Case: Australian Independent Distributors Ltd v Winter [1964] HCA 78 ; (1964) 112 CLR 443
Outcome: referred to
In Australian Independent Distributors Ltd v Winter [1964] HCA 78 ; (1964) 112 CLR 443 the High Court was called on to determine whether a friendly society was carrying on "the business of banking" contrary to s 7 of the Act. The Court quoted the passage from the judgment of Isaacs J in Permewan Wright which Rich J had incorporated in his reasons in Melbourne Corporation. The Court treated what Isaacs J had said as constituting a "definition" of the "business of banking" (at 455). The Court continued: "If that definition is applied to the present case, as we think it should be, it is apparent that the second of these essential characteristics is absent. The power to lend money conferred on the Society by Rule 7 was limited to the making of loans to its members to enable them to acquire land or buildings to be used for residential or business and residential purposes and in fact none of the Society's moneys was used for the making of loans for that or any other purpose." The second essential characteristic which was found to be absent was the lending function. The society had not made any loans. For this reason, the Court held that the trial judge had been correct to hold that the society had not carried on the business of banking and had not, therefore, contravened s 7 of the Act. 54 Counsel for Mr Siminton, relying on what was said by Isaacs J in Permewan Wright and by the Full Court in Winter , submitted that Mr Siminton could not be found to have carried on a banking business because the Terra Nova Cache did not make loans on a regular basis. It is true that the evidence disclosed only one loan, albeit a substantial loan made by the Terra Nova Cache under Mr Siminton's direction. It is to be noted, in this context, that the decision in Winter turned on the fact that the society had not loaned members' funds to anybody. In any event, the Court is empowered, by s 65A of the Act, to grant relief where a person is proposing to engage in conduct which would constitute a contravention of s 7. When addressing meetings, at which he solicited deposits, Mr Siminton told those present that, once the Terra Nova Cache was established, loans could be made to citizens of the Principality of Camside. Point 12 on the information sheet which was made available at the meetings and in the Principality of Camside's website under the heading "HM Government of Camside Banking Facilities" advised readers that: "12. It is envisaged that the next stage of Terra Nova Cache's development, once deposits are established, profitably traded and fully precious metal backed, that the bank will be offering interest free loans to its depositors/owners." Even if no regular practice of making loans had been established prior to APRA commencing this proceeding it is clear that Mr Siminton proposed to offer loans to "citizens" of Camside once the Terra Nova Cache had become established. 55 For these reasons I conclude that Mr Siminton was a person who carried on and was proposing to carry on the business of banking in Australia. He had engaged and was proposing to engage in conduct which constituted or would constitute a contravention of s 7 of the Act. 56 Section 66. Section 66(1) of the Act makes it an offence for a person who "carries on a financial business" to use the words "bank" or "banking" in relation to such a business. A "financial business" is defined in s 66(4)(c) to refer to a business that consists of, or includes, the provision of financial services or relates, in whole or part, to the provision of financial services. The term "financial services" is not defined. The words should be accorded their ordinary and natural meaning. They comprehend the provision of services of a financial nature.