(No tHE HIGH COURT OF AUSTRALIA INGLIS AND ANOTHER COMMONVEALTH TRADING BANK OF REASONS FOR JUDGMENT Wt SH/ Judgment delivered at..... SYAM@Y ene Ve "Suit Ve GOMMONVEALTE TRARING BARK OF AUSTRALIA I have before me a summons filed on behalf of the defendant by vhich orders were sought that the statement of claim be struck out on the ground that it does not disclose any reasonable causes of action; that the action be stayed or dismissed on the ground that it was shown by the pleadings to be frivolous or vexatious and that certain specifies paragraphs of the statement of claim be struck out, It was also asked that one of the paragraphs dn the prayers for relief be struck out, and there are applications for an enlarging of the time for delivery of defence and for costs. There is also before me a summons filed on bvebalf of the plaintiffs which raised objections to the @usmons of the defendant to vhich I have just referred. I have heard argument at sone length, first on the plaintiffs' sumons - and at greater length on the Gefenéant's summons, The statement of claim to whieh ebjection is taken is a long document vith many paragraphs in it. In the course of the argument it appeared that the plaintiffs intended it to be the basis of a number of different eanuses of action against the defendant. In my opinion, without going into the details of the matter, the statement of claim is, in some respects, Jacking in clarity and in sone respects is probably epen to more serious objection than thet. However, I have sot made any final decision on the question whether any particular parts of the statement of elaim ought to be struck ont, because I have not heard in full the subsissions which the plaintiff, Mrs. Inglis, wanted to make on behalf of the plaintiffs. However, es the hearing of the sumaons was still proceeding, 2. £% bas now been suggested to me and, indeed, the plaintiffs applied for this, that leave to amend the statenent of clain should be given to the plaintiffs and that no part of the present statement of claim should be struck out and no order should be made on the present summons of the defendant. Counsel for the defendant in response to that has suggested that the present suzmons might be adjourned generally and that leave might be given to the plaintiffs te deliver an amended statement of elain by soue date - he suggested early in February 1970 - and then there wae sone debate about what order as to costs, if any, should now be made. ; It has been made clear by the plaintiffs that they wish to sake some amendments to the statenent of clain and it seems to me that the better course, as a uatter of convenience, and, I hope, as a means of effeeting the saving of time and of money, would be to give at present no final decisions on the defendant's sumnons, but to adopt the eourse of standing it over generally, That is a course which I think may render it unnecessary ever to give final decisions on the matters raised by the present sumons, because if there is an amended statement of claim many of the subsissions that have been made to me may then appear immaterial by reason of the amended statement of claim, and if the defendant should wish, after the anended statement of claim has been delivered, to raise objections similar to those now raised, to that amended statement of claim or some parts of its 1t will be, of course, open to the defendent to do so, if 1t 18 so advised; and that matter can then be dealt with by reference to the amended statement of clain. I think it is better for me not to express oven in a tentative way the conelusions that I might have reached if the susmons had been fully heard, But I think it 1s permissible and proper for ma to say that I do think te GRABIAMs } BQWOGHK a 3e that the present statement of claim dees contain some matters which are unnecessary in such a pleading end are matters of evidence rather than statement: of fects; and that whoever is undertaking the task of dyafting an amended statement of claim should have in mind the need to confine the allegations to those whieh are material and those which are proper to be inserted, having regard to the rules of Court, I realise, as indeed, I think, was mentioned by Mra. Inglis in her submissions, that the task of discriminating between a statement of material faet on the one hand and a statement of evidentiary aatter on the other hand is not always an easy task, but 18 is one which should be undertaken nevertheless so that the pleadings are not encumbered by unnecessary matter and so that the pleading does conform to the yules of Court. X am Gisposed to make an order standing over generally both the present sumsonses, I have not made any forwal order yet on the plaintiffs' eumons, nor do I propose te do so ta-day. I propose to give leave to amend. I would suggest that instead of the date, the 17th February, which was proposed to me by the plaintiffs, the date specified should be a little earlicr than that, I would hear Hrs. Inglis further on this, if she wishes to be heard. I would suggest 10th February as the date for the delivery of the anended statement of claim. It is now indicated to me that the plaintiffs do not object to that. Om the summons of the defendant taken out en 26th Hovenber 1969, I make no order at present and I adjourn the hearing of the summons sine die, It may be restored to the list if and when that becomes necessary. Would your Honour direct that it might be restored on two days' notice? On two days' notice, yes. I give leave to the plaintiffs to deliver an MRSe IRGLIBs HXs HONOURS MRe GRAHAM? Lt amended statement of elaim which is to be filed and served not later than 10th February 1976. Your Honour, would that mean that the two days! notice would be given before 10th February? 'The defendant does not propose to give two daya' notice before the 10th Pebruarye Thank you. I will make that clear. The amended statement of elain is to be filed and served not later than 10th February 1970, and no application is to be made te restore the sumone te the list prior to that date. I resorve the question of the costs of the f@ummoms and all questions relating to costs, including the question whether there should be a certificate under Order 71, rule 62, which I have been asked to grant. I think it net appropriate to grant a certificate at a stage when I have not yet determined what order for costs sought to be made, but it will be on record that that application for a certificate vas nade. In relation to the summons filed on behalf of the plaintiffs on 3¢4 December 1969, I make no order at present except that that summons also be stood over sine die and that it also may be restored on two days* notice by either party, but such notice is not to be given earlier than 10th February 1970, I make no oréer at present as to the costs of that susmons, but I reserve the costs for further consideration. Does that complete all the formal orders that the parties think desirable to carry out what I wish to do? Yes, your Honour, I think that perhaps there was m misunderstanding about what the certifieste was concerned withe It does not carry all the cests of counsels it only oarriies the questions of vhether the solieitor should attend or wiasther eounsel should attend, HIs HONOURS MR. GRAHAM! His HONOURS MR. GRAHAMs HIS HONOUR: MR. GHAHAMS HIS HONOUKs 5e Yes. whether it was a proper case for counsel to attend. Yes. It does not carry my costs as Melbourne counsel, It leaves aside as a separate question what Is the proper fee for counsel, in which question I suppose is Sneluded the question whether {t should have been Sydney eounsel or Helbourne counsel. That is so. It is quite clear, your Honour, This is only to decide whether or not any counsel should attend and of course it is important from the point of view of wy instructing solicitors as well, having engaged counsel vised-vis their client. Quite so. Do you press that it must be done now? Ro, your Honour. I only wish to place on reoord in case there be any misunderstanding of the effect of the certificate. Yes, Very vell. That completes the present bearing of these summonses. I shall adjourn now. The appellants issued out of this court 4 writ addressed to the respondent as the "Conmonveslth Trading @ack of australia, a person being sued on behalf of the Commonwealth". 4m applisation by suumsong at chambers was thereupon made te a Justice to strike the writ cut apon the ground that the respondent "fe net a person capable of being sted on behalf of the Commonwealth", the implication being that the setion was not within the jurisdiction of the Seart, whether the procedure was correct i do aot atay to woasiders The apphicetion succeeded, and this appeal ts from the order striking oat the-writ. The specification in the weit of the forms of relief which the appellante seek suggests that the matter of complaint avese out ef eondust of the respondent or ef persons for whose ests it 4e responsible in the carrying on of its tanking business, The sole question for gecielon an the appeal ia whether an action against the respondent in respect of qompleints of thet character is within the opiginal jurisdietion conferred upon this Court by se 79(411) | of the Constitution "tn all matters in' wateh the Comnonwosith, | oF 4 person euing or being sued en behalf of the Comeonwealth, fe @ party". The purpose and effect of including ia the eonetitutionl: provision zatters tn which "a person suing or being sued on behalf of the Commonwealth is a party" were | exzemined in the judguents of Bich and Williams 37,, Sterke J, and Dison J. in the Renking ease, Sagk-of Bey south wiles vy 'The Conmonvealth (1968) 76 G.L.%, 1, and their fionours were | of one mind on the question, Av Dixon J. observed (at pe 363), there is the strongest presumption that in using the quoted expression the framers of the Constitution were aot coneerned | whth the Attorney-General or any other officer by or through i Re whom the Crown might come or be brought into court. His Honour went ois "What they were concerned with was auenability to the Juriediction of persons tn whom causes af action vere vested, OF against whom causes of action lay, but in their official capacity only ad as agencles or esanations of the Commonwventth," The aonelusion of ali four Justices may be stited in one fubtiior sentence from his Honour's Jadguent (88 pe 367): "At al} events, the purpose of providing a Jupisdietion witch may be invoked by or againet the 'Gomonvealth eould not, tn nodera tines, ve adequately attained and seaured against eolouratle evasion, unlese it was expressed a0 aa to cover the énforedndnt 'of actionable rights and Liabilities of officers and agencies in their sffielal and governmental eapagity, when in subitance they formed part of or sesresented the Commbceenh the? ALi four Justices considered that the Coumemwealth Bank of Australia ae constituted by the Commonwealth Bank Aet U9¥5 (Fed,) vas a corporate agency oF instrumentality of the Cousonweslth to perfor the fusetions assigned to it by that Act and any other Act, and that acoérdingly an action against at "tn respect of the performance of these functioné was within #. 751i) of the Constitution, Ag Ri¢h and Dizén 33. observed (at pe 27%), the Bank could" bé idm agent of the Coumonwealth (in the relevant sense) "yhether dy not tt Ls performing governmental funetions io" the atviet sense, heir Honours went on to aay that the absence of any sorporators pointed to "en intention on behalf of the Cémmonwealth to transiute a part of itself into the catvard fore of @ corporation as a eonvenidnt sears "of oarrying on a Commdnvealth sebivity™. " the functions of the Coumonveslth Bank of australia as 18 then exiuted do not nov reside in any one decide the question before usy bat it would of course be a mistake to apsume that because the respondent in thie appeal ie eoterlished for more Limited purposes than those of the former Coasonwealth Bank of Australia 1t does not possess the ehapacter of "9 convenient means of carrying on « Coauénwealth activity". the decisive question 'is not whether the aetivities and functions with with the respondent 19 endoved ave traditionally govermiental in charactor, though their possession of a traditional or generally accepted gévernnental ahavester aay woll help in the ascortainnent'of the legislative from. the. provisions: relating to the respendest in the relevant statute: is. kt, on the one bent, an intention that' the Commenwealth shell operate in a parti¢ilar field through &@ enrporation created for the purpose; or ia it, oa the other hané,-an intention to pat tate the field a eorporation to perform ite functions independeatly of the Coamonvealth, that 1s to say ethesvite than'as's Comerwéaith instrument, — G0:that the concept of « Conmgaweatth dativity cannot" mealistieslly be applied to thet viteh the corpération dean? I do not think {t te helpful to Lise these features of the Gemenwalth Hank det 1945 to which reference was made in the Banting cate end'gee Wist a 4iffercnce fe © nade hy striking off the featdres not 'now to be found fa the Jegtolation governing the redpondeat. "The ently point ts be nade. from a coupariven between the legislation in fores th 1968 and the legislation now in fored ix, I think, that the functions whieh in 1948 belonged to @ single eerporation, under provisions whlch aheved'an intention thet thease fandtions were to be in reality fengtions of the Cokmonvealth perforved through the msehinery of a single' eorpobatton created for te purpese, are mov divided: bitwsen' tee cetparattonsy the ae hb. 1 Reserve Back of duatralia and the respondent, the Counenwealth Trading Benx of auatraliae It yould not be unnatural to expeat to fied thet oe 8 regul$ there were two Commonwealth agaocies in the plage of only anes | Waot happened in 1999 was that in addition to | the biving off of the Commonwealth Trading Bonk of sustvalia froa the former Commonwealth Bank of Australia and the renaming of the labter as the Reserve Bank of australia, two additio;al corporations were oreated for special purposes, ond the Counomvealth Savings Sank of australia, a corporation creates by the Commonwealth Bank (Savings Bank) Act 1527 (Fed.) to carry on the general wusiness of a savings bank, wan preserved in existence, Thus there are now five care porationsgs — (1) the Reserve Bank of Australia which, wider the provisions of the Reserve Bank Act 199961965, is the central bank of Australing manages the dustralisn note iemue, bas @ Rural Gredite Departnent, and appoints its om officers te constitute what is called the Keserve Bank Service; (2) the Goumonwealth Banking Corporation, corporation ereated by the Commonwealth Banks AGt 1999-1966, which has the funetions of appointing officers to constitute the CommonwenLEb Banking Cesporetion Service, appointing tenporary and casual eaployees, and providing and asking available to the next three corparations to be mentioned *gueh officers and employees aa are oegessary for efficiently gondueting the business of each of these banka"y (3) the Commonwealth Yeading Uank of Australia, a coyporation created by the Commonwealth dank Jot 1993). whieh has the function of earrying on general banking business inoluding the general banking tasiness formerly carried on by the 'Gasnonwealth Bonk of sustraling (4) the Comonyealth Savinge Sank of australia, whien has the fanetion of garrying on the general business of a savings bank; and (5) the Counonveaith Developnont Bank of Avetralia, & gorporation erented by She Commonwealth Munks st 1999, Vet Se whieh has the funetion of providing finance for prinary production and fer the establishment or development of induatrial undestakiags. Bone of these corporations has any oorporators, aad I raspectfully agree with Rich and Williams JJ, that that ciroumatence 1s significant as pointing $e a conelusion that the inteation of the Parliament was to give the Commonwealth "the outward form of a corporation ag @ aonvenient means of carrying on @ Commonwealth activity" (A948) 76 GelsBe 1 at pe B74. It will be aeon that in point of organisation tie three Danke provided for by the Cowmonwealth Sanka Act 1959) the Trading Wank, the Savings Bonk and the Development Rank (to wee the short titles employed in the det), say be wegeréed an the three prongs of a trident. Por the perfovennce of their respective fanctions they all depend upon @ gingle staff which the Banking Corporation appoints te its own service and then distributes anong the throe banks as the agads of their respective businesses require fron time to tine, the only exception is that each bas its om General Manager, but he is appointed by the Governor-General, and acts under tho Managing Dircetor of the Banking Corperation and in accordanes with the polley of the bank and with any,' Gireotions of the Board of the Banking Geporation or of ai executive comittes of thst Board appointed for the relevant banks But there is such more than that. While eoah bank has ite avn Soard, the Beard of the Banking Sorporation has power to deteraine the policy not only of that Corporation itself wut also of the Trading Bank, the Savings Bonk and the Developsent Beck in relation to any matter, and to control not only ite own affairs but also the affaine of these three bauke, In the exercise of theese powers the Board of the Banking Cerperaticn has a general duty to ensure that the policy of the Corporation and the banking policy of each of the three banks "are direated. to the greatest advantage of the peaplo of Australia and have due regard to the stability and balanced developuent af the australian esonony". It ia inatructive to observe that, this etatement of the Seard's duty resgables in character, though 1t is not identical in terns with, the statement of the duty of the Commonwealth Hank of dustvalia in a» 5 of the Commonwealth Bank Act 193, In that 4et the stability of the aurresey of Australia, the enintenance of full euploynent in Australia aad the eqonomle prosperity and welfare.of the people of Australia were specified as purposes to which the enk*s exercise of its pewers should contrinute; and they eontinus te be so specified in s. 1012) of the Reserve Henk Aat 1959. For the three banks dealt with in the Gounonwealth Banke dot 199901966 the sere comprehensive expressicn above quoted is usedy but the intention is set less clear that the policies of tiose banks and the Basking Corporation which staffs them whall be directed wholly and solely te oude which ave of the essence of the central (ise. the federal) goveronent of the countrys é " But the indications of intention ia the Act, by no amons atop there. The Board of the danking Corporation hae mot the final say as to policy, . it is xrequired to iafora the Goverment from time to ties of the banking seliey of the three banke whose policy it determines, anid in the event of a difference of opinion between the Government and the Hoard aa to whether any such policy is directed to the best advantage of the people of Australia and has due regard to the stability and balanced davelopment of the Australian economy the Treasurer of the Coumonwealth and the Joard are to endeavour to reach agreement, and if they cannot the Governor-General, acting with the advies of the Federal Kxequtive Couneii, say hy order determine the policy of the Corporation or any of the thyee banka. 'the policy as a0 detorained must not be inqonsistent with the monetary and anking policy of the Reserve Bank, bat that policy in turn te(oy a 13 of the Reserva Bank Aet) determined in the final resert by the Governer-deneral actiag with the same adviogs. fo all this must be added a fow other econeiderations, the firet concerns the constitution of the Board of the Banking Corporation, As in the case of the Reserve Bank, all the sambers of the Hoard are appointed by the Sovernor~Qeneral, exeept one who is the decaretary to the Department of the Treasury; and all are remunerated as the Governor-General determines, Next, it is true of each of the three banks governed by the Cocnonwealth Banke Agt 1999-1966 as well as of the Keserve Bonk that its eapitel cones wholly from sources within the Commonwealth bank syster or the Commonweslth itself. ach honk must pay to the Bunking Corporation its propertiion of the expenses of the Corporation, ana must pay the other banks for any services rendered by thee, Ite net profite either go back inte the system or are to be paid to the Commonwealth, In the case of the Trading Bank the net profits so dealt with ere ae ascertained after provision for ineome texy and thet bank, alone of the three, is made lisdle to pay Income tax by the provision in a. 24a of the Incose fax Asagsament Act 1936 (inserted by the amending Aet So. 120 of L9G) that the Trading Bank ig aot a public authority for the purposes of #. 23(4) which exempts fron tax the revenue of « public sutherity eonstitauted under an Act. See also o. 119 of the Gonneawealth Banks Act 1959-1966, This inerseses the Commonwealth's participation in the profits, bat. otherwise ite effect seema only to be to ageiailate the yearly financial statements of the Trading Bank to those of the non-governmental banking companies with whieh {¢ le in 8. soupetition. Although at this point a difference oxtats between the Commenwealth Benk Aet as in ferce at the tine of the Zenking case and the present Act, it dees not seem to me te affeat the question we have to ensider. A point that does affect it, however, end seams to me to provide a strong indication of the substentisily government character of the Trading Bank, the two other banks governed by the Commonweslth Banke Act 1999-1966, and the Sanking Corporation that ties all three together in the way I have deseribed, is that @s 120 subjects the ageounts and finenolal records ef alt four bedies te inspection and audit by the amditer-General, | and provides for his reporting to the Treasurer the results | of nis inspection and audit and drawing the Treasurer's attention to any lrregalerity that is of sufficient inportence to justify his doing so, When all these considerations are taken into account, the conclusion geens to me ineviteble that the Trading Bank, the Savings Bonk and the Development Bank are established simply as instruments by wiich the Commonwealth participates in the business of banking. Indeed, with great respeot for the opinion of these who aee the matter differently, I regard the Commonvealth Banka Jot as providing probably as ; clear an exanple a one eould hope to find of the setting ' ap of an integrated systen of government banking through the medium of a cowerdinated group of corporations created ad hogs Of the original Coumonwealth Sank Act 1911 Griffith Ged. gaid in Baiger ve Gooht (1914) 19 Coley 382 at pe 3938 "Probably the true effect of the act is a declaration that the Commonwealth itself may carry on the business of banking under the nage of the 'Coanonweslth Bank of australia'". The Sanking case shows that the statement is true without the word "probably"; and in ay opinion a similar statement may be sade with respect te the provisions of the Commonwealth Ranks Act 1999, substituting for the "Commonwealth Bank of australia" the names of the three banks amongst which that ry &et divides so auch of the basicess of government banking as the Reserve Bank 4gt has not deelared that the Comzonwealth way carry on Under the name of the "Reserve Bank of sustralia®., I eonclade that the respondent in this appeal, the Trading Bank, ta truly to be dexeribed, in terna of the title of its set, as one of "the Commonwealth Banks". when sued ae it is here it is, in my opinion, sted as being the emanation by whieh the Commonwealth operates in the field of goneral banking, and is therefore "ened en behalf of the Commonwealth" in the sense whieh the Bagking case shows to be the true sense of that expression in a, 75(Al1) of the Constitution. For these reasons i would allow the appeals The summons at dhoubers states a8 en additional ground for steizing out the writ that 1t diceloses no cause of action; but thet is net « ground of objection te a writ, The susens tn muy opinion should be dismissed,