Case: Skyring v Federal Commissioner of Taxation (1992) ATR 84
Outcome: cited
In Skyring v Federal Commissioner of Taxation (1992) ATR 84, the Full Court of the Federal Court (Gummow, Einfeld and Heerey JJ) heard an appeal by Mr Skyring from a decision of Pincus J dismissing Mr Skyring's application in October 1990 for annulment of his bankruptcy. In that application and on appeal, Mr Skyring again agitated his contention that by s 36 of the Reserve Bank Act 1959 (Cth), the Commonwealth has made notes rather than gold and silver coin legal tender in payment of debts throughout Australia in contravention of s 115 of the Constitution . Mr Skyring also contended that the power of the Commonwealth Parliament to make laws for the peace, order and good government of the Commonwealth with respect to currency, coinage and legal tender contain words of limitation which render it not possible for the Commonwealth Parliament to enact a valid law for the issue and circulation of paper money and the rendering of paper money legal tender in the payment of debts, as legal tender must consist of coins of gold and silver value not simply paper of face value. Their Honours at p 87 said this: ... However, the expression does not contain any such words of limitation: R v Foster; Ex parte Eastern and Australian Steamship Co. Ltd [1959] HCA 10 ; (1959) 103 CLR 256 at 307; Union Steamship Co. of Australia Pty Ltd v King [1988] HCA 55 ; (1988) 166 CLR 1 at 10; 82 ALR 43. The parliament has legislated for the issue of paper money as legal tender and there is no constitutional bar against it having done so. 24 Section 51(xii) confers power upon the Commonwealth Parliament to make laws with respect to 'currency, coinage and legal tender' and by s 51(xiii), laws with respect to '... the issue of paper money'. The Australian Notes Act 1910 (Cth), Part VII of the Commonwealth Bank Act 1911 (Cth), Part VI of the Commonwealth Bank Act 1945 (Cth) and Part V of the Reserve Bank Act 1959 (Cth) provide for the issue, re-issue and cancellation of 'Australian notes'. Section 34 of the Reserve Bank Act provides for the printing by or under the authority of the Reserve Bank of such notes. Section 35 provides for denominations of notes and s 36(1) provides that 'Australian notes are a legal tender throughout Australia'. Section 36(2) provides for a conversion of a note in a denomination of shillings or pounds to a denomination in decimal currency (for example, 10 shillings is a denomination of one dollar; one pound is a denomination of two dollars). Section 16 of the Currency Act 1965 (Cth) provides that tender of payment of money is a legal tender if made in coins made and issued under the Currency Act and the coins are of 'current weight' as defined. A tender of payment by coins is however legal tender subject to particular limitations (for example, if the tender is made up of coins that have a denomination of five cents, 10 cents, 20 cents or 50 cents or coins of two or more of those denominations, the tender will be a 'legal tender' for payment of an amount not exceeding five dollars. In the case of coins of a denomination greater than fifty cents but less than ten dollars, the limit is 10 times the face value of a coin of the denomination concerned). 'Currency' means the acceptance, reception, passing or circulation from hand to hand, from person to person, of metallic money or of government or bank notes as substitute for metallic money. 'Coinage' is the act or process of converting metal into money for circulation. The 'coining and legitimation of money' was one of the exclusive prerogatives of the Crown yet regulated by Act of Parliament from the 'earliest times'. 'Legal tender' is the act of tendering, in the performance of a contract, or in the satisfaction of a claim, that which the law prescribes or permits and at such time and place as the law prescribes or permits. As to these terms, see Quick and Garran , The Annotated Constitution of the Australian Commonwealth , (1901) pp 572-6. The provisions of the Reserve Bank Act and the Currency Act are both properly characterised as a law with respect to an enumerated head of power within s 51 of the Constitution . The power to make laws with respect to those heads of power is to be given full expression and is not subject to the limitation Mr Skyring contends for ( Skyring v Federal Commissioner of Taxation (supra)). The contention that the provisions of the particular statutes are constitutionally invalid is, in my view, unarguable. 25 Mr Skyring says that he seeks to re-open the final order of the Full Court as there are the two outstanding matters to be addressed and accordingly the appeal proceeding remains on foot and is not 'finalised'; Mr Skyring was not able to progress an appeal before the High Court to test the merits in the appeal of his constitutional contentions; his underlying arguments as to constitutionality have therefore never been addressed; the outstanding costs order, its enforcement and the final resolution of the disposition of the monies paid by way of security entitles him to expose further his principal contentions; he has suffered and continues to suffer prejudice; and, 'exceptional circumstances' subsist which warrant re-opening the Full Court's order to enable the constitutional points to be argued. Those circumstances are said to be the prejudice suffered by Mr Skyring, the injustice thus arising and the broader public interest in determining the validity of his contentions.