Heiner v Scott

The case of *Heiner v Scott* concerned an appeal to the High Court of Australia from a decision of a Queensland Court of Petty Sessions. The appellant, Mr Heiner, had been charged under section 26 of the Queensland *Stamp Act 1894* for issuing an unstamped cheque drawn on the Commonwealth Bank of Australia. The magistrate had convicted Mr Heiner, imposing a fine and costs, and ordering payment of the stamp duty. The appeal was brought on the grounds that the *Stamp Act* did not apply to cheques drawn on the Commonwealth Bank, or that if it did, the Act was invalid as it interfered with a federal instrumentality.

The legal issues before the High Court were whether section 26 of the *Stamp Act 1894* (Qld) was enforceable against a private citizen drawing a cheque on the Commonwealth Bank of Australia, and whether the Commonwealth Bank, in conducting its general banking business, was an instrumentality of the Commonwealth such that state taxation on its operations was invalid. The appellant argued that the Bank was a federal instrumentality and that the stamp duty constituted an interference with its operations, rendering the state law inoperative. The respondent, the Inspector of Stamps, contended that the duty was imposed on the customer, not the Bank, and that the Bank's general banking business did not constitute a governmental function exempt from state taxation.

The High Court, in dismissing the appeal, held that the Commonwealth Bank, in carrying on its ordinary private banking business, was not exercising an executive function of the Commonwealth. While the Commonwealth Parliament could create a corporation as an instrumentality for governmental purposes, the ordinary business of banking was not a constitutionally conferred executive function. Therefore, the Bank's operations in this regard did not attract the immunity from state taxation that applies to federal instrumentalities. Furthermore, the Court found that the stamp duty was imposed on the customer drawing the cheque, not on the Bank or its property, and that such a non-discriminatory state law did not unduly fetter or interfere with the operations of a federal instrumentality.

Consequently, the High Court affirmed the decision of the magistrate. The Court ruled that section 26 of the *Stamp Act 1894* (Qld) was valid and enforceable against private citizens drawing cheques on the Commonwealth Bank for their own purposes, and that the Bank's general banking business did not confer immunity from such state taxation.