Bank of New South Wales v Commonwealth

Bank of New South Wales v The Commonwealth (1948) 76 CLR

Commonwealth Law Reports

The Commonwealth Law Reports are the authorised reports of decisions of the High Court of Australia. The CLR are published by the Lawbook Company, a division of Thomson Reuters....

 1, also known as the Bank Nationalisation Case, is a very famous case of the High Court of Australia

High Court of Australia

The High Court of Australia is the highest court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, has the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the States, and...

.

Comfortable in government after two strong election wins, the Labor government of Ben Chifley announced in 1947 its intention to nationalise private banks in Australia. It achieved this process by passing the Banking Act 1947.

Bank of New South Wales v The Commonwealth (1948) 76 CLR

Commonwealth Law Reports

The Commonwealth Law Reports are the authorised reports of decisions of the High Court of Australia. The CLR are published by the Lawbook Company, a division of Thomson Reuters....

 1, also known as the Bank Nationalisation Case, is a very famous case of the High Court of Australia

High Court of Australia

The High Court of Australia is the highest court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, has the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the States, and...

.

Background

Comfortable in government after two strong election wins, the Labor government of Ben Chifley announced in 1947 its intention to nationalise private banks in Australia. It achieved this process by passing the Banking Act 1947. The policy was that Banks would be purchased by the Commonwealth Bank of Australia, which in turn would be owned by the Federal Government. The policy proved very controversial, and the Bank of New South Wales challenged the constitutional validity of the law.

Decision

The Court hearing lasted for a record 47 days. A number of arguments were put to the Court. The Court rejected most of these arguments. However it eventually decided that the mechanism used to nationalise the banks was not on "just terms" and therefore violated the protections placed into the Constitution in placitum (xxxi).

Aftermath

The case was appealed to the Privy Council. The Chifley Government lost power ostensibly due to the problems regarding this legislation and the Court case.