Law (Banking) 255

Topics: Bank, Law, Cheque Pages: 3 (1062 words) Published: March 20, 2012
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Semester 1, 2011

Name: Lin Dongyu
Student Number: 14671458
Due date: 21/04/2011
Total word: 997 words
Briefly explain, by reference to case law, why it is difficult to define the term “the business of banking”.

For the term “the business of banking”, the statute definition is inadequately, even some statute laws can help with the understanding about “the business of banking” but the definitions they are provided still not adequate (Waldeck & Giardina). Moreover, it become more difficult for defining “the business of baking” today as the fact that over the years and bank services are more diversified (Waldeck & Giardina). The case law Australian Independent Distributors Ltd v Winter (1965) 122 CLR 443 the Adelaide Cooperative Society accepted the money deposits from their members and recorded it on the passbook (Tyree 2008). The court held that the society had not carrying on the “business of banking” due to the society lacked of the power to lend money – the one of the ‘essential characteristic’ (Tyree 2008). However, there was a later reinforced in the judgement for the case Commercial Banking Co of Sydney Ltd v RH Brown & Co[1] and the ‘High Court held that the main business of bank should be that of the lending of money (Waldeck & Giardina).’ The s 5(1) of the Banking Act 1959 (Cth) shows the precise definition of “the business of banking” and the part (b)(i) said ‘a business that is carried on by a corporation to which paragraph 51(xx) of the Constitution applies and that consists, to any extent, of both taking money on deposit (otherwise than s part-payment for identified goods or services) and making advance of money’ which the definition was adapted straightforwardly by the High Court in Commissioners of the State Savings Bank of Victoria v Permewan Wright & Co Ltd (1914) 19 CLR 457 (Tyree 2008). However, the Victorian Court for the case R v Jost [2002] VSCA 198] held the Act merely restated the previous...
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