The following memorandum has been submitted with the request for advice:

The following copy of a letter received from the Deputy Governor, Commonwealth Bank of Australia, Sydney, under date the 1st instant, is forwarded for favour of an opinion:

We have to request that you will be good enough to obtain an opinion in respect of the following point, from the Solicitor-General for the Commonwealth.

The lease of this Bank's Adelaide premises was lodged by the lessor for registration, and the Stamp Commissioner for South Australia has claimed stamp duty and assessed amount payable at £26, and threatens legal action should same be not paid.

We have claimed exemption from State stamp duty on the grounds that the Bank is an instrumentality of the Commonwealth Government, and we shall be glad of the Solicitor-General's opinion in the matter, in view of the High Court's decision in the case of Heiner v. Scott.

It is assumed that the question upon which advice is desired is whether the Commonwealth Bank is liable to pay State stamp duty on a lease taken by the Bank of premises required for Bank purposes.

In the case of Heiner v. Scott 19 C.L.R. 381 referred to in the above memorandum, it was held by Griffith C.J. that the operations of the Bank as between itself and its customers were not the discharge of a function of the executive Government of the Commonwealth within the rule in D'Emden v. Pedder. It was further held that the enforcement of the provisions of the Queensland Stamp Act 1894 in regard to cheques drawn upon the Bank was not an interference with the efficiency of the Bank. This decision was mainly based on the fact that the requirements of the Stamp Act had to be observed by the customers of the Bank and not by the Bank itself.

The circumstances under consideration differ from those of Heiner v. Scott in that the transaction under consideration is not one between a 'customer' and the Bank, and that, if the contention of the State is correct, it is the Bank which is required to pay the stamp duty on the transfer.

In Commonwealth v. State of New South Wales 3 C.L.R. 807 it was held that a transfer to the Commonwealth of land acquired for public purposes was an instrumentality of the Commonwealth and consequently exempt from State taxation.

In the recent case of Commonwealth v. State of New South Wales 24 A.L.R. 253 it was held that, in view of section 23 of the Stamp Duties Act 1898 (N.S.W.), which provides that no unstamped instrument required by the Act to be stamped shall be registered, registration of an unstamped transfer of land from the Commonwealth was rightly refused, and that stamp duty was payable by the transferees. According to the practice of conveyancing in New South Wales stamp duty on a transfer is paid by the transferee but in this instance the Commonwealth had by agreement undertaken to transfer the property free of cost to the transferees and had thereby become liable to pay the stamp duty. It was held that payment by the Commonwealth was made as agent for the transferees.

In Heiner v. Scott the majority of the Court did not decide whether or not the Commonwealth Bank is an instrumentality of the Commonwealth, but in the judgment of Powers J. it is stated that 'the Bank is, in my opinion, constituted by the Act a Commonwealth instrumentality'.

From a consideration of the cases quoted above, I am of opinion that a provision of any statute of the State of South Australia, requiring a lessee to pay stamp duty on the lease taken by him, does not operate to require the Commonwealth Bank to pay stamp duty on a lease taken by the Bank of premises required for Bank purposes.

I desire to add that if the liabiity to pay stamp duty on the lease is, by State statute or practice, placed upon the lessor, and the Commonwealth Bank, as lessee, has agreed to relieve the lessor of this liability, the Bank cannot claim exemption (Commonwealth v. State of New South Wales 24 A.L.R. 253).

[Vol. 16, p. 133]