The Treasurer has forwarded the following communication from the Governor of the Commonwealth Bank for advice:

I have the honour to hand you herewith, notice of valuation from the City of Brisbane on property purchased in Queen Street for the Commonwealth Bank of Australia; also notice from the City of Sydney for City rate of the premises recently acquired by the Com-monwealth Government for the Commonwealth Bank, and I will be glad if you will kindly get the opinion of the Attorney-General as to whether we are liable to pay same.

In previous opinions given by me⁽¹⁾ I have advised that the Commonwealth Bank is an instrumentality of the Commonwealth and as such is not subject in the exercise of its ordinary functions or in carrying out the purposes for which it was created to any law of a State which would fetter the free exercise of these functions or purposes.

The occupation of land and buildings for bank premises is necessary for effectually carrying out the purposes for which the Bank was created, and the imposition of the condition that such occupation shall be subject to the payment of municipal rates imposed under a law of the State is, in my opinion, a fetter on the free exercise of the functions and powers of the Bank.

In addition to the reason already given, section 114 of the Constitution provides (inter alia) that a State shall not impose any tax on property of any kind belonging to the Commonwealth.

The High Court held in the case of The Municipal Council of Sydney v. The Com-monwealth⁽²⁾ that a corporation had no power to levy rates on property of the Commonwealth.

In my opinion, the property of the Bank, which is an instrumentality of the Com-monwealth, is property of the Commonwealth, and as such, under the authority of the above case, is not liable for municipal rates.

In my opinion, the Commonwealth Bank is not liable to pay municipal rates in re-spect of its property.

[Vol. 11, p. 215]

(1)Opinions Nos. 476,478,504,507.

(2)1 C.L.R. 208.

(3)This opinion is unsigned in the Opinion Book, but it is attributed to Mr Hughes.