Butterworth v Commonwealth Bank of Australia

Frederick Butterworth, a foreman, brought an action in the High Court against the Commonwealth Bank of Australia and its Governor, Denison Miller, seeking to recover penalties under the *Banks and Currency Act 1915* (Vict.). The plaintiff alleged that the defendants had failed to prepare and deliver quarterly statements to the Chief Secretary of Victoria as required by section 5 of the Victorian Act. The defendants demurred to the statement of claim.

The central legal issue before the High Court was whether the *Banks and Currency Act 1915* (Vict.) applied to the Commonwealth Bank of Australia and its Governor, thereby rendering them liable for penalties for non-compliance with its reporting provisions. Specifically, the court had to determine if the Commonwealth Bank or its Governor constituted a "company, firm or individual" engaged in the business of banking as defined by section 3 of the Victorian Act, and whether the Commonwealth Bank's operations fell within the scope of that definition, particularly concerning the issuance of bills or notes payable to the bearer on demand.

The High Court, in allowing the demurrer, held that the action would not lie. A majority of the court, comprising Griffith C.J., Barton, Gavan Duffy, and Rich JJ., reasoned that neither the Commonwealth Bank nor its Governor was a "company, firm or individual" within the meaning of section 3 of the *Banks and Currency Act 1915*. Furthermore, they found that the Commonwealth Bank's business did not fall within the Act's definition because the *Commonwealth Bank Act 1911-1914* prohibited it from issuing bills or notes payable to the bearer on demand, a condition precedent for a banking entity to be subject to the Victorian Act. Isaacs J. concurred on the grounds that the Commonwealth Bank Act was valid Commonwealth legislation and that neither the Bank nor its Governor qualified as a "banking company, firm or individual banker" under section 5 of the Victorian Act.

The High Court ordered judgment for the defendants.