Cash is no good for debts! – section 115

black2 - Copy (4).jpg

Leonard Clampett repeatedly claimed it was impossible for him to pay fines, tolls, and other state debts because section 115 of the constitution 1 states the government can accept only coins made of gold or silver as payment for debts. He last regurgitated his previously rejected theories in 2012, in Brisbane Magistrates Court, 2 after he was snapped by a speed camera. He argued he could not pay the $200 speeding fine, because “there is no gold and silver coins in common circulation”. He insisted that “A state, as opposed to the Commonwealth, cannot compel you to pay in other than gold and silver coin. Fairly simple.” His argument inevitably failed, with Magistrate Sheryl Cornack finding Mr Clampett guilty and ordering he pay the $200 fine, and $76.90 in court costs. She also ordered he pay police prosecution’s out of pocket expenses, totaling $3500, in obtaining an expert witness.

Three weeks later, Mr Clampett fought to have the ruling overturned by the Supreme Court in Clampett v Magistrate Cornack [2012] QSC 123 applying for a judicial review on the grounds no court had previously defined the terms of the constitution. He also raised a challenge to the photographic evidence, contending that the speed camera failed to comply with the National Measurements Act (Cth). Supreme Court Justice Martin Daubney ruled that the basis of his argument “has long been discredited” and dismissed Mr Clampett’s application. “None of the reasons advanced by the applicant amount to any good reason for having instituted the present application.”

“To the extent that the applicants justification for bringing the present application  in this Court relies on a contention that he was precluded from approaching the District Court because of his assertion that this would require him to make payment in a manner which was not “strictly legal manner, constitutionally” (i.e. the legal tender argument referred to in paragraph 2 of his prayer for relief), it is clear that the argument on which that contention is based has been long discredited. It is sufficient in that regard to refer to the judgment of Deane J in Re Skyring’s Application (No 2).”

Click to access clampett-v-magistrate-cornack-2012-qsc-123.pdf

The appellant appealed this decision in Clampett v Magistrate Cornack & Anor [2013] QCA 2 and the application was dismissed.

Click to access clampett-v-magistrate-cornack-anor-2013-qca-2.pdf

This wasn’t the first time Leonard Clampett has raised this defence in paying his debts. The previous time was in Clampett v Kerslake (Electoral Commissioner of Queensland) [2009] QCA 104, where Fraser JA reminded him of the last time the Supreme Court rejected this argument.

“In Clampett v Hill [2007] QCA 394 at paragraphs 15 and 16, this Court rejected as vexatious an appeal in which the applicant agitated his argument to the contrary. The applicant nevertheless repeats that rejected argument. In doing so, he adopts Mr Skyring’s earlier argument to the same effect even though it was rejected as lacking legal merit in numerous authoritative decisions including a decision of the Full Court of the High Court on 9 July 1985 which affirmed Justice Deane’s decision in Re Skyring’s Application (No 2) (1985) 59 ALJR 561.”

Click to access clampett-v-kerslake-electoral-commissioner-of-queensland-2009-qca-104.pdf

Click to access clampett-v-hill-ors-2007-qca-394.pdf

The appellant sought special leave to the High Court in Leonard William Clampett v David Kerslake, Electoral Commissioner Of Queensland [2010] HCASL 280 which was likewise rejected.

Leonard William Clampett v David Kerslake, Electoral Commissioner Of Queensland - BarNet Jade - BarNet Jade-page-001


Allan Skyring, who also ran this argument persistently after his 1985 High Court rejection, was eventually declared a vexatious litigant by White J in 1995. He raised the argument again in 2013, also defending a speeding fine. After it was rejected by Magistrate Springer in the Brisbane Magistrates Court, Skyring also applied for a judicial review on the grounds that there was never any court determination on the issue, and the 1995 order should be set aside so he could institute proceedings “unencumbered”. Mullins J refused leave and dismissed the application.

Extract from Re Skyring [2013] QSC 197:

“White J in the course of giving the reasons for the 1995 order referred to the disposition of the applicant’s currency issue against the applicant by Deane J in Re Skyring’s Application (No 2) (1985) 59 ALJR 561 which decision was upheld by the Full Court of the High Court. That the applicant’s argument was disposed on the merits has been recognised in other cases, such as Clampett v Kerslake (Electoral Commissioner of Qld) [2009] QCA 104. It is incontrovertible that the applicant’s argument about what is legal tender was authoritatively determined against him in the High Court, as accurately recorded by White J in the reasons for the 1995 order. The applicant’s desire to re-agitate an argument that has been settled authoritatively and resulted in the vexatious proceedings order against him.”

Click to access re-skyring-2013-qsc-197.pdf

Re Skyring’s Application (No 2) (1985) 59 ALJR 561 is unpublished online, but I did find this statement by Deane J in a report:

“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.”

The argument was also raised in Fyffe v State of Victoria [2000] HCA 31, in which Brian Fyffe contended that the state did not, or may not have, lawfully paid for land it acquired in 1989 through the Ministry for Conservation, Forests and Lands, because it did not pay in the manner prescribed by s 115 of the Commonwealth Constitution. Hayne J also cited Deane J in Re Skyring’s Application (No 2) (1985) 59 ALJR 561 and ruled that:

“It is enough to say of this point that, in my opinion, it is wholly without substance.”

Click to access fyffe-v-state-of-victoria-2000-hca-31.pdf

Patrick Cusack also ran the currency argument numerous times before the High Court. It is very rare for an individual to be declared a vexatious litigant by the High Court. Only four people have been declared to be vexatious litigants by the High Court of Australia since its inception, and two of those were regarding this long-debunked currency argument. One was Patrick Cusack in Jones v Cusack [1992] HCA 40 and the other was Alan Skyring in Jones v Skyring [1992] HCA 39. It was ordered that either “…shall not, without the leave of the Court or a Justice, begin any action, appeal or other proceeding in the Court.”

Click to access jones-v-cusack-1992-hca-40-1992-109-alr-313-1992-66-aljr-815-27-august-1992.pdf

Click to access jones-v-skyring-1992-hca-39.pdf

This contention has been raised very often in the courts. You can read further cases on this website under the Tag “The Currency Argument“.

The following is a published response from the Tolling Customer Ombudsman 3 responding to the section 115 argument regarding non-payment of tolls.

Click to access claim-regarding-opportunity-to-pay-tolls-and-fees-in-gold-or-silver-coin-february-2015.pdf


Most of these arguments are a form of protest against the fractional reserve banking system, however misconceived they are. There have even been some academic papers published on this subject, like the following from Andrew Dahdal, entitled “The Constitutionality of Fiat Paper Money in Australia: Fidelity or Convenience?4

Click to access andrew-dahdal-the-constitutionality-of-fiat-paper-money-in-australia-fidelity-or-convenience.pdf


Paper money

Many of the preceding litigants arguments revolve around the notion that the Commonwealth has no constitutional source of power to create legal tender other than gold and silver, specifically aimed at the fractional reserve banking system, and often includes the “Book-entry credits” contention, based on the US Credit River decisions. (First National Bank of Montgomery v Daly and Jerome Daly v Savage State Bank & Anor).

The power to create currency is provided for under section 51 of the Constitution5 51(xii) “currency, coinage, and legal tender” and section 51(xiii) “banking… and the issue of paper money”. Banknotes issued by the Reserve Bank of Australia, and coin up to certain amounts have the status of “legal tender”. (See section 36 Reserve Bank Act 1959, 6 and section 16 Currency Act 1965 7) A referendum is not required to change the currency, as this is clearly within the legislative powers of the Commonwealth.

The following passages in The Annotated constitution of the Australian Commonwealth 8 by Quick and Garran explain this source of power.

Page 579 – “The Federal Parliament has power to legalize or prohibit the issue of paper money, in this respect it has received a grant of power conspicuously more liberal than that which was intended, by the framers of the American Constitution, to be conceded to Congress.”

Page 572 – “Currency in this connection 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.”

Page 575 – “By section 114 the States are forbidden to coin any money or to make anything but gold and silver coin a legal tender in payment of debts. The prohibition is similar to Art. I. sec. 10, subs. 1 of the United States Constitution. Hence it appears that under both Constitutions the creation and regulation of the monetary system is a power conferred on the Federal Parliament. It is a general power; the Parliament is not limited in the choice of metals to which it will give the quality of money. It may choose some other metal than gold and silver, and impress upon it a legal tender quality.”

Page 950 – “A State is forbidden to coin money; it cannot create a metal currency; it cannot give to metal any more than to paper the quality of money. The combined effect of this negation, coupled with the operation of sec. 51—xii., is that the coinage and legitimation of metal money, and in fact the regulation of the whole of the monetary system of the Commonwealth, is exclusively vested in the Federal Parliament, as against the States. That Parliament alone will be able to create money and regulate its value, as well as create paper money, and regulate its value.”

YY

Ultimately, the purpose of section 115 was specifically to prohibit the States from creating currency, as this power is wholly conferred on the Commonwealth. It is an exclusive legislative power, as opposed to a concurrent power.

The Australian Currency Argument by Quatloos 9

.