A quick perusal of these boards would show that such a theme is common to all jurisdictions. The Australian argument seems to have some idiosyncratic qualities that I believe merit a judicial response. Unfortunately, I have never seen the flaws in the argument properly debunked in a reported judgment.
The argument appears to have its genesis with Alan Skyring, possibly the most famous and persistent self-represented litigant in the Queensland state jurisdiction, if not nationally. Mr Skyring did not feel that he was able to pay tax with Australian currency and progressed appeals on this point to the High Court. He failed in all cases. He continued to agitate the argument in both state and federal courts for some time until both declared him a vexatious litigant. He is now only able to bring actions with the leave of the Court (he recently sought leave and failed).
I have noticed a number of other self-represented litigants advancing the same arguments and the hand of Skyring has been judicially detected in some of these matters (Mowe has alluded to them himself in another post). Skyring’s argument was what attracted me to the “all laws are invalid and I don’t have obey them” arguments in the first place and what eventually drew me to these boards.
As mentioned above, from reading the reported decisions, whilst the judges have repeatedly rejected the argument, their reasons are not particularly revealing. Skyring himself has complained that the issue has not been judicially explained. It is the one point on which I have some sympathy for him. I propose to set out the legislation and the argument as I understand it and explain why I think it fails. That it fails is in no doubt but perhaps an SLR can be discouraged from advancing this argument if they happen to come across this post.
The first reported decision I can find on the argument is Re Skyring’s Application (No. 2) (1985) 59 ALJR 561. Unfortunately, the decision is not available online so I can’t link. I have a copy of the report though. Justice Deane sets out the relevant provisions upon which Skyring relied and says:
I have come to the clear conclusion that there is no substance in the argument that there is a constitution bar against the issue by the Commonwealth of paper money as legal tender. Nor in my view would there be any substance in an argument that the provisions of s 36(1) of the Reserve Bank Act 1959 are invalidated or overruled by the provisions of the Currency Act.
This is the full extent of the discussion on why the argument is wrong in that report. I have found numerous instances of other federal and state judges referring to Justice Deane’s decision as authority, which it undoubtedly is, but in my view, that does not assist the SLR in understanding why it is wrong. The argument has been advanced to avoid payment of taxes, mortgages, attempts to overturn federal and state elections and deny the ability of successful litigants to obtain costs.
By background, Australia is a federal system established under the Australian Constitution. The Federal powers are set out in the Constitution. The States powers are plenary, except where limited by the Federal Constitution. The sections of the constitution applicable to this argument are as follows:
51. Legislative powers of the Parliament
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:
(xii) currency, coinage, and legal tender;
(xiii) banking, other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money;
109. Inconsistency of laws
When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.
115. States not to coin money
A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts.
Pursuant to the powers under the Constitution, the federal parliament has enacted the Currency Act 1965 which relevantly provides:
SECT 8 Monetary unit and denominations of money
(1) The monetary unit, or unit of currency, of Australia is the dollar.
SECT 9 Transactions to be in Australian currency
(1) Subject to this section, every sale, every bill of exchange or promissory note, every security for money, and every other contract, agreement, deed, instrument, transaction, dealing, matter or thing relating to money, or involving the payment of, or a liability to pay, money, that is made, executed, entered into or done, shall, unless it is made, executed, entered into or done according to the currency of some country other than Australia, be made, executed, entered into or done according to the currency of Australia provided for by this Act.
SECT 11 Payments to be made in currency under this Act
(1) Every payment that is made shall, unless it is made according to the currency of some country other than Australia, be made according to the currency of Australia provided for by this Act.
SECT 16 Legal tender
(1) A tender of payment of money is a legal tender if it is made in coins that are made and issued under this Act and are of current weight:
(a) in the case of coins of the denomination of Five cents, Ten cents, Twenty cents or Fifty cents or coins of 2 or more of those denominations--for payment of an amount not exceeding $5 but for no greater amount;
(b) in the case of coins of the denomination of One cent or Two cents or coins of both of those denominations--for payment of an amount not exceeding 20 cents but for no greater amount;
(c) in the case of coins of a denomination greater than Fifty cents but less than Ten dollars--for payment of an amount not exceeding 10 times the face value of a coin of the denomination concerned but for no greater amount;
(d) in the case of coins of the denomination of Ten dollars--for payment of an amount not exceeding $100 but for no greater amount; and
(e) in the case of coins of another denomination--for payment of any amount.
The parliament has also enacted the Reserve Bank Act 1959, which relevantly provides:
SECT 34 Issue, re-issue and cancellation of notes
(1) Subject to this Act, the Bank may:
(a) issue Australian notes;
SECT 36 Notes to be legal tender
(1) Australian notes are a legal tender throughout Australia.
The crux of the currency argument goes like this
1. Section 115 of the Constitution prohibits the States from making “anything but gold and silver coin a legal tender in payment of debts.”
2. Therefore, the States cannot accept anything but gold or silver money to pay debts (such as property rates or court fines, for example).
3. The Currency Act provides that all transactions are to be in Australian currency “as provided for under this Act.” (s 9)
4. The Currency Act only legislates the existence of coinage up to 50 cents but does have some provision for larger amounts. At any rate legal tender is, at best, $100 under the Currency Act.(s16)
5. Therefore any debt above $100 cannot be paid in legal tender as it must be paid in Australian currency under the Currency Act, the upper limit of which is restricted by section 16.
6. The creation of paper money or Australian Notes under the Reserve Bank Act is invalid because it is not a transaction under the Currency Act section 9.
At face value, this argument would appear to be attractive, particularly to an SLR.
The flaws in this argument are as follows:
1. The Federal government has explicit power in section 51 to legislate with respect to currency, coinage, legal tender and paper notes.
2. Section 51 is a concurrent power provision which means that a States can also legislate on any topic in section 51. However, in this case section 115 prohibits concurrent legislation on this topic. Section 109 would also operate to strike the State law down for inconsistency anyway. The clear intention is that the Feds look after what constitutes currency.
3. The Currency Act sets the Australian currency as the Australian dollar.
4. The States do not make something other than gold or silver legal tender merely by setting penalties or levies in Australian currency. If you are fined or levied under a State law, such fine or levy is in Australian currency, which is the Australian dollar. This seems to cause the SLR a significant conceptual obstacle. If the States made fines payable in platinum or pesos, there might be a problem
5. The Currency Act says that all transactions must be in Australian currency as provided for in that Act. The proponents of the argument are mixing up “currency” with “legal tender”. They are reading that section as saying that “all transactions must be in legal tender as provided for under this Act.” If that were correct then the maximum legal tender under the Currency Act would be $100. However, the section only requires transactions to be in Australian dollars.
6. The Reserve Bank Act provides for the creation of paper money and such notes can be used to pay a debt of any amount. It also creates another definition of legal tender. It does not contravene section 16 of the Currency Act restriction because the transactions are still in the currency set under the Currency Act, namely Australian dollars. This is apparently another significant conceptual obstacle.
7. There is no obstacle however to the parliament creating separate definitions of legal tender under two different Acts, as long as there is no conflict. Even if there was, the High Court is there to resolve the conflict.
If anyone is interested in cases, search “Skyring”, “Cusack” or “Clampett” on http://www.austlii.edu.au. You will fill your boots. Be warned, Austlii isn’t as friendly as Canlii, you will have to filter out some rubbish. I can provide links if desired.