English Scottish and Australian Bank Ltd v Commonwealth

The English Scottish and Australian Bank Ltd (ES&A Bank) brought an action against the Commonwealth of Australia concerning the validity of certain regulations made under the *Banking Act 1945* (Cth). The dispute centred on whether these regulations, which imposed restrictions on the ability of banks to conduct certain types of business, were within the scope of the powers conferred by the Act. The matter was heard by the High Court of Australia.

The High Court was required to determine whether the regulations in question were a valid exercise of the power granted to the Governor-General by section 39(1) of the *Banking Act 1945*. Specifically, the court had to consider whether the regulations, which prohibited banks from engaging in certain non-banking business, were for the purpose of securing the effective administration of the Act and whether they were reasonably necessary for that purpose.

The court reasoned that the power under section 39(1) was not unlimited and that regulations made under it must be directed towards the objects of the *Banking Act 1945*, which included the regulation of banking business. The majority found that the regulations went beyond the scope of regulating banking business and intruded into areas of commerce not directly related to banking, thereby exceeding the statutory authority. The legal principle applied was that subordinate legislation must be authorised by the enabling statute and must not be repugnant to or inconsistent with the provisions of that statute.

The High Court held that the regulations were invalid and made an order accordingly.