New South Wales and

Western Australia; and Queensland did not, at that time, have a State bank but when it emerged

in 1901 - or the beginnings of it emerged in

1901 - it emerged in an incorporated form.

We~have nothing to say about that. We have

referred Your Honours to the sections and handed

up the legislation. Our second point, and the

alternative way we put our case, is that if there

is a restriction then it requires something along

the lines of - it requires a limitation. And

it is not any:Act with respect to corporations

which is inconsistent with the purpose of the

exclusion of State banks from the banking power.

Nor is it any Act with respect to bills of exchange,. bankruptcy,. insolvency and the other plac i ta

to which we have referred.

(Continued on page 21)

C1Tl3/2/ND	20
Bourke(2)

MR SPIGELMAN (continuing): It may be that one would here

invoke something analogous to - not precisely
but analogous to the jurisprudence of this Court
with respect to the structure of federalism, namely,

the line of authority in MELBOURNE CORPORATION and

QUEENSLAND ELECTRICITY COMMISSION. I am not

suggesting that it is precisely the sam~ thing

but if it be an exclusion of the character

Your Honour Justice Brennan referred ta, it is

something very close to the preservation of the

federal system or the assumption of a continued -

I am sorry, that is far too general - the

continued existence of the States and that

doctrine which was applied in the two cases I

have refer~ed to. It is analogous to that; I

am not saying it is the same point but

Your Honours would find that a source of

analogy for identifying the nature of the

exclusion expressly identified in placitum

(xiii) and (xiv) and one would want to find

something like legislation aimed at State banks

or something which was inconsistent with their

separate existence as, of course, was the case

in the BANK NATIONALIZATION case. Now, the

TRADE PRACTICES ACT is nothing like that.

Could I give Your Honours an analogy if

we are wrong with respect to the corporations'

power by referring Your Honours to the posts

and telegraphs' power. The posts and telegraphs'

power is today probably the key to controlling

banks. A bank could not exist without

electronic communications. If the Commonwealth

wished to in some manner control State banks

today, it could do so totally and completely

by exercising its control over electronic

communications. A bank could not compete today

without access to electronic funds transfers

and other forms of electronic communications

and services.	Are we to say that the posts
and telegraphs' power bears the same kind of

restriction as it is now said is to be found

in the corporations' power because if the

question is one of practice or, as a matter
of practice, the Commonwealth could render the

exclusion inoperative under the corporations'

power; well, today as a matter of practice,

it could do so under the posts and telegraphs'

power too.

McHUGH. J:	What about billsof exchange?	You say bills
of - - -

MR SPIGELMAN: Well, it could. It is not the only form

of banking but obviously it is a very important

component of the business of banking but, clearly,

C1T4/l/SH	21	6/3/90
Bourke(2)

it is an area that the Commonwealth control

would have and has had and does have every day,

an effect on the operations of State banks and

insurance companies throughout the country.

McHUGH J:	What worries me is that in an ordinary statut~ when you find a power which is hedged ir with
limitations or restrictions, it is a rule of
construction that you cannot then have recourse
to a more general power wh{ch would evade
restrictions or limitations. There are a
but if you confined banking activites to number of cases in this Court to that effect of these other powers.

MR SPIGELMAN: There are two answers to that. First, the

CONSTITUTION is not an ordinary statute and,

secondly, it is our second point about identifying

something which would make the exclusion inoperative

or devoid of any effect. The second way we

put our case is really enough for the disposition
of these proceedings because, on no view, could

the provisions of the TRADE PRACTICES ACT here

which, basically, impose a standard of conduct

on all corporations in the country, be seen

as depriving the exception in the banking power

oc, the insurance power of effect.

(Continued on page 23)

ClT14/2/SH	22	6/3/90
Bourke(2)

MR SPIGELMAN (continuing): Unlike the BANK

NATIONALIZATION case where one could characterize

the relevant legislation in that manner and it is

sufficient for the disposition of this case to

decide on our second view and that would be wholly

consistent with the line of authority to which

Your Honour has referred.

McHUGH J: But if you are right then today Sl(xiii) generally

has got little scope, has it?· The Commonwealth

can regulate banking under Sl(xx).

MR SPIGELMAN:  We would think that is probably the practical

implication and if the Commonwealth were, for

example, to enter into an international treaty

over banking as may very well be an appropriate

matter for international regulation, then for

prudential requirements that would affect the

State banks too. One of the documents that my

learned friend, the Solicitor-General for South

Australia, will be handing U? is a little bit of
history on the crash of 1~93 in Australia and saying

that is part of the background against which these

provisions were identified.• Well, the trigger of the

crash of 1893 was the failure of the Barings Bank

in London and it highlights the fact that, particularly

in banking more so that perhaps any other area of

commercial activity, the international connections

are crucial. Is there to be an exception in the

external affairs power with respect to State banking?

We would submit not.

DEANE J: Your submissions do not seem to address a possible

middle ground if your first submission be rejected

and that is that the exception in subsection (xiii)

is not to be read as an exception from the

Commonwealth law-making power, but is to be read

as an exception from the power of the Commonwealth

to make laws with respect to banking. In other

words ti.tie Com:;:nnwealb.11, on that approach, could not

a law with respect to banking, deal with internal	in a law which is properly to be characterized as
State banking?

MR SPIGELMAN:  We have no difficulty with that submission so

long as - - -

DEANE J:  It does not seem to be raised. I was just wondering if it does Play any part in your submission?

MR SPIGELMAN:  It may have been because it was assumed,

in this sense: if a law could only be characterized as

with respect to banking and not characterized as with

respect to corporations or some other matter, if it

could only properly be characterize:ias with respect

to banking then, clearly, the exception would apply.

ClTlS/1/JL	23
Bourke(2)

DEANE J: Well, that was not the implication I mean the

implication what I asked you was that perhaps

the TRADE PRACTICES law were it not for one
of the subsections or one of the definitions

in section 4(1) could not be characterized as

a law with respect to banking even though it

would affect the operations of banks.

MR SPIGELMAN:  Well we would so submit and we would have no

doubt that a law which - may we say that with

respect to that extension of the definition of

"financial corporation" in section 4(1), that

really is just part of the legislative scheme to

draw the net as wide as it can be and we do not

need to go, we submit, beyond the first leg of

that definition, namely, "financial corporation"

means financial corporation within placitum (xx)

and then goes on to refer to the business of

banking. We say for relevant ?Ur?oses one does

not rr,et beyond the. first leg.

But if Your Honour pleases, we are content to

adopt that as a - - -

DEANE J: Well, I was just asking a question,I was not putting

any view.

MR SPIGELMAN:  We adopt · that as a submission in the

sense that it was assumed that if a law could be characterize as a law with respect to banking and

only so characterized, then clearly the exception

would apply.

(Continued on page 25)

ClTlS/2/JL	24
Bourke(2)

MR SPIGELMAN (continuing): The third way we put our case

is the question of crossing the border, and what

is the meaning of the phrase "extending beyond

the limits of any one State".

BRENNAN J:	Where, in paragraph (xiii) or in the statute?
MR SPIGELMAN:	In paragraph (xiii), and reflected 'i.:i the

statute, because the statute purports to have the

same restriction and uses the same words.

BRENNAN J: Well, that may be another question.

MR SPIGELMAN: If Your Honour pleases. At this stage -

the question of the statute really only rises

on a notice of contention. At this stage we are

directing our submissions to the placitum (xiii).

Below two facts were agrees: one that the State Bank engages in interstate transactions of an unspecified

character, and secondly, that it has a branch, in

the sense that one understands that, in the

Australian Capital Territory. We say that it is

sufficient for that purpose - for the purposes of

placitum (xiii), that the State Bank crosses the border, in an other than trivial sense, and that

once it does so, the whole of its activities are

within the Connnonwealth power, not simply those

part of the activities which constitute the

interstate element.

The CONSTITUTION has a number 6f' formulae

for identifying interstate matters. In 51(i)

it is referred to as "interstate trade or connnerce".

In section 92 the formula is once again"interstate trade connnerce or intercourse~'. In three placita these words appear, "extending beyond the limits of

any one State",banking, insurance and the

arbitration power.	They were in fact adopted by
reference to each other.	We have taken, Your Honours,

copies of the convention debate, however, our

copying is not quite as elegant as that of my friend's

and I understand they will be handing up paginated

and indexed extracts, so rather than burden the

Court with multiple copies of the same documents

I will not hand those up now.

I just refer, at page 782, the Adelaide Convention Debates, that Mr Higgins, as soon as the

relevant formula had been adopted by, with respect,

the insurance placitum, innnediately moved for the

adoption of the same formula in the arbitration

power. That was not adopted on that occasion. It

was eventually adopted at the Melbourne convention.

The authorities against us in this respect are

set out and fully quoted by the trial judge at

pages 38 to 45 of these reasons.	We think he has got
all the relevant quotations there, and the	reference

ClT16/l/FK	25
Bourke(2)

is there and if we are wrong about that, our

learned friends would add to them.

The basic argument to this is that banking

is just like an interstate dispute. . It is

impossible to disentangle the interstate component,

that is to say, in an interstate dispute it ha~ never

been suggested that extending beyond th~ limits of

a State means that the Connnonwealth only attaches to

that bit over the border.

McHUGH J: Butfris not a true analog~ is it? If you have

got - you may have a purely intrastate dispute

which is a consequence of an interstate dispute, but

the cases hold,do they not, that that is not within

Sl(xxxv). It is one thing to say, you have got to

control the intrastate disputeswhich extend, but it

is a different thing altogether with banking, is it

not? Banking transactions, consensual transactions

between customer and banker simply because one

transaction extends across the border does not

mean that you have got to regulate every

intrastate transaction, with banker and customer.

(Continued on page 27)

ClT16/2/FK	26
Bourke(2)

MR SPIGELMAN:  We say that the flow of money is so

interconnected that one would not be able to

draw the line with precision. Take this case:

what if one of our companies had been incorporated

outside of New South Wales, one of the companies

in the group, in the ACT, for stamp duties reasons
years ago, or whatever? What if one Of the properties given as security had been outside

New South Wales? None of them were. Is that enough? What if one of the guarantors - :there were presumably guarantors - had interstate

interests; lived interstate or had interstate

assets? Is that enough to in some way give one

the interstate element?

We say once one gets into these sorts of

activities is very hard to draw the line. It

is not quite the same as interstate disputes,
we accept that, but the same kind of reasoning

would apply and in that regard crossing the borden~

is such as to invoke the whole of the Commonwealth

power.

There is no reason why that should not be

the case. There is a power with respect to banking
because it is desirable for whatever reasons

to have national regulation of that activity.

There is an exception in respect to State banking.

One cannot say that it is based on economic

significance because obviously whatever goes

on within the State of New South Wales or Victoria

is such as to be capable of having national

significance in its own right. ·

It is very difficult to know why the line

was drawn but what we do say is that so long

as States kept wholly to themselves and within

their o~n borders then it was thought appropriate

for that to be excluded from Commonwealth power

which would be affecting all of their competitors.

But once they chose - and it is their choice -

to cross the border, there is no logical reason

for stopping it and saying, "It is only the
interstate element that should be the subject
of Commonwealth control.", because obviously

the intrastate elements of all their competitors'

activities are already the subject of Commonwealth

control.

DEANE J:	Mr Spigelman, is there anything in the cases about
why State banks are not excluded from the legislative
power with respect to the incorporation of banks?
MR SPIGELMAN:	No, I know of nothing other than the history

of the particular placitum - what became

placitum (xiii) had incorporation of banks in

its original format which read "banking,

incorporation of banks and note issue" or issue

C 1 T 17 /1 /ND 27

Bourke(2)

of money. And the exception to State banks was

inserted in the middle of that. Now, that will

be a guide to the construction, namely it would

be odd, to say the least, if the power which

excluded State banking in its first leg permitted
the Commonwealth in some way to say something.
about the incorporation of State banks.in the

second but it is by no means impossible but

it would be odd.

But the legislative history is that there

was already those series of words and whilst

there is a semi-colon in the middle now there

was not once. The exception of State banking
was inserted in the middle of a placitum that

already read "banking, incorporation of banks".

McHUGH J:  My recollection was that the words "incorporation

of banks" was put in	because of the problem that had
arisen in the United	States as to whether there
was a question as to	whether or not
banking would cover	an incorporation of banks.

MR SPIGELMAN:  I will stand corrected. My understanding

of banks and the issue of paper money 9 is the	was that that formula, "banking, incorporation
formula in the British North America Act and
was adopted from that in 1891 and I think my
learned friend, the Solicitor-General for New
South Wales, in his material handup has traced
this in more detail. But as I recall, the origins
of that section were that all those words
I consider them now separated by a semi-colon
which would lead one to pause but that originally -
all the references to State banking were inserted in the middle of something that already read "banking, incorporation of banks and the issue of paper
money". And that will be a guide to its
constructions in terms of that particular history.
I do not think there was any suggestion that in its original form it was meant to be changed in some way
by the inclusion of the exception of the State Bank. (Continued on page 29)

C1Tl7/2/ND	28
Bourke(2)

BRENNAN J: Mr Spigelman, to take your construction though

about the "beyond the limits of the State concerned",

it would mean, for example, would it not, that

a Commonwealth law which dealt with statutory

reserve deposits would apply so soon as they

lent across the border to a small farmer.

MR SPIGELMAN:	Yes.
BRENNAN J:	But not until that time.
MR SPIGELMAN:	There may·be a de minimis matter in all of this

but yes, the answer to your question is subject to that,

yes~and so they should or so the Commonwealth

Parliament could decide becaJse they are as

subject to the need for prudential requirements

as anybody else, as the depositors in the 9overnment

Savings Bank of New South Wales in the late

twenties and early thirties found to their cost.

BRENNAN J:  But is that not very much at the heart of

State banking?

MR SPIGELMAN: It was in those days, yes, and the question -

there is no doubt that it is a dramatic consequence,

if one might say, from a small incursion. In this

case, although there is a reference in the agreed
facts to other banking transactions and, obviously,

there would be; the cheque clearing system is, as

one would know, would involve the sending of cheques

all over the country but let us just take the one

branch idea; namely, there is a branch in the

normal sense, with which we are all accustomed,

of the State Bank in Canberra and that is a small

incursion in one sense. It is not a trivial one

but we see nothing intrinsically ridiculous about
saying that the State banks should be subject to
the same kind - and the Government insurance officers
if they deal in interstate - in any manner, should

be subject to the same regulations as all of their

competitors.

BRENNAN J: That is an argument, I suppose, from convenience

but there is nothing really to commend .it as against

an argument which says the activities which are

interstate activites are the subject of regulation.

MR SPIGELMAN:  Iri terms of the text, there is nothing to

commend one point of view or the other unless

one - it is almost a matter of impression and it

is very hard in the context of that character to

''Extending ;1 Your Honours, in accordance with recent	say, "My.impression is better than your impression".
authority of this Court is, of course, a present
participle and it involves a process that what
is occurring is, we say, that the institution has extended its activities so it is not just the activities pure and simple that constitute the
subject-matter of the extension.

C 1 Tl 8 /1 / SH 29 6/3/90

Bourke(2)

Your Honours, there is not much to .say-about the notice of contention point. We say - - -

DAWSON J:	Mr Spigelman, you have passed now on to point 8.
You may have dealt with point 7 in your outline
but it was almost imperceptible to me.
MR SPIGELMAN:	I did, Your Honour, yes.

DAWSON J: Why is it not right to say - you may agree, you may not -

but, this Act is concerned relevantly anyway with

misleading and deceptive practices and everyone who

is subjected to the law can be subject to that within

the confines of other power and that a bank does not

exist as a person outside the law, whether it is a

State bank or otherwise, the law otherwise validly

made and that it would be subject· to criminal

laws, for instance, laws with respect to

laundering of money or whatever it might be and

misleading deceptive practices are of that sort

and that if the Commonwealth can validly pass

laws otherwise~ then they apply it to the State

banks. They are not laws with respect to banking

activities as such but laws with respects to

undesirable activities, criminal activities, if

you like. Is that what you are saying?

(Continued on page 31)

ClT18/2/SH	30	6/3/90
Bourke(2)
MR SPIGELMAN:	Yes, Your Honour.	We are saying that if there

is a restriction in relevantly the corporation's power

then it is limited in some way to something which

would render the exclusion of State banking inoperative.

DAWSON J:	I understand that.
MR SPIGELMAN:	And the TRADE PRACTICES ACT just does not come

within that concept.

DAWSON J: Not at all with respect to banking at all.

MR SPIGELMAN:	May I simply say that the point is a simple one and the reason Your Honour listed it is because
it really only took one sentence to put.

DAWSON J: It may be a very important one.

MR SPIGELMAN:  We submit it is and we indicated that it was, in

a sense, sufficient for the disposition of these proceedings. One does not need to deal with our first point really if we are right about this one

because the TRADE PRACTICES ACT is of that character.

McHUGH J: But when you drop down from the general to the

particular, your statement of claim shows that it is

very much directed to- banking,. -the representations are

all about your bank, the bank unlike other banks

understands the needs of developers and so on.

These representations are at the heart of banking

transactions I would have thought.

MR SPIGELMAN: There is no doubt that we were there in a

customer-banker relationship. That was the context

in which the allegedly misleading conduct

occurred.

DAWSON J:  But I suppose if you were talking about the building

industry you would similarly so talk about the customs

and practices of the building industry but it would not

be a law with respect to the building industry, would it,

or building activities even?

MR SPIGELMAN: If Your Honours please, we have·--aubmittedit is

not a law subject to that extension that Justice Deane

referred to in a question to me, the extension of the

definition of "financial corporation~' It is not a law

with respect to banking and we do not need to invoke, we submit, that particular part of it, only the part that extends to banking. If we do then it is the

third way we have put our case: namely, what is it

that extends beyond the limits of any one State.

McHUGH J: Yes, but ·on this basis, how is it a law with respect to

financial corporations?

C1T19/l/LW	31	6/3/90
Bourke(2)

MR SPIGELMAN:  Because it imposes in terms - both of 52 and 52A

a referable to conduct by a corporation, which is
defined to include a financial corporation, in

trade or cormnerce. And so it is with respect to the

corm:ercial activities of financial corporations. _

McHUGH J: Or banking activities.

MR SPIGELMAN:  If one could call it- but-banking activities are

financial activities. Financial activities covers

more than banking but it includes banking.

If the Court pleases, the last part of the outline

was really in anticipation of what my friends may say
and I do not propose to add to it at all other than
to say we think it is the same point. If there is a
construction point then by reason of the definitions in the

Act it really raises the identical issues, the three issues, that we have identified with respect to the

CONSTITUTION and there is no separate issue on the

notice of contention.

If the Court pleases, they are our submissions.

MASON CJ: Thank you, Mr Spigelman. The Solicitor for

New South Wales.

MR MASON:  May I hand up an outline of our submissions and some

materials that will be referred to in the course of the

argument.

MASON CJ: Yes?

(Continued on page 33)

C1Tl9/2/LW	32	6/3/90
Bourke(2)

MR MASON:  Your Honours,perhaps I will deal firstly with

51(xx) and its interrelation with 51(xiii). I

will follow the order my friend took. Our written submissions on this point are at paragraph 10, but

if I may develop them in this way. In addition

to the cases cited by my friend there is the reference

in the judgment of Chief Justice Gibbs iu .\CTORS AND

ANNOUNCERS EQUITY ASSOCIATION. I will not read the

passage, but His Honour there cited the earlier
passages as an illustration of the proposition that

in some circumstances the generality of a power

given will be confined by an exclusion to be found in

an earlier power. Can I just say two things about

BANK OF NEW SOUTH WALES V THE COMMONWEALTH. The

statements by the Chief Justice Latham, Justices

Rich and Williams and Justice Starke, were very much

part of the ratio of their decision. They were not,
in any,sense, obiter, and if I may just take the

Court very briefly to 76 CLR to flag the portions in the argument where the point was raised. Firstly at

page 7 in the opening of the argument by Mr Barwick,

the statement was made that the BANKING ACT:

falls under no head of legislative power. It is

not a law on the subject of banking within s. 51 (xiii) of the CONSTITUTION. It is not within s. 51 (xx.)

At page 14 at the bottom, still in Mr Barwick's

argument:

In s.51(xiii.) the word is "banking," not

"banks," the operation or function, not the

person or body carrying it on. Separate words

are used to authorize the giving of corporate

existence to a bank. State banking can only

extend beyond the limits of the State

concerned by transactions.

In the argument by the Attorney-General,

Mr Evatt, at page 49, about half-way down the page,

he argued that:	The BANKING ACT 1947 is within the Commonwealth
legislative power with respect to banking
under s. 51 (xiii.) of the CONSTITUTION to
financial corporations under s.51(xx.), and
to the acquisition of property under s.5l(xxxi.).

He developed that argument with respect to 51(xx) at

page 61, about the middle of the page, after referring

to a number of provisions., he argued that:

Tliese"~provisions are all good under s. 51 (xiv.),

and some under s. 51 (xx~) ; Se·ct: on 46 of the

BANKING ACT 1947 not only relates to the business

CIT2/l/CM	33	6/3/90
Bourke(2)

of banking, and so falls within s.Sl(xiii.),
but also deals with the banks as corporations,

foreign or financial, and undertakes to

provide for the termination of their right

to conduct their businesses and for their

continuance in the meantime. It may be that

a State bank that is incorporated under the

law of the State is excluded front the

operation of s.Sl(xx.) by implic~tion from
the express exclusion of State banking in

the case of s.Sl(xiii.). It would be because

s.Sl(xiii.) tells you that, so long as the

State as a banker does not go beyond the

State boundaries, the Conrrnonwealth may not

legislate for it as a banker.

And in the reply of Mr Hudson at page 103, near

the top, he said that:

A comparison of s.Sl(xxxv.) with s.Sl(xx.) leads to the conclusion that the Parliament could not make a law dealing with the industrial disputes

(intra-State) or industrial relations of

foreign and financial or trading corporations.

If, as is contended for the Conrrnonwealth,

5.Sl(xx.) authorizes laws dealing with the

external relations of foreign or trading or

financial corporations, then it might be said

that the Parliament could control all State

banking done through a corporation. But

s.5l(xiii.) shows that this could not be so,

and that and other paragraphs indicate that

s.5l(xx.) cannot extend to the control by

way of regulation and prohibition of the

transactions of trade of corporations.

(Continued on page 35)

CIT20/2/CM

Bourke(2) 34 6/3/90

MR MASON (continuing): Just to complete the exercise, at

page 103 - I am sorry page 151 - in the judgment

of the Chief Justice, near the top of the page,

when he is summarizing the arguments he states that:

It is contended for the plaintiffs that the

fact that the legislation applies 'Lo banks

does not make it legislation with respect to

"Banking" and that it is not a law on

that subject; that s.5l(xx.) does not apply

to banking corporations, and that it does not

authorize in the case of any corporation the

making of laws prohibiting -

that is another point. Your Honours, in response to

the suggestion that the remarks of Chief Justice Latham

were tainted by an espousal of the "pith and substance"
doctrine, we would submit that a reading of page 185
shows that His Honour was not supporting the concept of
"pith and substance" as a - at the middle of page 185 -

was not supporting "pith and substance" as a doctrine

of interpretation; he stated there that the phrase

did not:

solve any difficulties. It lends itself to

emphatic asseveration, but it provides but

little illumination.

And on page 186, in a passage that has frequently been cited in later cases he expressed the view that

it is the words:

A power to make laws with respect to a subject -

that were as wide a legislative power as can be created.

So, Your Honour, my learned friend has to face,

in our submission, the strong and unbroken line of

precedent which says that at least so far as concerns

the interrelationship of (xx) and (xiii) - (xx) is

to be seen as not extending to incorporated State banks.

Your Honours, as we will seek to demonstrate when I take you to the convention material, but. as is also

apparent in my submission from just the terms of 5l(xiii),

the purpose of excluding State banking was to carve out

a no go area for the Connnonwealth, that this is explicable

by the wording of 5l(xiii) and all the more so by the

proviso that was added on the end of it whereby there

was a proviso to that exclusionary area of preclusion.

Now, if one can derive from 5l(xiii), supported if need

by by the debates because they clearly do, an intention

in the CONSTITUTION to say this is an area of exclusive

State legislative power, then the doctrines flowing from

Justice Higgins' statement that this is a CONSTITUTION

ClT21/l/JL	35	6/3/90
Bourke(2)

that we have to construe can be prayed in aid

by the States. Usually they are invoked in order

to support an expansive generic interpretation of

power favouring a development, but equally they
should favour, in our submission, the Court being

not prepared to countenance a circumvention hy

some sort of fine textural game of what is a clear

indication of an allocation of power arid. an

allocation of absence of power to be found.

(Continued on page 37)

ClT21/2/JL	36	6/3/90
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MR MASON (continuing):  We would say that if one reads in

5l(xiii) the exclusion of State banking as intended
to create such· a preclusion of Commonwealth power,

then it is appropriate to apply the doctrines

recently stated by this Court with respect to

section 90 and 92, that it is the practical and

substantive effect of a law that has to stand against

that constitutional implication of lack~~f power,

and the practical and substantive effect of the
doctrine which my learned friend invites the Court

to adopt with respect to placitum (xx) is to put

at nought this constitutional balance that was

struck and clearly highlighted in placitum (xiii).

Your Honours, we would submit that this conclusion

may also be supported on textual grounds, and, if I

may endeavour to suggest three alternative textual

coursestowards the same conclusion. The first is

rhat what is being said when one reads 5l(xiii) and

(xx) next to each other is that it is being said

against a background where everybody knew that

unless that was a special dictionary about it, a

bank, if incorporated, would be a financial corporation.

That was just so obvious that it went without

saying. As the materials that my learned friend

has put before the Court show, at least some State

banks were incorporated as at 1900.

So, it was as plain as a pikestaff that an

incorporated State bank would be a trading corporation,

if one just had placitum (xx) and nothing else, and
therefore one can, all the more confidently, draw

a negative implication with respect to State banks

even though they be incorporated. Now, if one

approaches the matter that way, one has a special

rule as to the interrelation of (xiii) and (xx), and
you do not need to be concerned about the other

arguments my learned friend put ,"Well, what about the

BILLS OF EXCHANGE ACt, and what about other uses of

general Commonwealth power?", and it would appear, in

our submission, that that is the way the Court has

approached the matter in its discussion of the

interrelation of these two powers. In particula~ in

Chief Justice Latham's statement in BANK OF NEW SOUTH

WALES, 76 CLR at 184_.	His Honour there referred to
the fact that:

A State bank would almost certainly be a

corporation, and, if so, it would be a

financial corporation.

And then proceeded to move from there to the principle that 5l(xx) is to be read down.

ClT22/l/FK	37	MASON,	6/3/90
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A second textual approach to the same

result, at least with respect to Sl(xx) may be

found in the principle stated by Chief Justice Dixon
in SCHMIDT's case - ATTORNEY-GENERAL V SCHMIDT,

(1961) 105 CLR 361, at 371 and 372. His Honour,

six lines up from the bottom of the page saidr

It is hardly necessary to say that when

you have, as you do in par. (xxxi), an express power, subject to a safeguard,

restriction or qualification, to legislation

on a particular subject or to a particular

effect, it is in accordance with the soundest

principles of interpretation to treat that

as inconsistent with any construction of
other powers conferred in the context which

would mean that they included the same

subject or produced the same effect and
so authorized the same kind of legislation but

without the safeguard, restriction or

qualification. But two observations must

be made. First, it is necessary to take care

against an application of this doctrine to the

various powers contained in s.51 in a too

sweeping and undiscriminating way. For it

cannot have much to do with some of the

subject matters of power upon the very

terms in which they are conferred.

And then he went on to make a special observation

about Sl(xxxi).

Your Honours, another example - - -

(Continued on page 39)

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BRENNAN J:  Is not that nexus in

itself perhaps of critical importance here? 'the

principle does not apply except with .

respect to the ground actually covered by

paragraph (xxxi)." In other words, applying

that to the present case, if the principle does

not apply except with respect to a law which

is characterized as a law with respect co

banking ..

MR MASON:	Your Honour, that in itself raises an issue as
to whether one applies the rule of characterization
that is now acceptable; that it is a law with
respect to banking if it regulates - I am paraphrasing
it badly but if it in fact touches and regulates banking, even though it may not be in terms expressly addressed to banking, that - - -
BRENNAN J:	But putting it another way, is the TRADE PRACTICES

ACT a law with respect to banking?· Co~ld it be supported as such?

MR MASON:	I am sure if the - let us assume there was no 51 -
if there was no problem about State banking, the

Commonwealth, I am sure, would correctly seek to

justify it as a law with respect to banking in

its application to banks and the definition clause

does, of course, expressly seek to reach out and
touch banks by the extended definition of "financial
corporation" in section 4. "Corporation" is defined to

include a trading corporation or a financial

corporation and "financial corporation" is then

given the extended definition as mean~ng:

A financial corporation within the meaning

of paragraph 51 (xx) ... .. and includes a

body corporate that carries on as its sole

or principal business.

DAWSON J: That is putting the definition on one side so you

get to the substance of what was put to you.

MR.'MASON:	Yes.
DAWSON J:	I mean, banks cannot commit theft, for instance,
but you would not say that a law with respect to theft was a law with respect to banking merely because it covered banks.
MR MASON:	No, Your Honour.

DAWSON J: Well, this is a law with respect to misleading

and deceptive practices covering everyone.

MR MASON: Well, of course, in STRICKLAND's case it was seen

as being a law with respect to corporations because

the particular peg that was - - -

C1T23/l/SH	39	6/4/90
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DAWSON J: When I say "covering,.everyone", that is probably

inaccurate; covering those people whom the

Commonwealth can cover.

MR MASON:	Yes, but there the Court derived its view, as I read the case, from the fact that corporations
were used as the focus for the law-makipg power
in sect ion 52 for exampL~. · Now, where 'corpor:a t ion" is given an express extended definition to include "a bank", then why could it not be seen as a law
with respect to banking, at least in that connection.

DAWSON J: Well, you have the difficulty that a corporation's

power is a power with respect to persons but you

do not have that difficulty with: the banking power.

That is a power with respect to activities.

MR MASON:	Yes.
DAWSON J:	And it is a question whether this is law with
respect to those activities or a law of more
general application so that you cannot say it is
with respect to those activities, notwithstanding that they may be caught up in it.

(Continued on page 41)

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MR MASON:	I accept that, Your Honour.	Your Honours,

placitum (x) has been regarded by authors as
being in the same category as placitum (xiii)

with respect to its implied negative implication

and if I could just give Your Honours the

reference to the discussion in Zines, Second ·

Edition, pages 20 to 23, where the leatned author

there draws a distinction between three different

categories of situation. He says, at page 20:

The argument that a head of power should

be given a restricted meaning because of

the existence of another power has, however,

arisen in the following circumstances:

(a) where otherwise another power would

be otiose -

and he says, "Well, in that connection, that

argument has not been acceptable since ENGINEERS

as a means of reading down a power"-

(b) where a power contains a particular

addition to a broadly described subject matter and that addition is absent from

another power -

that includes the problem about the incorporation

of banks in Sl(xiii) and what one infers from

that, and -

(c) where in the description of a power

there is an express exception or restriction

and another power would, on an ordinary

construction, enable the Commonwealth to
legislate in the excepted area or to avoid

the restriction.

And the three examples he gives there are the

ones we are concerned with here, Sl(xx) and Sl(xxxi).

Your Honour Justice Deane asked a question question of power to incorporate. There is a

about whether anything had been said about the

statement by Justice Dixon in MELBOURNE CORPORATION,

74 CLR, at 78 where His Honour is speaking about

incorporation of banks and Sl(xxxi) and says,

at the top of the page:

The power should be given an ample meaning and a wide operation and the exception

in favour of State banking should, in my

opinion, be understood as referring to the

operations of a banker conducted by or on

behalf of a State and not to the State as

the customer of a bank.

C 1T24/1 /ND	41	6/3/90
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The purpose of the exception was, I

have no doubt, to ensure that State banks

should not be affected by any law which

the Parliament of the Commonwealth might

make about banking and that the exclusive

power to regulate them should remain with
the States.

The form of par (xiii) presents a curious point in its express mention of the incorporation

of banks as an extension of or addition
to the subject of banking and in its failure
to attach the exception of State banking
to the extension or addition. But, whatever

its significance or effect, it is not a

point that touches the question before us.

DEANE J: It is strange though in that you expect the very

first thing that would be caught within the exception

would be incorporation.

MR MASON:  That would be caught within the exception in

Sl(xiii)?

DEANE J:	You would expect the State banks to be excepted from the - at least the power with respect to
incorporation more than anything else, you would
have though~ but as a matter of language you simply cannot construe subsection (xiii) that
way, whether you have to distort the language.

(Continued on page 43)

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MR MASON:  Except that when the concept of State banking has

been discussed part of the idea of State banking

is a bank that has been created by the authority of

a State, so to that extent one would never contemplate

that there would be any question of Commonwealth

incorporation of such banks.

DEANE J:	I do not want to take time but the structure of the section is that "banking' does not include "incorporation"
which means, as a matter of language, State banks
are not exempt or excepted from the legislative powers
in respect to incorporation. As I say, I just thought
that common sense might require you to do something
about it. The language is very difficult.
MR MASON:	I am reminded that the exclusion of State banking

'

developed in the convention debates, first in the context of the insurance power and the details

were worked out there. They then said, "Well, let

us apply that to banking", and then they tacked

on the incorporation provision in the banking area.

Your Honours, in view of the unbroken stream

of precedent as to what was not encompassed by

financial corporations within the meaning of Sl(xx)

and the conclusion from the cases that Sl(xiii)

carved out from Sl(xx), and from its area of operation,

incorporated State banks. I put the constructional

argument that when one looks at the definition in the	TRADE PRACTICES ACT where 1financial corporation"is
defined to mean a financial corporation within the
meaning of Sl(xx), that that could not have been
intended as a matter of interpretation to pick up
an incorporated State bank and that the words
"within the meaning of Sl(xx)" carried with it into
the construction of the TRADE PRACTICES ACT
the fact that the power under Sl(xx) did not or was certainly held by the Court as not going to State
banks.
on a couple of occasions recently warned about the

Your Honours, this Court has from my researches

dangers of inferring a parliamentary endorsement of

a judicial construction: FLAHERTY V GIRGIS, [986-87)

162 CLR 574, at page 594, and SOLA OPTICAL

AUSTRALIA PTY LTD V MILLS, 62 ALJR 3, at page 6.

But I would seek to distinguish the discussion there by saying that here the stream of authority went to the question of lack of constitutional power and

that it is all the more conceivable that even in an

Act such as the TRADE PRACTICES ACT where there is

evidence of the Commonwealth reaching as far as it

can go there was an acknowledgement of the limits

that had been established by earlier precedent in

this Court.

ClT25/1/LW	43/ 44	6/3/90
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i:1R. MASON (continuing):  Now if that is correct, one is

necessarily driven then to the second and extended

definition of "financial corporation" which presents

the other points to which I will now turn.

Your Honours, the broad submission we make is

as stated in paragraph 3, that merely to o;'en a bnmch

in a Territory or in Queensland, as is-the case

with the State Bank of New South Walea, does not

bring the whole of the Bank's activities within the

ambit of Cormnonwealth legislative power. In the

course of his argument in the STATE BANKING case,

Mr Kitto made a statement as to the purpose of the

final proviso in Sl(xiii) which we would adopt.

It is at 76 CLR 37, where he said that:

State banking extending beyond the State

concerned was placed under Federal authority

so that the Cormnonwealth Parliament could see

that the State into which it extended did

not hamper or obstruct it or even suppress it.

The convention material supports this as being the

purpose of the ultimate proviso in Sl(xiii).

Perhaps if I could take Your Honours then to the

materials which we have endeavoured to surmnarize

in the bundle I have handed up. So that the Court

can perhaps flag the points c&n I take you to page 5

where we have the proposal, it is on the second

column of 684; that a:

Sub-clause 13. Banking, the incorporation of

Banks, and the issue of paper money -

should be inserted.	Now that proposal provoked a
question by Colonel Smith,	the answer is quite

interesting, Sir Samual Griffith saying.that there

was absolutely no question of the Commonwealth

having power to establish a bank. Sir John Bray

then said:

I should also like to know whether the

sub-clause would include savings banks? Is
it intended to interfere with the establishment
of savings banks in the different colonies?
If not, we ought to insert the words "other
.than incorporated savings banks." I do not
think i.t is necessary for the federal government

to interfere with them. They are managed

in almost all the colonies at the present time

in a different way.

The federal government is to take over post

offices!

exclaimed Mr Donaldson.

CIT26/l/CM	45	6/3/90
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But there are savings banks other than those

in connection with the post-offices, and I

think it would be better to exclude them from

the operation of the clause.

Sir Samual Griffith: Of course there arP. two

kinds of savings banks in Austra\ia. There

are what may be called private savings banks,

that is to say, savings banks ~nder the

management of directors, and there are also

the post-office savings banks. They would

be taken over, I presume, with posts and

telegraphs.

Mr Deakin: No; money orders would, but not

the post-office savings banks!

Sir Samual Griffith: Yes, the hon.member is

right. Those banks belong to the treasury in each

state.

Now that really showed, as it were, the problem which

had been overlooked in the original drafting surfaced,

but at this stage nothing was done about it. The

next page, page 6, shows the draft of the CGNSTITUTION

as it emerged in 1891 and it is paragraphXJ.V that is

the relevant one. There is, at that stage, no

provision with respect to insurance.

(Continued on page 47)

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MR MASON (continuing): Then one goes to 1897, page 8 of

the materials, and the proposal in the page 778,
right-hand column, about point 3, is to insert

the 1891 provision:

Banking, the incorporation of banks,

and the issue of paper money.

And that was agreed to without any relevant debate.

Then, at the top of the next colunm, a placitum in

relation to:

Insurance, including State insurance
extending beyond the limits of the

State concerned.

Mr O'Connor was proposing this on behalf of the

Constitutional Committee, which comprised 20 of

the members of the entire convention, according to

La Nauze's "Making of the Australian Constitution"

page 341.	Mr O'Connor explains it half-way down
the page:

This is a new subsection. It proposes

to include insurance, and I think it is

a very desirable inclusion ..... However,

it involves a principle. The part the

hon. member referred to is for this purpose: undertake State insurance, as was done

in New Zealand, and it was held that State

Insurance should not come under the

general laws. From that view I entirely

dissent; but this clause was drawn in

accordance with the views of the

Constitutional Committee. The hon. member

will see, therefore, that the words "State

insurance" simply indicate that whereas a State

within its own boundaries should have control
of all its insurance business, and the

regulation of its insurance under any State system,

so far as it deals with the people within its

own boundaries, any part of its system that

proposes to deal with people beyond its boundaries
should come under the general laws.

And, by "general laws" he is obviously referring to the Commonwealth power, so that is clearly his

focus. At the bottom of the next column, Mr Symon:

If South Australia chooses to establish

a system of State insurance, I do not see

why she should not within her own limits.

It affects her own subjects only, and we

should diminish the rights of self-government

ClT27/l/FK	47	6/3/90
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if we decided otherwise; but if South

Australia opens agencies in Victoria, then

the federal law should be able to say,

"If South Australia chooses to enter into

connnercial rivalry with those companies

outside her own territory, she should be
subject to the conditions imposed i~
other countries." I think that is the
extent to which this provision was

intended to go.

MR. O'CONNOR: Hear, hear.

MR SYMON: It seems to me that these words:

Including State insurance extending beyond

the limits of the State concerned

ought to be, in the sense in which they

were inserted -

MR HIGGINS: Struck out.

MR SYMON: No; retained. But I doubt with

Mr Higgins whether they exactly and clearly

give effect to that sense.	I suggest some
verbal modification.

And then there was a proposal about that. Then, the next two pages involve some debate and some change

of stance by Mr Higgins as to what he had in mind by the

exception, but ultimately, 781, the right-hand

column, point 7, he states his final position:

I think my friend is under a

misapprehension as to this. I am limiting

insurance matters for the Federal Parliament

to have control over. I propose to exclude

certain matters from federal control. The

expression then will be to the effect that the

Federal Parliament is to have power to make

laws for insurance, but it is not to have
power to make laws as to insurance effected within

the limits of a colony by that colony.

(Continued on page 49)·

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MR MASON (continuing): And then at the top of the next page,

the formal amendment was agreed to · as stated

there. Perhaps while we have that page it is
interesting to note that Mr Higgins then went on

to propose the industrial disputes power and it is of some relevance, we would submit, that the words at that stage were'extending beyond thJ limits of

any one State". It did not have the idea of the

State concerned, which is now part of Sl(xiii).

DEANE J: The main impression you get is that they did not

know what they were talking about.

MR MASON: In this or in - - - ?

DEANE J:	In this.·~~ sort of goes here and there and - - -
MR MASON:	Well, it was round and about but the intention is
plain,in my submission,that they had in mind that
the States who would establish the insurance would
regulate them because, obviously, primarily they would be the concerns of the residents of the State
concerned. But if the State insurance competed
interstate well then ilt would fall under FederaL
power. Why? The answer, in our submission is: So
as to enable the Federal Parliament to stop the other 8_,,tate blocking the extension into its territory.
Your Honours, just a slight point: at the very top of page 782 the transcript of. the convention debate
records the amendment being proposed in one particular
way.  If one goes to page 14 which are the minutes
of the proceedings of the convention, the motion for
amendment by Mr Higgins is recorded in a different way.
Now, the minutes,in my submission,are clearly wrong
but one, nevertheless, has to do one's best to reconcile the two because the question as recorded in the minutes
is:
That the words proposed to be left out clause, the minutes say "put and nega tiv,ed " stand part of the -
which is nonsensical, at least to me. Page 16, we
get to the September 1897 debates and 1074, the left-
hand column, about point 7, subclause 15 is proposed,
it is still the original form of the banking proposal.
It is recorded that:

Amendment suggested by the Legislative

Assembly of New South Wales, and the

Legislative Council of Tasmania:

After "banking" insert "excluding state banking not extending beyond the limits of the state concerned."

ClT28/l/JL	49	6/3/90
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Amendment suggested by the Legislative

Assembly of Victoria, and the Legislative

Council of South Australia:

After "banking" insert "excluding state

banks."

Mr Carruthers, the next column said:

I trust the Committee will agree to the amendment

suggested by four parliaments of five of the

colonies. If Hon. members will look at sub-clause

16 with regard to insurance, it will be found

that the draft bill provides for insurance,

excluding state insurance not extending beyond

the limits of the state concerned. So that in the

next sub-clause, the principle which is being

,,	contended for in the proposed amendment is
practically conceded. We know that state banking
is coming into favour in the Australasian colonies.
It is not proposed to interfere with federal
control of state banking when it goes beyond
the limits of the state concerned. It seerns to me to be purely a matter of state concern when the banking is limited to the state.

(Continued on page 51)

ClT28/2/JL	50	6/3/90
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MR MASON (continuing):  I accept that that is a bit

ambiguous on the point with which we are presently
concerned.

The next column, 1075, about point 4,

Mr Walker raises a drafting matter and 1075 , .

about point 7, the question was resolved in the

affirmative and the amendment was agrE:'eJ to. And so the banking and the insurance provisions were

brought into line. At page 18, just as a matter

of completeness, page 1095, one has the motion
of Mr Barton that the drafting committee reconsider
all clauses with a view to making any drafting

changes they wish to make. That was resolved

in the affirmative,	one sees, at the bottom
of 1097, page 19 of my materials.	And on page 21

of my materials, page 1107, about point 6, one

sees the question being resolved in the affirmative.

There is no further discussion in the

Convention Debates and the drafting form in which

it now appears was adopted without any further

discussion, even though that drafting form is

different to the form	which it was last discussed
in	Convention Debates.

DEANE J: But, Mr Solicitor, on this aspect of it, can

you really get anything from this sort of

uninformed discussion. I mean, if you go back

to 1074, there is a sentence there which is
completely contrary to your submission. It would
not seem to have been thought out. That is in
the second column on 1074, about point 8, where

the chairman - - -

MR MASON:	What page is that in my bundle, please?
DEANE J:	Page 16.
MR MASON:	Thank you.
DEANE J: There you have got the chairman putting the very

amendment saying:

In the one case, state banks are excluded simply; in the other -

which is the one we are concerned with -

state banks are excluded when they do not
extend beyond the limits of the states concerned.

I mean, what emerges from this, really, is that by and large the participants in the debate do

not seem to have been very well prepared on the

subject and are all speaking off the tops of

their heads.

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MR MASON:  But, Your Honour, all that the chairman is

drawing attention to are the form of the two sets

of proposals as appears from the bottom of -

DEANE J:  But the way he puts it:

in the other state banks are excluded when

they do not extend -

-

MR MASON:  But that is the form of the proposal put forward

by New South Wales and Tasmania. If one looks

at the subject-matter - - -

DEANE J: Except, is it the form? The form was "including

state banking not extending beyond".	He says
it is:

state banks are excluded when -

the banks -

do not extend -

MR MASON:  I am sorry. You are drawing a distinction between

banking and banks?

DEANE J:	Yes, which is quite adverse to your submission.
MR MASON:	Yes.

DEANE J: What I am really suggesting is that we are not

going to get much help from what people said here.

MR MASON:  The help I seek to derive in sum is that they

were seeking to define the area of federal control

and to define the area of federal preclusion.

The purpose of federal preclusion was because

the primary responsibility would be that of the

States whose insurance and banking corporations

wer;e involved.

(Continued on page 53)

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Bourke(2)

MR MASON (continuing):  The purpose of the ederal grant

of power was limited, in my submission, as appears

from these debates, to enable State anking and

State insurance to go outside the confines of the

State concerned, without being blocked by a

foreign State.

Your Honours, there is nothing in the material fro~ the Ne~ South Wales Parliament,- except a very

A1;:.~su1g exchahg:e.Page23,page 2263, right-hand colunm

about point 8. It certainly shows that the
parliamentarians of New South Wales were about

only giving up as little as they had to. So,

Your Honours,that is the historical material upon

which we seek to rely and appendix B, page 27 of

what I have handed up, show support for the

interpretation which we favour in QYic~ & Garren,

and in Sir Samuel Griffith's notes to the

Queensland Parliament. In paragraph 7 and 8 we

make two submissions as to the language of 5l(xiii).

As Professor Lane puts it at page 142 of his text

"5l(xiii) implies a prohibition about State banking

within the State" and we submit that that implication

flows from two sources and perhaps I will just

be reading paragraphs 7 and 8 as to the two different

bases upon which we put the textual argument but,

as Your Honour Mr Justice Deane has pointed out, it

is of some criticality as to whether the placitum is

"banking" or "banks", but in the end is was "banking"

and one has to torture the words as if they read

"banks" to get the support that my learned friend

seeks to do in his argument.

BRENNAN J: Why do you say that it precludes - carv~ out an

area of preclusion of Commonwealth power	in
paragraph 8?	Why is it not simply a limit on the

grant of power otherwise conferred by that paragraph?

MR MASON:  Had it been - well, I am not sure that there is

a distinction between the two, but -

BRENNAN J: Well,there is in the sense that if it precludes

the exercise of Commonwealth power over that subject-

matter, then Commonwealth powers contained in other

paragraphs are correspondingly limited.

MR MASON:  If the Commonwealth powers in other paragraphs -

at least if they - to the extent they ·related

to banking matters - extended to that which 5l(xiii)

denied there would be direct conflict, I know

this is repeating a submission I have put otherwise, but

what is the purpose of carving out limitation,or

however one describes it from (xiii) ,if it is not

CIT30/l/CM	53	6/3/90
Bourke(2)

to detract from the otherwise generality of a power
to legislate with respect to banking and that is

reinforced; in my submission,by the fact that there is

then a subsequent positive grant in 5l(xiii) which,

whatever its limits, is limited in some respects

so that the Commonwealth is given by (~iii) only

a limited power with respect to State banking.

(Continued on page 55)

CIT30/2/CM	54	6/3/90
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BRENNAN J:  I am not sure that I am following precisely

the argument. It seems to me that there are three

possibilities. One is that the words of exception,

if I can use those in the neutral sense, create

an Alsatia from Cormnonwealth power, wherever that
power might otherwise be derived from, that i~,

so that State banking cannot be touched by any

exercise of Cormnonwealth power. The second is that

it cannot be touched by the exercise-of a Cormnonwealth
legislative power with respect to banking, so that

any law which can be characterized as a law with

respect to banking must be limited so as not to touch

State banking. The third is that it is no more than

a limitation on the power conferred by paragraph (xiii)

so that if other Commonwealth laws touch and acted

under other powers do affect State banking,then it is

nothing to the point.

MR MASON:  Of course, there is a fourth alternative which says

that those words have some peculiar reference to
placitum (xx) and only placitum (xx) alone.

Your Honour, State banking is itself within placitum (xiii)

treated as a discrete subset, certainly, of the idea

of the concept of banking and (xiii) makes both

positive and negative provision with respect to

Cormnonwealth power over State banking as that subset.

The positive grant is expressly limited, whatever

the limitation be. It is limited to State banking

extending beyond the limits of the State concerned.

The fact that it is stated both positively and

negatively leads one to infer that the negative

grant has a purpose. Had it been just intended to

give a positive grant, presumably it could say banking -

and there might then be another placitum - State banking

extending beyond the limits. The carve-out has

occurred. I think I would be repeating myself if I

endeavoured·to develop it further, Your Honour. Your Honours, in paragraph 9 we collected the

authority in point of precedent, the passages having

been set out in the judgment of Mr Justice Wilcox,

and we would submit that they are clear as to the

purpose and extent of the proviso to the proviso,

as it were, in placitum (xiii).

Your Honours, paragraphs 11 and 12 really only

state the con<;:!lusions that follow if the arguments

we have put are accepted. In our submission,one does
not need to delve into the consequences of the

Cormnonwealth having reached too far in its extended

definition of State banking in the definition of

"financial corporation" in the TRADE PRACTICES ACTS.

It is sufficient for the purpose of this case to say

that it was too far, it does not apply constitutionally

ClT31/l/LW	55	MR MASON, QC	6/3/90
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to the intrastate activities of the State Bank

in this case. In paragraph 12 we suggest a range

of permutations and combinations that may arise in

another case. Simply in support of paragraph 12(a),

the extended definition of "corporation" may still

have work to do even if the constitutional arguments

we have put are correct because sectio1J 45D provides,

in one of its permutations and combinations that

activities done to a corporation by an individual

trigger off the prohibition of 45D.

(Continued on page 57)

C1T31/2/LW	56	6/3/90
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MR MASON (continuing):  So there is work to do for the extended

definition, but when it comes to a Commonwealth

prohibition such as 52 then, in one way or other,

the extended definition has to be read down in order

to bring the 52 within power, in our submissior ..

DEANE J: Because one thing is that if you look at the definition

of "financial corporation" in the TRADE PRACTICES ACT

it seems to assume that "financial corporation" does not

extend, or does not include, a banking corporation?

MR MASON:  Yes.

DEANE J: Well now, if that be so the whole operation of the

TRADE PRACTICES ACT, in so far as it applies to

banking corporations, is based on the power

conferred by subsection (xiii)?

MR MASON:  Yes.

DEANE J: If one reaches, contrary. to your submissions,

the last stage is a powerful argument in your

favour at that stage. I notice also that services

in subparagraph C singles out the banker and

customer dealings. Where that leads I do not know, but

it would seem to be an important consideration on

the last question if one reaches - - -

MR MASON:	Yes and insurance too, again one sees perhaps an
attempt to reach for the insurance power there as well.

DEANE J: Yes.

MR MA3JN: If the Court pleases.

MASON CJ:	Mr Solicitor for the Commonwealth.
MR GRIFFITH:	I hand the Court our contentions.
MASON CJ:·: Thank you.
MR GRIFFITH:	The Attorney appears to argue that the Act is

within power but les.t we be ourselves guilty of

misleading or deceptive conduct, I perhaps could

indicate - to supplement the remarks I made as I

announced our appearance, that on our preferred

construction we contend, as is stated in paragraph 2

that there is a valid reach in respect of misleading

or deceptive conduct under sections 52 and 52A in
respect of intrastate activities including those
of State banks, without engaging in the next step

which is necessary for my learned friend,

Mr Spigelman, as we see it and that was touched upon

by His Honour Justice McHugh, as to whether or not

in these particular circumstances there was a good

case made out. But on the question of construction,

ClT32/l/ Jt	57	6/3/90
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we do assert that section 52 and section 52A may

apply to activities of a State bank that are not

activities outside the State.

In our submission, there is very much in issue of statutory construction involved here as indicated

by the judgment of Justice Wilcox, in particular

at the appeal book page 33. In 1977, t~ere was an

amendment to the definition of "financial corporation".

Up to that time "financial corporation'' was defined

as meaning a financial corporation within the meaning
of section 5l(xx) of the CONSTITUTION and on its

plain reading, we would submit that would include

a State bank as being a financial corporation. At

that time - then there would be no difficulty, we

would submit, to address the issue which has been

addressed particularly in the exchange between

members of the bench and my learned friend,

Mr Spigelman, as to the question of characterization

as to whether or not this law would be regarded -

the application of section 52 and section 52A

generally as a law directed to misleading and

deceptive practices affecting financial corporation

and, indeed, all others within the reach of what

the Commonwealth can cover. In the absence of

qualification in respect of State banking, at least

by its terms, one could clearly say that State banks

would seem to be within the reach of a financial

corporation.

(Continued on page 59)

ClT32/2/PLC	58	6/3/90
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MR GRIFFITH (continuing):  As was indicated by Justice Wilcox,

there was an amendment in 1977 which, we concede,

could have been more appropriately drafted with
the wisdom of hindsight but there it is and that
is the amendment that was necessary for

Justice Wilcox to deal with and for the court·

and that amendment was to say, "It inc:'..'.:udes a

body corporate that carries on as its sole or

principal business, the business of ba~king

other than State banking, not extending beyond

the limits of the State concerned" and then a

reference to insurance.

It would follow and we agree with the approach of Justice Wilcox, if there is a preliminary issue

of construction of this definition as to whether

it has effect of including only the out-of-state

activity of a State bank or whether it also appears

to include the intrastate transactions of State

banks and Your Honours will recollect that

Justice Wilcox at pages 33 and 34 and 35 of the

appeal book discussed that choice of meaning and

thereafter His Honour engaged in discussion which

we would pick up by reference and concur with to

conclude that the broader view should be taken

that one should construe the expression added

by the 1977 amendment to include the business of

a State bank if its business extends no matter

how minimally beyond the State concerned. So - - -

DAWSON J: That is not to depend in any way upon the

constitutional - - -

MR GRIFFITH: It is construction, Your Honour. So that

if there is a State bank·which is not engaged

in any activity outside the State, which His Honour

Justice Wilcox pointed from common knowledge is

unlikely, we would contend that such State bank

would not be embraced by the amended definition.

provision such as section 52 and section 52A but We would say that it could be covered by a	the effect of the amendment would be to exclude it
from that definition.

(Continued on page 60)

ClT33/l/SH	59	6/3/90
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DAWSON J:	What was the purpose of the amendment then?
MR GRIFFITH:	Your Honour, without being privy to those

who carried through the amendment I am unable

to say.

DAWSON J: It added nothing, in other words?

MR GRIFFITH:  Your Honour, it might have - there can be

various reasons as to why it was thought

appropriate to put in an exclusion in respect

of State banking but one might be, Your Honour,
because there are possible constructions as to
the exemption of State banking in placitum (xiii)

but one might suggest that it would have been

more helpful to have had an exclusion in respect

to activity rather than by definition of

corporation. That was not the measure adopted

so we are left saying we are unable to say but

we do say it is not very satisfactory.

I mean, we are left with the point, now, Your Honour, where we say, "Well, we could include

the State Bank wholly engaged in intrastate

activity if one exists' but we concede on this

definition as amended we do,not.

However, Your Honours, it is common ground

that the State Bank, as perhaps is the case of

all State banks, is a bank which is concerned

in activities beyond the State and it is our

submission that the broader construction: as
to the meaning of this definition, as a matter
of construction and not constitutional power,

is the appropriate one to be adopted for the

reason stated by Justice Wilcox, and we will

not go. through those again.

So construed, Your Honour, in this case

the State Bank, admittedly, is engaged in activity
outside the State, although not in respect of

any material matter alleged for the purpose of

the applicant's claim against it.

We submit, Your Honour, that in their natural

meanings, section 52 and section 52A apply to

the State Bank, that it is a law to be characterized,

with respect, to misleading and deceptive

practices; in this case, of financial incorporations

including the State Bank. And we would submit,

Your Honour, that this reach of power to the

State Bank in intra as well as interstate activity

puts it in no different position from laws with

respect to, for example, currency, bills of exchange,

census and statistics and matters of that sort.

C 1T34/l /ND 60 6/3/90

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MR GRIFFITH (continuing): It is part of the underlying law

which applies to the bank as a financial corporation.

If this law was to be characterized as a law with respect

to banking, we would concede that it could not validly
apply to the State Bank and it would be necessary to
read it down but, in our submission, Your Honcur,
because of the nature of the exception in
placitum (xiii) the Court here must, of r1ecessity,

engage in an issue of single characterization of the

sort now discarded generally with respect to issues

of characterization of Commonwealth laws, both with

respect to the various paragraphs of section 51 and

also with respect to matters falling within

paragraph 51 and matters falling outside Commonwealth

power.

So that we submit, your Honour, that engaging 1n

an issue of characterization it is plain that this law
cannot be characterized as a law with respect to

banking and therefore, we submit, Your Honour -

BRENNAN J:  What is your concession if it were to be so

characterized?

MR GRIFFITH:  Your Honour, if it were a law with respect to

banking - - -

BRENNAN J:  Simpliciter,or that, and with respect to

corporations as well?

MR GRIFFITH:  Your Honour, we would say if it is a law with

respect to banking,, so characterized it cannot validly

apply to a State bank even if it also could be

characterized as a law with respect to corporations

or some other power.

BRENNAN J:	I see.
MR GRIFFITH:	It might validly apply to banks other than State

banking supported both by the banking power and by other
powers, Your Honour, but that would be an unnecessary

examintion because, on either view, it would be

within power. But, Your Honour, we do concede that if

it is a law generally characterized with respect to

banking, not just with respect to State banking, then

it is to be justified, if at all, under plactium (xiii)

in respect to its reach to State banking and,

Your Honour, it cannot be characterized, as we would

here, as a law justified, for example, under the

corporations power, just merely because the State

bank happens to be within the definition of financial

corporation. So, Your Honour, adopting that construction,

layering it on the interpretation of the extended

definition or restricted definition of financial

corporation which was accepted by Justice Wilcox and
which we accept, we submit, Your Honour, that section 52

and section 52A may validly apply to the State bank

in respect of intrastate transactions.

ClT35/l/HS	61	6/3/90
Bourke(2)

MR GRIFFITH (continuing):  As to whether it applies in

this particular transaction, we have no submissions,

Your Honours.

Our remaining submissions are really built

on alternative approaches if this approach is

not accepted by the Court. We would st 11'111it

that on any view section 52 and section' 52A may

be regarded as valid and read down so dS to be

within power. In paragraph 3, we make our

preferred construction in that event that it

would be limited to apply to out-of-State

transactions which, for example, were not.

sufficiently covered by the extended operation

of section 6(2)(a) and (h) in respect of the

trade and commerce power and activities by

bodies other than corporations as defined under

the Act.

We submit that section 15A could enable

reading down in a distributive sense and we refer

to the various of Their Honours' judgments in

RUSSELL V RUSSELL supporting this construction

although, of course, it would not seem to then
apply to the transaction which is alleged in

the statement of claim here.

Our third and not preferred construction

is to say that the alternative rejected by

Justice Wilcox should be adopted and that these

sections do not purport to apply to intrastate

activities of the State Bank and, therefore,

no question of invalidity would arise but that

also is a construction which we say is against

the tenor of the Act.

Before we end our submissions, although we . have not raised this in our submissions, we think

it is appropriate to put before the Court a

submission in respect of what is the meaning of

"State banking". (Continued on page 63)

ClT36/l/SH	62	6/3/90
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MR GRIFFITH (continuing):  Now, in this case Justice Wilcox, of

course, by way of obiter, held that the State Bank was not the Crown. That is not a matter subject to appeal

and, indeed, as it was obiter, probably, of course, there

was no occasion to appeal from that finding but

it is our general submission that in that finding

His Honour was correct. As His Honour pointed out in

his judgment that the legislation under Nhich the

State Bank is established is not significantly different

from the GOVERNMENT SAVINGS BANK ACT 1906-of New South

Wales which constituted the Rural Bank of New South Wales. And the High Court has held on at least two

occasions that Rural Bank was not within the shield
of the Crown, firstly in the RURAL BANK OF NEW SOUTH

WALES V BLAND SHIRE COUNCIL, (1947) 74 CLR 408 and

RURAL BANK OF NEW SOUTH WALES V HAYES, (1951) 84 CLR 140.

On the other hand, of course, the High Court has held that the State Bank is the State within

the meaning of section 38(d) of the JUDICIARY ACT which

is, of course, language derived from section 75(iii)

of the CONSTITUTION. The Court has been satisfied

that the State carries on banking through its
statutory corporation, the Bank. So, for example,

that was shortly stated at the end of the Court's

judgment in STATE BANK OF NEW SOUTH WALES V

COMMONWEALTH SAVINGS BANK OF AUSTRALIA, (1986)

161 CLR 639 at page 652.

But the point we make is that the High Court has not yet specifically decided that the State Bank

is engaged in State banking within the meaning of

placitum (xiii) of the CONSTITUTION. State banking,
of course, has been said to be banking conducted by
or on behalf of the State, and there is no need to

take the Court again to the passages from

MELBOURNE CORPORATION and the BANKING case which,

of course, they are concerned - members of this Court

considering legislation aimed directly at banks.

T37 We would submit that there is a possible choice

of meaning here, that the"State banking' could be

regarded as having a narrow meaning coinciding with

the shield of the Crown or might have a wider meaning

such as has been adopted in the ~ression "a State"

for the purposes of section '38'(d) of the JUDICIARY ACT.

Now, a wider meaning was given to "State banking" by

Justice Starke in the MELBOURNE CORPORATION case,

74 CLR at pages 69-70 and included:

banks owned or managed by State Governments

or any authority of a State Government -

he thought it included savings banks, other State

banks constituted since Federation. any, if not all

of whom, we would say, would seem to be outside the

shield of the Crown.

ClT38/l/PLC	63	6/3/90
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Now, perhaps it is appropriate to give a wide

meaning because of jurisdictional provisions such
as 75(iii) or (iv) which indicate that the founding

fathers wanted to ensure access to the impartial decisions of the High Court including in matters dealing with Connnonwealth and State instrumentalities.

On the other hand, a narrow reading might be given to

"State banking" in placitum (xiii) becevse otherwise

one might take the view that the Commonwealth powers

over the banking industry are subvert8J. The
Connnonwealth is not inclined, particularly, to urge the Court to take the narrow view but we do point

out to the Court that it is something which has not

yet specifically been decided by this Court and

perhaps it is appropriate for it to be dealt with not sub silentio but by the Court addressing this issue as this case arises under placitum (xiii).

If the Court pleases.

DEANE J:  Mr Solicitor, can I take you back to characterization?

T38	MR GRIFFITH: Yes, Your Honour.
DEANE J:  I can see, of course, the force of the argument this

Act or the relevant section characterized as misleading or deceptive conduct but that is an irrelevant

characterization for the purposes of constitutional

power. What do you say is the relevant characterization?

MR GRIFFITH:  Your Honour, the TRADE PRACTICES ACT is a difficult

Act to characterize because its initial approach is
via the corporation's power and then by extended

and substituted definititions, particularly through

section 6, Your Honour, a wider reach is taken up

picking up trade and connnerce, broadcasting et cetera.

DEANE J:	But that is the problem from your point of
view,is it riot?

MR GRIFFITHS: Yes, Your Honour,we submit here that it is

sufficient to start on the corporation's power

and say that it is a law with respect to the

corporations.

DEANE J:  I have no difficulty with that in understanding

it in terms of the 1974 Act, but when you go to the definition of "financial corporations", does it not

make it clear .that in so far as a corporation

carrying on State banking is concerned,the relevant

characterization is that which refers to placitum (xiii).

ClT39/l/JL	64	6/3/90
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MR GRIFFITH:  Your Honour, the definition was originally

comprehensive. It was then made really less

comprehensive, Your Honour, by excluding a category.

DEANE J:	You cannot help thinking that somebody, rightly or wrongly, thought that the corporation power did not extend to banks as corporations but that you had to
look to the banking power for that.

MR GRIFFITH:  Yes. Your Honour, we would not 3eek to use in

this Court authority what other people thought
the corporatiorrs power extended to when drafting

legislation.

DEANE J:  Yes, but when you come to the definition of

"financial corporatiorl' it is a bit hard to escape from

the notion that it is not including banks and

financial corporations but getting them by reference

to the additional - - -

MR GRIFFITH:  Your Honour, we entirely agree it is a bit odd.

Justice Wilcox had to address this oddity, Your Honour,

and say, "Here is an amendment put in 1977, what does

it do?~ Now, Your Honour, on one view the second construction adopted by Mr Justice Wilcox has some

arguments in its favour becau~e that really has regard to

issues such as the sort that Your Honour refers to

and more or less, in that construction, picks up the

limitation to only cover out-of-State transactions.

Now, it really is, Your Honour, a matter of

construction of the amendment itself and we submit,

Your Honour, that on that Justice Wilcox's conclusions

have the balance of the argument.

That is a point, Your Honour, where minds might

differ but, we submit, Your Honour, that the approach

taken by His Honour is appropriate.

DAWSON J:  In other words, you include the business of banking

only to give some meaning to the exception which you

conceive you have to put in for some reason or

another. (Continued on page 66)

ClT40/l/HS	65	6/3/90
Bourke(2)
MR GRIFFITH:	Yes, Your Honour.	It would have been better

if we had done nothing because then we would have

had this issue identified as a clean issue.

DAWSON J:  But, in answer to Justice Deane, the express

inclusion of a body	corporate that carries on
banking is only for	the purpose of bringfng in the 1
exclusion.

MR GRIFFITH:	Yes, Your Honour, with respect, we v;utJ.ld accept that.
DEANE J:	But, why would you want to exclude on your argument?
MR GRIFFITH:	Your Honour, we do not know why we wanted to

do it at all, Your Honour.	We probably thought it
was a good idea at the time.	Your Honour, it is 1977,

Your Honour; one was doing all these issues of the reach

of corporations power and, no doubt, it was thought

topical and relevant but, Your Honour, it is not much

help any more than saying that a clear view is

taken in drafting a Commonwealth bill in respect of

ass.erting the power to incoporate it.

DEANE J:  The problem is, read the definition of "financial

corporatioti into section 52 and section 52 then has

an identifiable component which says, "A body

corporate that carries on its sole or principal

business, the business of banking, other than State

banking'~, and so on," shall not - ;- -'~. Do

you say that is to be categorized as a law with

respect to financial :- corporations?

MR GRIFFITH:  Yes, . Your- Honour:· We v.10uld · say all'--corporations

except those that are State banks trading only in

interest rate activities are obliged, et cetera,

and that recognizes the exception. Your Honour,

we accept that is unhappy.	It should be done more
directly.

(Continued on page 67)

ClT41/l/JH	66	6/3/90
Bourke(2)

DEANE J:  It is not the way the TRADE PRACTICES ACT is

structured, unfortunately. When you come to the

additional operations and so on, it is all hotchpotch

of collective provisions to attract power.

MR GRIFFITH:	Of course, Your Honour. And, at the end of the day, Your Honour, we are anxious to vindicate
the issue of power rather than constructL)Il. I
mean, if because of this difficult amendment, Your Honour, one says, "Well, you could've got there,
but you haven't", well then, that will fall with the
amendment.  But the essential issue, Your Honour, one
we seek to address ourselves, Your Honour, is the
question of power, if so constructed and in this
particular language to say it is not beyond power but we appreciate Your Honour's points which are valid
criticisms, Your Honour, which would invite someone
to do better next time but what we submit, Your Honour,
is that on this aspect there can be a next time to have general legislation which can apply to corporate
entities including those engaged in State banking, whatever that means.
DEANE J:	Thank you.

MR GRIFFITH: If the Court pleases.

MASON CJ:  Thank you, Mr Solicitor. The Court will now adjourn

but might I ask the remaining interveners if they

would hand in their outlines of submissions to the

Court attendants and they can be conveyed to us

during the luncheon adjournment.	The Court will
now adjourn until 2.15 pm.

AT 12.46 PM LUNCHEON ADJOURNMENT

ClT42/l/JH	67	6/3/90
Bourke(2)

UPON RESUMING AT 2.18 PM:

MASON CJ:	Mr Solicitor for Western Australia?
MR PARKER:	May it please Your Honours, if I coul1a. start please

at the end rather than the beginning of our

submissions in view of the debate before lunch.

We saw sections 52 and 52A as laws with respect to banking. They are also laws with respect to

financial corporations. We saw them as laws with

respect to banking because the definition of
"financial corporation" which must b-e r·ead into

sections 52 and 52A necessarily, and by the express

words of the Parliament, include a corporation that

carries on the business of banking so that the

Parliament specifically directed its mind to those

parts or those financial corporations which were

banks and expressly embraced them within the scope

of this provision.

In sections 52 and 52A the effect of the the exception, in trade or commerce shall not engage	definition is that a banking corporation, subject to
in misleading or deceptive conduct and, of course,
the colillllerce in which a banking corporation engages is the business of banking. If single characterization still prevailed, the position would be different, but
in the present climate these provisions in our
submission are,inter alia, laws with respect to banking.

As one test, perhaps, of that provision, were

section 5l(xx) to be disregarded and the question had

to be answered, "Are sections 52 and 52A valid laws

of the Commonwealth in their application to banks?",

the answer would be, yes, because of the banking power.

McHUGH J:  But Mr Solicitor, the definition has a reach beyond

banking, has it not?

MR PARKER: Yes, indeed.

(Continued on page 69)

ClT43/l/LW	68	6/3/90
Bourke(2)

MR PARKER:  Yes, indeed.

McHUGH J: Because it includes a body corporate which it

identifies as a body corporate whose main business

is banking, so that bring it within 52.

MR PARKER:  Yes, we are certainly not saying, "It is only

banking", if it please Your Honour, it is"banking

and other things'.' The 'bther things"may well

dominate but'banking"is expressly part of the

reach of the provision. Now there is, of course,

a real sense in which sections 52 and 52A can be

characterized as laws with respect to misleading or deceptive conduct, but under current thinking

that does not answer any relevant constitutional

issue, certainly not an issue as to constitutional

validity and one must turn to determine under

what heads of power the provision may be supported.

It does not matter, in our submission, that one

finds there is more than one head of power and of

those that one may be seen to be dominant or even

so pervasive as to make recourse to others unnecessary.

If banking can be called in support of the validity

of the law., in· our respectful submission on the

present received approach, it is a law with respect

to banking whatever else it may be.

Upon that assumption it was thought sufficient

for this present case - - -

DAWSON J:	When you say ''law with respect to banking",you mean a law with respect to banking activities?
MR PARKER:	My submissionshad not gone into analysing

DAWSON J: Well,what does the word "banking" mean?

MR PARKER: Well, it was sufficien4 in our submission, in

this case. that the Parliament had expressly

identified "banking" as within the scope of its

provision in the context of a provision that expressly

turns to trade and commerce and therefore trade

and commerce of the Bank and it seemed to us to

be sufficient to say that must mean the business of

banking . So that on any view that is taken and there

is some minor variation of the precise formulation,

this law, in our submission, attached itself to the
business of banking and as such was a law with

respect to banking.

C1T44/l/JL	69	6/3/90
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MR PARKER (continuing):  Of course, we have framed because

of that our propositions on the basis that we are
dealing with a law with respect to banking. In

future we may need to meet a different case and

a wider case and some of the discussion this

morning concerned that possibility but on the
assumption, the further assumption, per~aps, df

the correctness of our second submissi0n which

was that the banking activities conducted entirely
within the relevant State of a State bank are not

within the reach of Commonwealth power under 51 (xiii),

upon the assumption of the correctness of that, in

our submission 51 (xiii) makes it clear that a law

with respect to banking may not touch internal State

banking. That is expressly excluded from the grant

of power. From that, on the first of alternative

approaches that we would put, the question that

arises in this case and like cases is whether a

law that may also be categorized as a law with

respect to another head of power but is also a

law with respect to banking may be valid under

that other head of power notwithstanding it intrudes

into the area of the exclusion of State banking.

In our submission, the answer to this may

vary according to the competing heads of power.

There may not be and, in our submission, there

is not one universal rule or answer. The terms

and the nature of the competing head of power and
its relationship with banking may be material in
determining whether the exclusion of State

banking must prevail or not. At heart, in our

submission, the legal issue is one of internal

construction of section 51 which is to prevail

between two heads of power; one that has an

area excluded from it and another that does not

when the law may be justified under both. Now,

in that exercise - - -

McHUGH J:	Why cannot you read the definition of "financial corporation" as simply meaning that it means "a
financial corporation within the meaning of
paragraph  (xx) or a.ban~ing corporation but
not a State banking corpororation unless its banking extends beyond the limits ·of the State?

(Continued on page 71)

C1T45/l/SH	70	6/3/90
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MR PARKER: If that is all that it means there is no

constitutional problem, if it please Your Honour,

and our submissions - -

McHUGH J: Why cannot you read it that way?

MR PARKER:  Our submissions are not going to that, that

we are leaving to the parties, the pr0cise

construction of that. If it is not entirely

coexistent with the exclusion from internal State

banking then the constitutional issue that we

are discussing arises.

DAWSON J:  But I thought you also said that sectiorn52

and 52A were laws with respect to banking in

so far as they applied to banks.

MR PARKER:  Yes, and therefore the issue is relevant, "Do

they or do they not respect the exclusion from

internal State banking".

DAWSON J: It is the latter proposition I am not sure that

I understand. The law, with respect to banking

is a law with respect to the things that banks

do as bankers. Now, bankers may engage in

misleading deceptive conduct but they hardly
do it as bankers, do they or, in a sense, that is if
eometh ing is not peculiar to banking, it is

behaviour that is across the board.

MR PARKER:  Yes, I appreciate what Your Honour says. I

do not know that I can take it much further than

we have put already. It is not just misleading

or deceptive commerce. When you interpolate

the definition into section 52 and into section 52A

it says; "a bank, in trade or commerce, shall

notv, and we would have thought that the

inevitable result of that is that the provision

is directing itself in this · operation· to the

business of banking.

DAWSON J:  A banking corporation may be guilt of theft

but you could hardly say that the law with respect

to theft is a law with respect to banking.

MR PARKER:  I do not believe my submission embraces that,

if it please Your Honour.

DAWSON J: All that section 52 says is "a corporation shall

or shall not".

MR PARKER: If it please Your Honour, it says two additional

things relevantly, in our submission, "a corporation

in trade or commerce" and that when it says "a

corporation" those words expressly include a

bank.

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DAWSON J: That is by reference to the definition.

MR PARKER: Yes. Well, the definition is - - -

DAWSON J: Putting the definition on one side, would you

say that section 52, for instance, was a law with

respect to banking?

MR PARKER:	No, not for the purposes of our present submission.
DAWSON J:	I see.
MR PARKER:	That may be the argument that we have to face another

day, that I was careful to say we would leave for

another day, but for the moment our propositions do

not need to reach that far. But here, one cannot

ignore the definition which is ever present and

speaks as part of section 52.

DAWSON J:  You see, on one view, and one view with some force in it,

the definition adds nothing, it does not say anything.

Upon that view, do you say that section 52 is a law

with respect to banking?

MR PARKER:  Your Honour will appreciate that we do not, in our submission, see the definition as doing that. The

definition is expressly saying, whatever else

financial corporation means, whether or not it means

banks, take notice, we expressly mean this provision

to include banks, and, in our respeotful submission
that form of specific legislative provision cannot be

ignored in deciding whether this law, in the way it

is framed is, among other things, a law with respect

to banking.

DAWSON J: Well, as I understand the Commonwealth,

they say it can, but you do not want to meet that

argument.

MR PARKER: Well, I am sorry, clearly, if it please Your Honour, I

am not able to convince you that what I am putting

does.

DEANE J:	Is not the answer that if you ignore the definition,
section 52 is beyond Commonwealth power, because it is only by giving the defined meaning to'corporation"that
the section as a whole comes within Commonwealth power?
MR PARKER:	If it please, Your Honour, yes, and, of course,

that was the point of our saying that you may well

regard this law as simply a law with respect to misleading

and deceptive conduct.

DEANE J: Well, if that is so, why do you accede to the example

about a law that a corporation will not steal from the

registrar.

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DEANE J (continuing) : If ~½.at is in a Co:..:rm:mwealth Act, you have to

go to the corporation to bring i~ within Cormnonwealth

power.

MR PARKER:  I understood the question to be whether such

a law was a law with respect to banking and, unless

one has the chain of definitions that 'Cle has here,

my submission would not treat such a law as a law with

respect to banking. -

McHUGH J:  But section 52 is a law about misleading conduct.

It is also a law with respect to trading and financial corporations, including banking corporations, is it not?

MR PARKER: That, in our respectful submission, is what I was

trying to put.

McHUGH J: Yes.

MR PARKER:  If it please, Your Honours, if I could move on then.

--The issue appears to us, to be at heart ,one of the

internal construction of section 51, recognizing that

there is not perhaps a great deal to guide us within

the provision. Now we would start with the proposition

that has already been referred to by my learned friend,

Mr Mason, from the decision in SCHMIDT and perhaps before turning to that for a moment, could I just

remind Your Honours of the statement to similar effect

in the ROCLA CONCRETE PIPES LIMITED case by

Mr Justice Menzies, STRICKLAND V ROCLA CONCRETE

PIPES LIMITED,124 CLR, cormnencing at 468, but it is

His Honour says:  at page 507 just below the middle of the page,

(Continued on page 74)

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MR PARKER (continuing):

Nevertheless, when there is to be found a limit in the definition of one subject matter the others

should not be construed as enabling Parliament,

by legislation on a different subject matter,

to override that express restrictivn:

Of this s. 5l(xxxi) provides the simplest

example, but ..... there is to be found another

example, namely a limitation upon s. 5l(xx)

arising from the terms of s. 51(xiii).

Turning back to SCHMIDT which Your Honours heard

this mornin& reported at 105 CLR, and it is

particularly at pages 371 and 372 that the passage

was referred to. In SCHMIDT - and these words of the

Chief Justice were, of course, approved and

adopted by every other member of the Court so it is

a unanimous decision. The approach in cases to which

the principle was to be applied was in form at least
to read down the other grants of power so that they

did not include the power, the subject of the

exclusion or restriction.

The discussion at page 371, corrnnencing just

about half-way down the page, demonstrates that,

just after the citation ending "per Dixon J":

The decisions of this Court show that if

par. (xxxi) had been absent from the

CONSTITUTION many of the paragraphs of s. 51,

either alone or with the aid of par. (xxxix),

would have been interpreted as extending to

legislation for the acquisition of land or

other property for use in carrying out or giving

effect to legislation enacted under such

powers. · The same decisions, however, show
that in the presence ins. 51 of par. (xxxi)
those paragraphs should not be so interpreted

but should be read as depending for the

acquisition of property for such a purpose upon

the legislative power conferred by par. (xxxi)

acquisition must be on just terms. subject, as it is, to the condition that the

And, of course, it is a reference back to that which

the very last sentence in that passage, over on page 372,

at the middle, is referring, a passage which attention

was drawn by the Court this morning:

It must be borne in mind thats. 5l(xxxi) confers

a legislative power and it is that power only which

is subject to the condition that the acquisitions

provided for must be on just terms.

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Where this principle is applied, all other powers

are read back so as not to include that power

and it is the power which is subject to the restriction

alone to which effect is given so that the

restriction prevails.

(Continued on page 76)

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MR PARK.ER (continuing): But the issue posed by this is,

"Well is this a case to which this principle should

apply?", and Your Honours will notice connnencing

on the third line of page 372 the first of the

observations which Sir Owen Dixon expressly made.

First, it is necessary to take car~ against

an application of this doctrine to th~

various powers contained ins. 51 in a too sweeping and undiscriminating way. For it cannot have much to do with some of the

subject matters of power upon the very terms

in which they are conferred.

There was put against us in submissions this morning

that, for example, the currency power or the bills

of exchange power, must prevail if sense is to be

given over the exception of State banking in 51 (xiii) .

In our respectful submission that result may well be

correct and the reason that it is correct flows from

a careful consideration, in our submission, of the

portion that I have just read from the passage in

SCHMIDT of Sir Owen Dixon. One must consider the terms

and the object of the two competing grants of power,

the one with the exception; the one without it, to see
if it is possible to discern the intention of the

section as a whole, whether the one with the exception

is to prevail so that there is no legislative power

with respect to the exception, or whether the other head

is to prevail and therefore be freed of the exception.

When one comes to heads, such as currency and

bills of exchange, specific, precise subjects which

necessarily, in part, intrude into the business of

banking and has to juxtapose those with the banking	power, in our respectful submission, the specific
nature of the power, say with respect to currency, and its obvious direct interaction with banking
does provide a basis for concluding that that
power with respect to currency should be seen as prevailing and, therefore, when one is looking
power and under the currency power, one can say, at a law that is justified both under the banking "This is not a case to which the principle in
SCHMIDT ought be applied". Likewise with the
bills of exchange power.

(Continued on page 77)

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MR PARKER (continuing): If, by way of contrast, one turns

to a power such as section Sl(xx), the subject-

matter, financial corporations, by its sweep

and generality and because it does not in terms

necessarily attach itself to any activity or

function of banking, one may well reach the opposite

conclusion; if one is looking at a l1w justified
both as a law with respect to banking and a law
with respect to financial corporations, then
the intention one might find from that competition
is to see that the banking power with its exception

ought prevail.

McHUGH J:  Do you accept that banks - a banking corporation

is a financial corporation for the purpose of

paragraph (xx)?

MR PARKER:  For this first submission, yes. Our alternative

submission, as Your Honours may have noticed,

is to adopt some of the reasoning in earlier

decisions.that puts the other approach; that is to say, that one may treat 5l(xiii) as the

special case and 5l(xx) as the general and the

general cannot derogate from the special so that

one construes "financial corporation" as not

including banks. Now, we advance that as an

alternative.

(Continued on page 78)

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McHUGH J: Well, supposing Westpac sets up an intrastate

travel service, could the Commonwealth regulate

that under the banking power or would it have

to rely on the corporations power or some other

power?

MR PARKER:  One starts with with the first problem, whether

the travel service is banking properlJ understood

in the constitutional sense and there would be

a lot against the acceptance of thar proposition.

If it were then an intrastate activity which

was properly categorized as banking, our submission
would be "No".

The point we were seeking to make from those

words of Sir Owen Dixon in SCHMIDT is that there

is not just a universal rule that you can apply

to all the placita. The placita differ in subject,

context and from that alone may often be discerned

a sense of intention and purpose. And when one

comes to matters which must necessarily have

some intrusion into banking and see that they

are the subject of an unqualified grant of power

one may more readily be persuaded of such a power,

and currency is an example, that that was intended

to prevail, whereas one finds a head of power

such as financial corporations- on the assumption for

tnis purl)ose- ·that ·that· would otherwise include

a bank and does include a bank .. - one comes to see,

is it the....intention that that should prevail desnite

the exoept~on with respect to banking?

And in addition to the

submissions I have already put the submissions

my learned friend, Mr Mason, this morning add

emphasis to the fact that in that particular

consideration there are significant reasons for

thinking and concluding that the intention was

that Sl(xiii) should prevail in so far as the

financial institution corporation may be involved

in the business of banking.

(Continued on page 79)

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MR PARKER (continuing): And relevant to that, of course,

is to find within section Sl(xiii) itself the

express power with respect to the incorporation

of banks. There is a constructional issue yet
unresolved whether that is limited in respect of

State banks. If it is not, then within Sl(xiii)

itself there has been conferred upon ~he

Parliament the power to overcome entirely the

limitation that is expressed in section Sl(xiii),

because by requiring the incorporation of all
banks it could then legislate without restriction

under Sl(xx). So that circumstance, in our

submission, adds further force to the view that,

when one is comparing the subject-matter, the

grant of power financial corporations, which has
no necessary connection with the business activity
of banking and the grant of power over banking
subject to an exception in Sl(xiii), the proper

construction of section 51, the intention to be

~iscerned is that (xiii), with its exception,

should prevail, so that a law which was among other

things a law with respect to banking, as well as

a law with respect to trading corporations, could

not be valid under Sl(xx) if it or to the extent that

it ignored and was beyond the exception from

Corrnnonwealth power expressly provided in Sl(xiii).

BRENNAN J: Suppose it is a part of the proposition

about Sl(xx) to say that it is a law with respect

to persons. If it is a law with respect to persons,

it is a law with respect to the activities in which

those persons, as against other persons, engage, so

that it is a law with respect to activities of a

financial nature, and on that basis it carries an

activities power over banking.

(Continued on page 80)

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MR PARKER:  I am not at all seeking to deny that it has

that capacity. What I am pointing to is that it is

not an express statement as one has,by contrast,

with, say, currency or bills of exchange.

BRENNAN J:  That might very much be in your favour but here

you have got a general power over bankiI1g and

there you have got a specific power over banking.

MR PARKER: Yes, except that (xx) does not reveal any necessary

intention of intruding into the business of banking.

Much law could be enacted under Sl(xx) without

necessarily intruding into the business of banking,

whereas with currenc~ it is a necessary and inevitable

consequence that there should be some intrusion
into the business of banking and, therefore, it is

the nature of the currency power which, in our submission,

tends to the view that that one was intended to prevail

over the banking exception.

BRENNAN J: What would you say about, for example, the international

trade power in respect of a law which said that no

bank shall issue a draft upon a foreign bank without

the approval of Treasury?

MR PARKER:  I am reminded, if it please Your Honour, that once

is outside the exception as virtually any

international obligation, with respect to banking,

would be because it would have a reach outside the

State. But putting that aside for a moment -

BRENNAN J: Issuing to a local customer of a draft on a

foreign bank? Well, youimybe right?

MR PARKER:	Well, can we;·come_- leaving that aside - to an
international obligation imposed under a legitimate
treaty, in respect of a banking activity of a
bank within a State.  Now that is necessarily like
most questions that are posed under the external
affairs power, one of the $64,000 questions. We
would be wanting to submit in respect of that
necessary intention of intruding into the exclusion that the external affairs power revealed no area of internal State banking and, therefore, like
Sl(xx) it would properly be read as subject to the
exclusion and we would contrast the external affairs power with currency or bills of exchange on that
basis. But there is obvious scope for different views about that and I would respectfully submit that
one can see that as a hard case and one which will in the end, perhaps, come to be a very difficult one to resolve. But there are easier cases within section 51
that are more readily resolved and we would submit that
if one is looking at a law which is both under
section Sl(xx) and (xiii), the case is far easier and

ClT54/l/JL	80	6/3/90
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that the intention properly discerned is that

the exception in (xiii), should prevail. If

it please Your Honours.

MASON CJ:  Yes ,. Mr Solicitor. . .

MR BERKELEY: This case is about the State Bank of New South.

Wales, in the course of its banking husiness, making some representations to a customer for the purpose of

a customer getting a loan and the constitutional

question only allies this if section 52 of the in the course of those banking transactions.

Now, in SCHMIDT's case, Sir Owen Dixon formulated

a principle of construction which it is appropriate

to apply to a written constitution,-we would prefer

to call it "a principle of connnon sense"-and it is

interesting to note that in the same passage

His Honour draws attention, or emphasizes, in connection

with this principle of construction the further

principle that what the legislature is forbidden

to do directly, it cannot do indirectly.

(Continued on page 82)

ClT54/2/JL	81	6/3/90
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MR BERKELEY (continuing):  Now, that principle was

formulated in connection with paragraph (xxxi)

"Acquisition of property on just terms" but,
·in our submission, it can be applied to any

other part of section 51 of the CONSTITUTION

which contains a limitation or qualification '·

upon ,the 1egi:i:slative power granted to t't, ~

Commonwealth. For instance, paragraph (iii) has

the power on the part of the Commonwealth to

grant bounties. Bounties could equally well

be granted under the trade and commerce power;

that is, bounties on the production or export

of goods.

They could be granted under the external

affairs' powe~ in appropriate circumstances
under the defence power, or perhaps under the

corporations power but it cannot be thought

that under whatever power bounties were granted,

other than part (iii) that the Commonwealth would

be free from the limitation that those bounties

had to be uniform throughout the Commonwealth

and that is because that qualification is put

there for the protection of the States and what
the Commonwealth cannot do directly, it cannot

do indirectly by resort to some other head of

section 51; that is, the limitation in part (iii)

so that they are uniform throughout the Commonwealth.

It denies to the Commonwealth the power to legislate

in respect of a small part of that subject-matter.

It is like the diagrams which one sees in

elementary texts on logic. There is a big circle

with a little circle inside it and the little-circle

is the pa~t of the power that is denied to the

Commonwealth. This is called the doughnut theory

of constitutional law.

The same, in our submission, applies to paragraph (xiii). There is there a clear denial

of power to the Commonwealth and, in our submission,

whatever head of power would support the legislation,

if that legislation can_ on its proper construction

be called a law with respect to banking, even

though it may be a law with respect to something

else, that part of the power is denied to the

Commonwealth because equally that is put there

to protect the States. The States are to have

the sole legislative power to regulate the

relationships, the banking transactions, which

take place between the State and the citizens
or residents, the persons, in that State.

Now, Your Honour Justice Deane, in the course of argument, drew attention to the fact

C 1T55/l /SH 82 6/3/90

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that the limitation does not extend to incorporation

of State banks and there is, perhaps, two answers

to that question, Your Honour. The first is to

remind the Court that a camel is a horse that was

designed by a committee. The second is that ..

the power is a power with respect to banking, ~bt

a power with respect to banks and the ar~eption

is banking that is carried on by the State, not

banking that is carried on by a State- bank. So

that if, in fact, for its own purposes the State

regulates matters so that there is some statutory
couporation, the activities of that corporation
are not beyond Commonwealth power unless looking

at it you can say, "That corporation is the State

of New South Wales".

For the purposes of this case, legislation

can be characterized as legis.lation with respect

to transactions or legislation with respect to
persons or, perhaps, legislation with respect to

both.

Now, section 52 of the TRADE PRACTICES ACT

is legislation with respect to both; it is

legislation with respect to corporations as

defined but it is also legislation with respect

to transactions; that is, conduct in trade or

commerce of a certain kind and with all respect

to Your Honour Justice Dawson, it is our submission
that ·if within this larger circle "trade or commerce",

one can find the smaller circle "banking transactions",
then that section is legislation with respect to

banking even though it may be legislation with

respect to other things as well and, to the extent

to which it is legislation with respect to banking,

the denial of power to the Commonwealth which is

contained in paragraph (xiii) applies to it.

(Continued on page 84)

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MR BERKELEY (continuing):  Now, Your Honour says, misleading

conduct is not part of the business of bankers, or

Your Honour drew attention to a law about theft. Your Honour, that sort of proposition turns the constitutional denial of power into a matter of form rather than a matter ·of substance because what we

are talking about is the regulation of activity·

and what is being regulated here is ban~ing transactions,

and what the Commonwealth Parliament i~ saying - if

the constitutional question arises on the proper

construction of the TRADE PRACTICES ACT - is banking

transactions shall be carried on in a particular

way, or shall not be carried on in a particular

way. In our submission, the Commonwealth cannot do

that as far as State banks are concerned in relation
to activities within the States.

So that if you have a law with respect to transactions_ and the transactions are so described

that included within them are banking transactions,
then to that extent it is a law with respect to

banking.

DAWSON J: That is to say a law derives its character from

the persons to whom it is directed.

MR BERKELEY:  I think, Your Honour, that is not quite so, in

our submission, because when you look at a law which

is directed to persons, there is a distinction to be

drawn. That is to say, a law which is directed to

bankers, it says, 'ho banker shall engage in

misleading conduct'; or"no banker shall employ

any body under the age ·of 18': that is a law with

respect to banking because the person who is chosen
as the subject-matter of the litigation is chosen

because he engages in banking transactions, and not

for any other reason.	But if you get a law which
says - - -

DAWSON J: No, because· it is in relation to employment in

banking.

MR BERKELEY:	I am sorry, Your Honour.
DAWSON J:	. It is because it is a law with respect to

employment in banking.

MR BERKELEY: Well, I did not make myself clear. Let us say

it is in general terms, Your Honour: it may apply

to gardeners~ It is not an employment in banking~

But the person picked out is stated as "no banker

shall", or "a banker shall"; "no banker shall carry

on a business of real estate agency", that person

is picked out because he engages in a particular

activity: banking transactions, and that is what

makes it a law with respect to banking, but if you

ClT56/l/FK	84	6/3/90
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have a law which says "no corporation shall engage

in real estate agency", then that is not a law

even though that applies to banking corporations

it is not a law with respect to banking, although

it may be a law with respect to banking corpora4ions.

So that when we are looking at a liw with respect to transactions, there _is a distinction_ between that

and a law which is only with respect to persons, or a

law which is in respect to both, and what

paragraph (xiii) prevents the Commonwealth doing is

making a law with respect to transactions, that is,

banking transactions, even though they may be described

in general terms, because unless one takes that

approach, the constitutional pr~scription just becomes
a matter of what sort of general words you want to

use, and it would have no effect at all.

McHUGH J: Does that mean, Mr Solicitor, that if a State bank

publishes a false and misleading advertisement about, say, travel services it can arrange, it is within 52?

(Continued on page 86)

ClT56/2/FK	85	6/3/90
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MR BERKELEY:  Yes, Your Honour, that would be so because on the

assumption that is not part of banking activities
as understood in this day and age and that would be

within 52 because it may be a law with respect to
State banks but it is not a law with respect to

State banking. ~ ·

McHUGH J: Yes.

MASON CJ: Thank you, Mr Solicitor. Mr Solicitor for South

Australia?

MR DOYLE:  If the Court pleases, I think the Court has our

outline of submissions and some materials we prepared.

MASON CJ: Yes, we have.

MR DOYLE:  Your Honours, in our outline we refer in a number

of places to the convention debates. As the Court

has been taken to them I do not propose on any

occasion to refer in my oral submissions to the

debates.

Your Honours, the Solicitor for the Connnonwealth,

towards the end of his submissions, alluded to the

possibility that one did not encounter State banking

unless the banking were conducted by the Crown in

right of the State, as distinct from the State, and

it has been said in a number of cases that constitutionally

the concept of the State is wider than that of the

Crown. I was left unclear whether that was my

friend's submission for the purposes of this case or

something which he dangled to tantalize and distract

those who represent the States but in my submission

this would not really be an appropriate case for the

Court to embark on that issue. It has not been

addressed in the Court below. The parties in the

case have not directed submissions to it and it does

seem, as I said, to have come as a rather tantalizing

thought along the way from my learned friend.

But in our respectful submission, without departing

from the submission that the Court should not address

it, if one looks at contemporary usage such as is

available, there is no indication in it that State

banking was seen as limited to banking conducted by

the Crown in right of the State. It is clear when

one looks at the convention debates that a relationship

between the Crown and the banking was seen, but in my

submission nothing in those debates to suggest that

although the term "State banking" was used the narrower

cgncept of banking by the Crown was intended.

C1T57/1/LW	86	6/3/90
Bourke(2)

Your Honours, the materials which we prepared

for this case were not really directed to that issue

but, as it happens, in the book of material other
than convention debates there is a report of a

Victorian Royal Commission of 1895 on the topic of

State banking. It is the very first document in 'that

book. On this particular aspect I wil not read
from it but I will ask Your Honours to keep it before

you for a moment.

Again, when one looks through that, taking that

simply as an example of contemporary usage of the

term "State banking" - and Your Honours will see the

report itself is headed "State Banking, Royal

Commission on State Banking" - when one reads through

it, it is clearly established that there is to be

a relationship between the Government and the bank,
one of the things that is stressed is the desirability

for a degree of independence between the executive government and the management of the bank to avoid

the unfortunate practice which had apparently prevailed

in Victoria, and probably other colonies, of colonial

governments making use of monies on deposit with

State banks and treating them rather as monies available

for use as revenue and forgetting, of course, that

they were simply monies on deposit and monies that

could be called upon for repayment at any time.

So there is nothing in that report, as an

illustration of contemporary usage, that the narrower

concept was the understanding and at the back of that

book, Your Honours, we have included the SOUTH

AUSTRALIAN STATE ADVANCES ACT 1895 which, I think, was

probably the first statute setting up a State bank
and the constitution of the bank is dealt with in
Part II,Establishment and Management of the Bank.

But again, one sees there that while, in section 9:

The Bank shall be managed by a board consisting

of five trustees -

that the trustees held "office during good behaviour"

and while they could be suspended "for incapacity

or misbehaviour" - that is section 11 - there does not

seem to be anything in there again suggesting close

control by the Crown over the business of the bank.

(Continued on page 88)

ClT57/2/LW	87	6/3/90
Bourke(2)
MR DOYLE (continuing):	So once again if that is	a fair

example of contemporary usage, i~ does not suggest

that State bank had the narrower meaning and the

statutes to which my learned friend for the

appellant referred this morning, again, in mx

submission, on a quick perusal, do not seem to

support that narrower view of State belt.king.	So
we submit that if the Court does decide to deal

with that issue, it should not accede to the

suggestion by the Solicitor for the Commonwealth.

The second point, Your Honours we \<lOUlci. seek to

make is this in relation to the argument that if a

State bank does engage in banking activity beyond

the boundaries of the State, that it then becomes

wholly subject to Commonwealth control. In our

respectful submission, the exclusion of State banking

from the power given to the Commonwealth does not

appear to have been in any sense a casual or formal

thing, some, as it were, formal recognition of the
position of States. In our submission, the material

again suggests quite strongly that State banks were

seen as performing quite an important function, if

I can say loosely, at the behest of the State

government or on behalf of the State government.

And if that proposition is accepted and if it is also

accepted that even at the end of the last century it

was not uncommon for banks to conduct business in more

than one State, it would be very surprising then if

that important function were being pursued by State

banks. It would be very surprising if then the

immunity was totally lost by the mere accident of them

conducting some business outside the State. Now that

is not to suggest that one can directly interpret the

provision on that basis but,in my submission, a proper

understanding of the subject-matter, namely, what

State banks were doing and why they were excepted

from Commonwealth control, suggests very strongly that

it would not have been envisaged and not intended that

control merely by doing what was relatively common for a State bank would have become subject to Commonwealth

banks even then, namely, transacting some business

outside the relevant State.

Just on that point,Your Honours, that State banks

were seen as performing important functions in the
interests of the State government, could I refer again

to the Victorian report and I do not suggest, of course,

that this is, as it were, defin,itive of what State

banks could do, but I would just like to run through

it to indicate the things that are highlighted in the

report, and in my submission that supports the view
that the exclusion of State banking was for a

substantial policy reason, not, as I said, some kind

of relatively formal gesture towards the independence

of States.

CITS8/l/CM	88	6/3/90
Bourke(2)

At page 6 of the report there is a reference to
the amalgamation of savings banks and it deals with

both the post office savings bank and other banks.

The top of the next page, on this independ@nce point,

in the very first paragraph the point is made that

the connnissioners in the past have been connoc~ed with

other financial institutions and that~they should

not be so connected. Under "Administration" and.

I will not read from it in any detail, but again the

suggestion seems to be there that the governor of the State bank or the connnissioners should have a

significant degree of independence.

Your Honours will note about 6 lines from the

bottom the proposal here is that:

. .

the profits that might be earned by the Bank -

should be applied -

towards the reduction of the Public Debt,

and an incentive to use the institution for

political purposes by any Government would

therefore be removed.

Over the page under "Savings Department", it was

clearly seen as a highly desirable thing for the

State government to offer to the people of the State

a safe place for their moneys and that had been the

traditional functions of savings banks.

(Continued on page 90)

CITS8/2/CM	89	MR DOYLE, QC	6/3/90
Bourke(Z)

MR DOYLE (continuing):  Under the heading ''Issue Department",

the second paragraph, the recommendation is made

that the State Bank be the exclusive bank of

issue in the colony. And so, again, while not

all State banks have had that function and, indeed,

Federation put an end to that, they were seen •.

as potentially playing an important roJe in relation

to legal tender. '

On the next page, Your Honours, is a section

headed "Land Mortgage Department" and it is rather

lengthy and there is no particular line or two

that summarizes it but what clearly emerges from

a reading of that is that it had been difficult

for people developing land in the various colonies

to obtain access to funds on a long-term basis

and at appropriate rates of interest and the

State Bank was seen as performing a very important

function in making available a facility not already
available generally in the colonies.

Going over to page xii, Your Honours, under "Banking Credit", in the first paragraph, the

point is made that those who generally controlled

the banks in the colonies were a relatively limited

group and in the second sentence of that paragraph:

The power thus held by these institutions

provided that their financial claims obtain

paramount consideration over the producing,

manufacturing, and trading interests of the colony, thus inverting the order of

things which should obtain to promote the
welfare of the whole community.

So this bank was seen as clearly performing not a commercial role but a role directed towards

the development of the colony.

On the next page, page x111, immediately

above the heading, the last paragraph: The establishment of a State Bank -

was seen as producing the benefit of a general

lowering in interest rates. On the next page,

reference to the management of the "Government

Account" and so handling of moneys of the State

g.overnment.

I think, Your Honours, they are the only

things I need pick out. But my submission is

that when one looks through them one can see

why the State Bank would have been seen as an

important institution within the colony and of

importance to the government.

C1T59/1/ND	90	6/3/90
Bourke(2)

Again, on that same theme, could I just

invite Your Honours' attention again to the

South Australian Act, section (2), when we look

at the objects of that Act, stressing how it

was seen as an instrument of development of the

colony. Section 2(4) where the prime object~.

is:

the making of State advances .. ~· .to farmers

and other producers -

then -

to local authorities, and in aid of industries,

at reasonable rates, on convenient terms,

and upon proper securities -

and there is a little more said on that in

section 40 - - -

MASON CJ:  What section?

MR DOYLE:· 40 - where we find that:

State advances may be made by the Bank

out of the State Advances Fund to farmers

and other producers, to local authorities,
and in aid of industries.

But, as to local authorities, we find, if you

look at section 45 that they can only be made

for:

purchasing, constructing, or otherwise

acquiring bridges -

et cetera. So, again, that clear emphasis on

using the money for development within the State.

(Continued on page 92)

ClT59/2/ND	91	6/3/90
Bourke(2)

MR DOYLE (continuing): And, Your Honours, farmers and other

producers who are referred to in section 41(1), just

to highlight this point, were actually defined in

section 4 and defined to mean 'farmers, graziers

and persons engaged in agricultural, horticultural

or pastoral pursuits'.', so, in my submission, tl,a.t

clear emphasis on the role of the Stat~ Bank in

advancing the development of the colony. So,

Your Honours, if one understands that-is being why

State banks were seen as importan4 one can understand
very readily, in my submission, why it would have

been seen as essential that they be free from

Commonwealth control because they would have been seen

as, in that sense, arms of the State government. In

our submission, the point which we seek to make here

is supported by the fact that it is almost certainly

the case that the impulse or the reason for the

Commonwealth being given power in relation to banking was the crisis of 1893 and the need which was seen

very clearly at that time for uniform regulation of

banks and so the real origin of the power, in our

submission, was really ensuing stability and a uniformed

system of control. That, in our submission, would have

seernedall the less necessary in relation to State banks

which were, in the end, guaranteed by the States and

therefore not likely to put funds at risk in the same way

as the private banks.

Your Honours, just one other point in relation

to the role of banks. We have referred in paragraph 5

of the outline to a book by Mr Teare, which is also
in the materials. Could I just give Your Honours some

page references where, again, the author, while writing

in 1926, is describing the roles of the banks and, in

my submission, these again show the way in which at

that time not long after Federation the role of State

banks was seen·:· page 45 where he refers to encouraging

thrift in the· population; page 46 he refers to the
use of funds for development or funds that is held by

the Bank being available for development within the

State; and pages 47 and 52 where he refers to the use

of State Bank funds for lending on land, those lending	to people who are developing the land. Finally,
Your Honours, on this same po.int, although perhaps of less
significance because it is a more recent work: the Australian ,Encyclopaedia which is in the materials -
the reference to banking. We have photocopied some pages there but at page 414, column 1 appears what we submit is perhaps not a complete but for relevant
purposes a useful sumnary of State oanks and the text
says at the bottom of column 1 on page 414:

A more limited role in the banking structure is

performed by a number of State banks, created

ClT60/l/JL	92	6/3/90
Bourke(2)

and guaranteed ..... These banks were

established to promote land settlement

and rural development by providing long-term

loans on conditions beyond the scope of

commercial institutions.

And that just perhaps crystallizes the point which we

seek to make.

So, it is on that basis that we make the

submission in paragraph 8 that it would be very

surprising, in the light of all that, if State

banking became subject to Commonwealth control merely
because some business was done beyond the limits of

the ~olony.

The second point or submission we mak~ Your Honour& is a ·textual one. If one looks at the

form of this power when it left the convention -

the relevant part was in the form set out in

paragraph 9 of our submission Your Honours can

actually find that in the book we have prepared in

relation to the convention debates. The very

last page of that book - it is set out there as

paragraph 13.

(Continued.on page 94)

C1T60/2/JL	93	6/3/90
Bourke(2)

MR DOYLE (continuing): The power in relation to insurance

was in the same form at that stage, insurance

other than State insurance.

In our submission, it may well be that the change in the expression of the exclusions in·· both those powers was with a view tot~~ very

point that is made here. As it originally stood,

it could well have been said that the only exclusion

from the Commonwealth power was a limited

exclusion and that once a bank or once activity

ceased to fit the limited exclusion, then the

whole thing came within the power and, in our

submission, it may well be that the form

ultimately adopted in the bill and as it now

stands was an attempt - perhaps not a completely
successful one as events have demonstrated - to

make it clear that the exclusion from Commonwealth

power was not a very limited exclusion which was

lost in toto once the State banking ceased to

match the relevant description.

Your Honours, finally could we address some

submissions to the relationship between section Sl(xiii)

and Sl(xx). We have referred to the cases in

paragraph 11 and I will not spend any time on them.

Your Honour Justice Brennan this morning adverted

to three possible approaches to section Sl(xiii).

Our submission is that, in fact, there are

probably a number of others. Your Honour referred

to, first of all, the possibility that the exclusion

created a kind of legal Alsatia and I took

Your Honour to mean that, on that view, State

banks would not ever be subject to any Commonwealth

law and that is not a view which we would advance.

BRENNAN J: State banking.

MR DOYLE:	State banking, thank you. The next possibility
was, Your Honour suggested, that the exclusion
operated solely by reference to that particular
power; in other words, that that power was
limited but presumably that no limitation was
to be put upon any other Commonwealth power by
reason of that.
Now, that is a view which we would urge should not be accepted for reasons which I will develop
in a moment but in a nutshell, in our submission, that is to treat the exclusion as merely part of
the definition of the grant of power and to ignore the clear flavour which it has of an
affirmative exclusion as distinct from a mere
definition of what is given.

Then, Your Honour's third view is or the

third possibility Your Honour advanced was that

C1T61/l/SH	94	6/3/90
Bourke(2)

it was indeed merely part of the definition of

the power and, in our submission, views 2 and

3 are one and the same unless one, in relation

to view 2, takes a further step which the
Solicitor-General for the Commonwealth appear~d

to take and so I am not sure whether this is ·

really what Your Honour had in mind by ~r.umber 2

or yet another version. As I understood him,

he said that if you could characterize a law as
a law with respect to banking, then it could

not have a valid application to State banking

even i f the law could be ch a r act er i zed by reference

to some other head of Commonwealth power.	Now,
that is to do a little more because that is
to say, "Well, if it is a law as to banking, it is caught by the exclusion even though if

we, for the moment, forgot that paragraph (xiii)

existed, this law could be supported under one

of the other paragraphs of section 51.

That, I acknowledge, is a possible view

but, in our respectful submission, first of

all, it is an unusual approach to take because

usually in characterization if you can characterize

a law as falling under one head of power, it

matters not for most purposes whether you can

characterize it as falling under another head

of power. So, it is an unusual approach to

take although obviously we are dealing with

an unusual problem.

(Continued on page 96)

C1T61/2/SH	95	6/3/90
Bourke(2)

MR DOYLE (continuing):  But in our respectful submission, it

may be that the better approach to take is one which

sees a particular and, perhaps, unique relationship

between section 5l(xiii) and section 5l(xx) and what

we would suggest to the Court is this, and it is

really in two parts: that first of all the exclJJsion

of State banking is to be seen as some kind of,·

query what, removal of an area of acti~i~y from
Connnonwealth power, but not from Connnonwealth power

completely, and that the reason why one may have to

take a particular approach in relation to section 5l(xx)

is that because any banking corporation, md that would

be the usual way of conducting banking in Australia -

other forms were not unknown but were very rare - because

treating section 5l(xx) as embracing a corporation

conducting State banking has the potential to

eliminate or obliterate the exclusion of State banking,

for that reason, and for that reason along, one reads
section 5l(xx) as subject to an implied limitation,

namely that in that provision "financial corporation"

is not to include a banking corporation conducting

State banking.

On that approach one would not read any

limitation into the other heads of power by reference to what one finds in section 5l(xiii). One would say the other heads of power can be exercised in the

ordinary way, and laws made pursuant to them can
apply to a State bank, but because of the special

position, if I can put it that way, of section 5l(xx)

one reads it, and only it, as subject to this quite

specific limitation. Now, if one says why should one

do so, in my submission, the reason is that history and ordinary textual construction and the subject- matter of 5l(xiii) all combine to suggest that those

words, other than State banking, were much more than

a mere matter of definition; that they were intended to

reserve to the States an area of control, but it would

be going too far to then move to the legal Alsatia

and say the intention was to put this area of activity

completely outside Commonwealth power. That does not

make sense, we do not suggest it does.

And the way of, as a matter of ordinary approach

to construction, the way of making sense of all that

then is to have the particular impact suggested on

section 5l(xx) because of its particular potential

to make nonsense, if I can put it that way, of the

exclusion.

BRENNEN J: Is there some difference between that approach and

the approach which says, if it has a character which

falls under two or more heads of power, including (xiii),

then the qualification in (xiii) operates?

MR DOYLE:  Your Honour, I am not sure that in the final practical

analysis there would be any difference, and it is

ClT62/l/FK	96	6/3/90
Bourke(2)

difficult, obviously, to think up all conceivable

situations that might occur, and so I cannot say

that in the end it would be different. But -

BRENNEN J: The problem with the approach that you just

outlined is that it picks up a qualification on an

activities power and transfers it into a modification

of a person's power. ~

-

MR DOYLE:  Yes. I fully see that, Your Honour, but, in our

submission, it is proper in the approach to the

CONSTITUTION to consider the significance, in particular, of the subject-matter here, and while we

have a subject-matter which is in (xiii) characterized

by reference to an activity, we also know certain

things from contemporary events about the way in which
that activity was conducted, and, in my submission

it is a quite natural approach to construction to say

that that then must have a particular impact on the

construction of Sl(xx) even though it is expressed in

terms of entities not activities.

(Continued on page 98)

ClT62/2/FK	97	6/3/90
Bourke(2)

MR DOYLE	(continuing): It is a matter of reconciling them
in a practical way but reconciling them,in our submission,in a way consistent with the usual
approach that if a law can be characterized as
falling under a particular head of power then;,.·.
so be it and one can resort to that head of power. Your Honours,that, in our submis&ion,is a ~
workable approach to section Sl(xx) and in putting that I have not addressed the issue of whether the
exclusion from Sl(xx) is banking corporations or
merely banking corporations conducting State banking. And I put no submission as to that simply because,
issue and it is also difficult to see how, from the
for our purposes, we do not need to address that ever matter as to laws as to banking generally,
whether one sourced them to section Sl(xiii) or
Sl(xx). It may be that perhaps Your Honours will confound me and immediately come up with an example where it would matter which one you sourced it to
but,in our submission,it is extremely unlikely that
as to banking generally it would matter.
McHUGH J:	It is forced on you to some extent in this case, is

it not, by reason of the definition, the first

limb of the definition, because it says:

means a financial corportation within the

meaning of paragraph Sl(xx) of the CONSTITUTION

and I rather understood you almost to concede that

Sl(xx) could include State banking corporations in

some aspects?

MR DOYLE:  No, Your Honour, I did not intend to concede that.

My submission is that you read Sl(xx) as if it had,

at some appropriate point, the words "but not
including a financial corporation which conducts

State banking".

McHUGH J: Yes, but that must by definition include, maybe,

a State banking corporation, just using that as an

identifier, which carries on some other activity.

I have given you the illustration earlier of the

State Bank which carries on a travel business.

MR DOYLE:  In my respectful submission that matter should be

approached by considering whether the bank conducting

the relevant activity - let us say travel - is within

the meaning of Sl(xiii) conducting State banking.

If you decide that it is not, then - and I am not sure

here what would be the best approach - one might either

say the relevant activity falls under Commonwealth

ClT63/l/LW	98	6/3/90
Bourke(2)

control or one may say that the entity is no longer

conducting State banking. That, in our submission,

is how that should be approached.

Your Honours, I do not suggest that our a?proach,

in itself, will not cause difficulties~but in our

submission,the difficulty with the characterization

approach is that it puts a lot of emphasis then

on the issue of characterization and, in particular,
may tend to reduce the exclusion in 5l(xiii) to a

matter of form because a law drawn appropriately to

avoid the characterization as a banking law will then

e.scape the effect of the exclusion, whereas what our

approach does, in our submission, is to produce this

result: that you look at the law, if it is a law

. .	which can be sourced only to 5l(xiii), if it purports
to apply to State banking within the State, well it
cannot. Then you might look to 51(xx) and likewise
you cannot support it by reference to that because,
on our approach, there is this implied limit to
5l(xx). But then if you can source the law to any
other head of power then it will be valid.

And so, in our submission, it could perhaps be

summarized as an approach by the process of elimination

and avoids putting all the weight on the characterization

approach which is put on it when one says that if it

is characterized as a law with respect to banking,

it is caught by the exclusion, even if it could be

characterized in some other way.

(Continued on page 100)

C1T63/2/LW	99	6/3/90
Bourke(2)

MR DOYLE (continuing): And there are those dangers of

the skillful draftsman simply avoiding a form of

the law that would enable you to characterize it

as one with respect to banking.

DEANE J: What would you say about a corporation which·~nly

carried on State banking, extending b~yond the

limits of the State? ·

MR DOYLE:  The first answer is, I should have thought about

that over lunch, Your Honour - - -

DEANE J:	I think the answer might be that you have to go for
an exclusion of corporations carrying on banking
generally because otherwise textually it just will not add up.

MR DOYLE:  Yes. Your Honour, I have not thought that through

and rather than simply answer off the cuff and

possibly cause further confusion, could I plead

inability to assist Yrn.u- l'Ionour on that...particular point.

Your Honours, we make one other tall-back submission

which does not really arise in this case, but we

make it just to put the overall submission in

context, and that is in paragraph 14 of our outline,

that it may be that a law,which could be sourced to

a power other than Sl(xiii) or Sl(xx), in substance

either amounted to a prohibition of State banking or
a substantial impairment of it, that the law would

be invalid, notwithstanding the fact that it could

be characterized as falling under one of the other

heads of power. Obviously Your Honours will see the
analogy there to the approach in relation to laws

which impair the capacity of a State to function as

such, and while at first sight that may seem to be

drawing a long bow to take that approach here, it

gains some support, in our submission, from the

special recognition given to.State banking in Sl(xiii)

and State insurance in Sl(xiv) and so one might be

able to say that, because of that constitutional

recognition, these functions of sufficient importance

for one to say that there is an implied constitutional

limitation on the Commonwealth power in relation to

those activities. And so I just want to qualify what

I said earlier that once you getpassed Sl(xiii) and (xx) it is plain sailing. We would submit that it may well

be that there is that final limitation on Commonwealth

power. They.are our submissions, if the Court pleases.

MASON CJ:	Thank you, Mr Solicitor. Mr Solicitor for Oueensland.
MR DAVIES:	Your Honours, I propose to confine our submissions

to the relationship between J;iacitum (xiii) and

p lacitum (xx) and in that respect may I adopt the

submissions of our learned friend; the Solicitors-General

for Western Australia and for South Australia.

CIT64/l/CM	100	6/3/90
Bourke(2)

Your Honours, in view of the distinction which some of Your Honours have already drawn between immunity from Commonwealth power and limitation on the banking power, it might appear from our

written outline that we are having something.of an each-way bet. Paragraph 1.1 appears to be?

stated in terms of immunity from powe~ and paragraph 2

seems to be stated in terms of limitation on power.

What we contend for, although perhaps we could have expressed it more happily, is something less than the former, but more than the latter. And that really

arises, in our respectful submission, because of the

difference between placitum (xx) and other heads of

power, Because placitum (xx) is a law with respect

to persons, it can authorize laws with respect to

all the activities of those persons. Now our

submission has the consequence that placitum (xx) does

not apply to banks.

(Continued on page 102)

CIT64/2/CM	101	MR DAVIES , QC	6/3/90
Bourke(Z)

MR DAVIES (continuing): Placitum(xiii), on its face, deals

with banking and banks, including incorporation,

and it is sufficient, in that respect, to

authorize laws with respect to activities which

would also be authorized under placitum (xx).'~.

Now, up to that point, of course, 'l\.ne just

has two heads of power authorizing si~ilar

activities, but given that placitum (xiii)

confers that power with a limitation and that

placitum (xx) covers, without a limitation, the

whole of the same ground, in our respectful

submission, it must be construed with the same

limitation otherwise, in our respectful submission,

the limitation in placitum (xiii) is nullified.

That can only be effective, in our respectful submission, if it is construed as not to apply to

banks or banking and that is, indeed, the way in

which a number of the Justices in the BANK's case

construed it.

Can I give Your Honours th~ page referen9es without taking You.r Honours· to it:_ page 204, in the

judgment of the Chief Justice; 256 in the judgments

of Justices Rich and Williams and 304 in the judgment
of Mr Justice Starke. It may be that in most

cases,construi.ng in that way, is little different

from the second way in which Your Honour Justice Brennan
put i.t, as a limitation on the banking power, but on

the other· hand it may be that a law with respect to

the financial activities, the financial corporations

generally, c·ould nullify the exception in placitum (xiii)

and yet, not necessarily, to, characterize the law

with respect to banking.

In our respectful submission, without that

restriction placitum (xx) would cover all of the
same ground as placitum (xiii) without the limitation
and therefore it should be construed with that
limitation. They are our submissio~may it please

the Court.

MASCON CJ: Thank you Mr Solicitor. Mr Spigelman.
MR SPIGELMAN:	Your Honours, there are only three matters

I wish to deal with. The first is the reference that

the Solicitor-General for New South Wales made in

his submission to the operation of the State Bank in

Queensland as well as the Australian Capital Territory.

The agreed facts in the cause removal book only

refer to the Australian Capital Territory. I just

think the Court ought to note that because it is not

in the documents before the Court.

The second matter involves the questions asked,

particularly by Justice Deane of the Solicitor-General

ClT65/l/JL	102
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for New South Wales and of the Commonwealth as to
the meaning of the definition of "financial

corporation" and as to the purpose of the amendments

when they came in 1977.

..

At one point Your Honour aske~and I think

this was to· the Solicitor-General fot' the

Commonwealth, "Did not the	draftsman think that
placitum (xx) did not extend to banks?".	We
would answer that differently and say	1t'hat the
draftman	.. thought that placitum (xx) might not
extend to banks and he had	good reason to

have that suspicion because not only were there a
number of statements in this Court to that effect in
the BANK NATIONALIZATION case, there were similar
references picked up in the CONCRETE PIPES case.

The purpose of the amendments in 1977 may have been - and I only say this,"may have been' because I

tread warily in an area that the Solicitor-General

for the Commonweal th said he had no idea about - but

matters which may have had the effect that banks, not for the assistance of the Court there were two operation of section 52 and 52A and other provisions.

(Continued on page 104)

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MR SPIGELMAN (continuing):· The first was - if it be correct -

that this Court would uphold the view that

placitum (xx) simply did not speak to banks by

reason of the construction point. That would
exclude all banks, not just State banks but

trading banks, from the operation of the

TRADE PRACTICES ACT.

When the further reference was made to banking, the business of banking, it may very well

have crossed the draftsman's mind that that will
not necessarily be read down by the application
of 15A; that is to say that this Court may not

exclude State banking from the scope of banking

and that the result would be, if it is not

severable in that sense or read down in that

sense, that all banks were totally excluded from

the operation of the TRADE PRACTICES ACT.

The fact that the draftsman may have some

reason to be cautious about this matter is
reflected in the actual decision in the CONCRETE

PIPES case where the Court differed 5-2 on the

very question of whether that provision there

in question could be read down and the one thing

that any draftsman of this legislation would have

had before him would be the CONCRETE PIPES case.

The Act there in question, of course, was the

predecessor to this, the 1965 TRADE PRACTICES ACT,
but there were different opinions expressed in

this Court as to whether 15A could apply to

that Act. The draftsman may very well have

thought that he had put that matter beyond doubt
by the addition of the references to State

banking.

McHUGH J: But can I just follow that through? It is your

submission that "financial corporation" includes

every banking corporation including State banking

corporations.

MR SPIGELMAN:  That is so.

(Continued on page 105)

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McHUGH J:  Well, if that is the meaning of the first limb,

what did the draftsman have in mind then - and if
that was what he intendea but was doubtful about

it - what did he have in mind with his exclusion

in the second limb? ,,.

MR SPIGELMAN:  To cover the prospect that by reas.pn of two

matters being upheld in this Court; first, that in

accordance with the views expressed in-the

BANK NATIONALIZATION case, placitum (xx) simply

did not speak to banks of any kind.	That might have
been the case.	He wished, nevertheless, to ensure

that banks were covered to the full extent of

Commonwealth power.

When he got to the next stage, the question

is one of whether this Court would read down a simple

to done that in accordance with the

reference banking by excluding State banking. probably have

decisions of the Court but it is a subject-matter

about which the Court has differed in this very

area", and he simply wished to put it beyond doubt.

Now that, at least, is an explanation for the inclusion of the words.

DEANE J:  That would mean, on one approach, at the end of

the day the case turned on a very narrow question,

namely, whether the words following "includes" are
effectively restrictive of what went before or

whether they take out and put in a special category

what would otherwise be in what went before. If

they are restrictive of what went before, it would
lead to one result of characterization. If they

take out and put within a special category, it

would lead to another.

(Continued on page 106)

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MR SPIGELMAN:  There is a third and the construction for

which we contend is that as shown more clearly in

section 6 the draftsman was simply concerned to

ensure that he covered as wide a field as he could.

McHUGH J:  But the second limb must be restricted, mus~it not,

because, on your argument, the first l~~b must cover

a State banking corporation even if it does not cover

it in respect of its State banking activities?

MR SPIGELMAN:  On our argument it covers it in respect of its

State banking activities and the second limb is not

restrictive; it is simply designed to expand and

that is where the word "includes" bears its natural

meaning, that is meant to expand it. Sometimes the

'	word "includes" is construed to mean that what follows
is, in some manner, exhaustive of the general
characterization. No one would say that about the
TRADE PRACTICES ACT.

McHUGH J:	What about the words in parentheses?
MR SPIGELMAN:	The exclusion?
McHUGH J:	The exclusion.
MR SPIGELMAN:	Well, I have proffered my only explanation for

why they are in there; that is to say it was designed to avert the possibility, as was shown in the CONCRETE

PIPE's case, of the Court differing in its application

of section 15A. Our submission is that "financial

corporation' within the meaning - in the first leg,

yes, "financial corporation" within the meaning of placitum (xx) means its full meaning in accordance with the constitutional or, as then, still

developing in this Court.

The concession that my learned friend, the

Solicitor-General for the Commonwealt~ made that if

it can be characterized as a law with respect to

banking it is therefore struck down as not one we made

and not one we would embrace, that brings back dual
characterization by the back door.	We submit that it

is inconsistent with the decisions of this Court on

that matter. In our outline of submissions I quoted

from Your Honour the Chief Justice's decision at

page 151 in the DAM's case and I stopped quoting

in our written submissions a little early.

(Continued on page 107)

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MR SPIGELMAN (continuing):  I included in our submissions the

following: it is now well settled that a law upon a

cease to be valid because it touches or affects a	subject-matter within Commonwealth power does not
topic outside Commonwealth power. I stopped there.
I should have gone on, all because it can be ~
characterized as a law upon a topic outsude power.
And we submit that Your Honours would apply that and
that, in the instant case, reject what- I understood to
be a concession on the part of the Commonwealth from the point of view of the Commonwealth;my client makes no such concession.

If the Court pleases, they are our submissions.

MASON CJ: Thank you, Mr Spigelman. The Court will consider

its decision in this case.

AT 3.50 PM THE MATTER WAS ADJOURNED SINE DIE

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