Promissory Notes

Troy Dimitrov made this Freedom of Information request to Department of the Treasury

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The request was successful.

Dear Department of the Treasury,

Are banks legally bound to take my promissory note?

What is the treasuries position on using promissory notes?

Lord denning stated
"We have repeatedly said in this court that a bill of exchange or a Promissory Note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary" (see per Lord Denning M.R. in Fielding & Platt Ltd v Selim Najjar [1969] 1 W.L.R. 357 at 361; [1969] 2 All E.R. 150 at 152, CA)
Another of Lord denning’s rulings stated that a bill of exchange once tendered has to be treated as cash.
The principle is that a bill, cheque or note is given and taken in payment as so much cash, and not as merely given a right of action for the creditor to litigate a counterclaim (see Jackson v Murphy [1887] 4 T.L.R. 92).
First of all it is important to remember that the Bills of Exchange Act 1882 (and many Statutes subsequently) consider a Promissory Note to be the same thing as "cash".

Is this somehow not enforced in Australia?

Yours faithfully,

Troy Dimitrov

Mail Delivery Subsystem, Department of the Treasury

2 Attachments


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Locutus Sum left an annotation ()

This request mentions two interesting cases about which I previously did not know; yet, the request will be refused.

The basis for refusal will undoubtedly be that it is not a valid FOI request. A valid FOI request must be for a document, or alternatively (s 17) for information that the agency has in a computer that is not in discrete form but which could be compiled into a discrete form using a computer. This request is for answers to some interesting questions but not for a document; therefore it will lead to a refusal.

It is interesting to speculate what the outcome would be if the request represented a valid FOI request. In this circumstance, I think it would also be refused on the grounds of s 42. It is not usually the role of an agency to give legal advice to citizens and if the agency had a document in its possession that answered the applicants's questions, that document would with high probability exempt because if was subject to legal privilege:
Section 42(1) says that "A document is an [absolutely] exempt document if it is of such a nature that it would be privileged from production in legal proceedings on the ground of legal professional privilege."

Department, Department of the Treasury

Dear Mr Dimitrov,

Thank you for your email of 2 January 2017.

In Australia, promissory notes in general are governed by the Bills of Exchange Act 1909. You should note that the Bills of Exchange Act does not authorise a person to unilaterally create an instrument that a third party is obliged to accept as payment for a debt owed to it or which unilaterally obliges a person to pay a sum of money to another person.

You may wish to seek independent legal advice in relation to these matters. However, Treasury cannot provide you with legal advice.

Parliamentary and Legal Servcices Division

show quoted sections

Locutus Sum left an annotation ()

The response is more informative and helpful than I expected and it mentions some of the important legal points.

I don't know whether the applicant has read the whole of the judgment in Fielding & Platt Ltd v Selim Najjar [1969] 1 W.L.R. 357 ( ), which he mentions in his application to the Department of the Treasury but the judgment does not say quite what many non-lawyers think that it does. To explain what the quoted sentence of Lord Denning does mean would take our story too far away from the main part of the request on this page. It is better to talk about what Lord Denning's comment does not mean. It does not, for example, imply that when I have a debt of $1000, I can write out a promissory note for $1000 in full settlement of the debt and make this the end of the matter. Yet it is this silly idea that some people apparently believe or have tried to get other people to believe; and they all quote the words of Denning in the Fielding case. Also, it is an idea that is promoted by some websites such as .

There are several cases in Australia, New Zealand, and the United Kingdom to show that some people have thought that they could pay their mortgage (for example) by writing a promissory note and sending this promisory note to the bank! You can see an example of this in Fallon v NSW Government Office of State Revenue State Debt Recovery Office [2013] FCA 270 and another example in Deputy Commissioner of Taxation v Sproule [2012] FMCA 1188. You can find more cases by searching on AustLii in the database of Commonwealth cases law for
"promissory note" AND "taken as cash".

There are two mistakes with the idea that I can pay all my debts without having to work hard. The first mistake is to believe something that the Department of the Treasury has pointed out is false; this is to think that a person can unilaterally decide that a promissory note can be used to pay a debt. It cannot. The second mistake is to think that the promissory note is worth something by its very existence. It does not. A promissory note is worth something because on presentation of the note to the payer's agent, the payee will collect the money that is promised. If there is no possibility of the agent paying, then the promissory note is not "worth the paper it is written on". You can see an example of the twisted ways in which people misunderstand Lord Denning in the case of Deputy Commissioner of Taxation v Sproule [2012] FMCA 1188. After considering the facts, the Federal Magistrate says, "On the structure of the documentation before the Court, Mr Sproule has prepared a bill of exchange with a face value of $1 AUD and forwarded that to the ATO seeking acceptance as settlement for an outstanding debt of $436,472.14. Logic as to why the DCT would accept that document is completely unexplained"!! A similar idea is described in the New Zealand Banking Ombudsman case number 47343 ( ). In this case, the plaintiff wants to pay her credit card debt with a promissory note denominated in "Res" and drawn on the pretend "WeRe Bank". You must read the case to understand the humour of this idea.

There is much more that I could write about other similar cases but I think it is maybe more interesting to mention a very similar request on a brother-website of Right to Know; it is the website and the request is called "Legal Tender" ( )

Glenn Horton left an annotation ()

I noticed that the Treasury stated that we can not give out legal advise, so here is an answer for that reply.
if this link doesn't work it says: Courts have a wide variety of roles, including enforcing the criminal law, resolving civil disputes, upholding the rights of individual, ensuring that government agencies stay within the law, and explaining the law.
The supreme court in New Zealand final court of appeal with the role of maintaining coherence in the legal system.
Ministry of justice New Zealand 29/01/16.
To make this easier this is the law and they are obligated to explain the law

Locutus Sum left an annotation ()

Whatever is the role of the courts in New Zealand and the United Kingdom and also in Australia, it is not the same role as the role of the Treasury. The Treasury is a department of the executive government in the tripartite system of government that exists in Australia (executive, parliament, judiciary). It is also well established in Australia that (a) the Freedom of Information Act (Cth) provides a method for a person to obtain access to documents and (b) that a department is not obliged to answer general questions. Although I cannot find any particular judicial decision, it is difficult to imagine that a department of executive government is obliged to provide general advice about the law.

Andrew Last left an annotation ()

Take a look at any bank note, legal tender it has two signatures, it has a denomination or value and a serial number making it unique, it is therefore a promissory note
The original promise was to exchange it for gold or silver to the value of,
these days you cannot go to a bank and exchange you note for gold or silver
The real value is your time and effort you exert and the land and property you own with that time and effort.

steven left an annotation ()

So how do the Rothschild's get away with continually printing money , they have so much money circulating and they continue to print more which has them in a position where they basically own the world , so why am I not allowed to be my own bank and print my own currency and use it , I should be permitted to print up to what my net worth is as an Australian citizen and I can only be permitted to print more than my net worth if other citizens agree to use my currency , isn't that the only reason the Rothschild's needed to print so much money , the fact that everyone in the world has agreed and is actually using there monetary system is what keeps them in the position they are in , if everyone in the world suddenly refused to be a part of the Rothschild system overnight the Rothschild fortune would crumble back to the real amount and that would be the total amount of gold and assets in there possession and the paper money would become toilet paper.

steven left an annotation ()

Thank you Locutus Sum, your vague explanation of why a promissory note has no value has contributed to my further understanding of the system.

1. If you promise to pay on a certain address, day and time of the month which is cited on the self created promissory note and the agency doesn't attend to collect the payment then they have breached the conditions of the promise and more than likely sold the note.

2. So how can they sell the note if the note is worthless ?

3. Isn't this exactly the same as the treasury created bond that is traded for currency with the RBA.

4. Why would a bond of property and labour of the people made by a rogue government that no longer governs for the good of those people be worth anything. that's a false promise.

5. Why would the promise note from the actual owner of his property and energy be invalid or worthless

6. Are you implying that the government is what gives the peoples property and/or energy it's value by indorsement ?

7. I could have sworn it was meant to be the other way around and the people give the government power ?

8. To think that a promissory note created by a man to pay a mans own debts with the promise of that mans own property or energy is a lot less ridiculous that a government creating a promissory note that promises other peoples property and energy to pay the government created debt ??

9. And no ! the debt is not the peoples debt because the people have had no say in the how the money is being spent so the people are not liable for the national debt.

10. If what you say is true then how do you explain the value of our bank note ? what promise do we have that those notes are worth the energy that we exchange for them ? the organisation that is behind these notes have never been elected or been endorsed by any forum or method that has any credibility,your explanation must also render banknotes worthless.

Paul Tyler left an annotation ()

A Practical Guide To Paying Your Tax Obligations Using Your Signature “Theoretically”
Disclaimer: Use at your own risk, talk to a lawyer (and get screwed) if you need advice. My advice, research yourself as this “blunt” step by step is for educational and entertainment purposes and infants, lunatics & feme’s covert.

This is for the Australian Tax Office and The New Zealand Inland Revenue Department Only (Aus & NZ).

1) You must have a statement of account from the Tax Office demanding a certain sum of money, addressed to a person, individual, tax payer, employee, company, corporation etc.
2) You must use a RED pen, not blue or black and write on the statement in a diagonal fashion.
3) “ACCEPTED FOR VALUE, RETURNED FOR VALUE” (Write on the Front and back of document, preferably).
4) Sign it (front (anywhere) and back, bottom right hand corner, avoid alonge area of payment slip)
5) WITHOUT RECOURSE (Optional, but safer)
6) Tax File Number (A must or the ATO/IRD will not deal with it.)
7) IN CASE OF NEED ………………. (Optional) You could put your grandma or the Attorney General even, up to you, but not essential.
8) If the statement has a coupon/cheque type, payment slip down the bottom sign that also on the alonge. Which means at the end of the slip, so turn document 90 degrees clockwise and sign bottom left hand corner.
9) You may sign the payment slip front (and back is optional)
10) You must find your correct ATO/IRD mailing address for payment relevant to the state or province you live in. If in doubt, look at the mailing payment instructions on the document, or check out the Tax Office website for your area.
11) Take a photocopy for your records, preferably colour, so you can brag to your mates when it goes through as a “franked dividend credit offset” from tainted income or something to that effect.
12) Get an envelope and address it to the Tax office as aforementioned and add “Attention: Fraud Office”. This is not a trap, the Fraud office verify your signature and deal with private counter claims/setoff as most other ATO/IRD self-proclaimed experts are actually Muppet’s that have no idea and feed you a bunch of baloney about regulations and why this won’t work. It works and I have proof.

Conclusion: A Bill of Exchange (BoE) tendered in the private arena are processed as cash or money of account, if sent to the correct department or officer and of course prepared correctly. The tax statutes and indeed relevant statutes back law merchant and BoE’s in black and white. However, feel free to consult your lawyer or study and don’t take my word for it. I have done it successfully with the Court and Tax office both ATO & IRD.

Gerard Cec left an annotation ()

Can the Bills of Exchange be treated the same as a Promissory Note?

michael left an annotation ()

FRI 24th Feb. 2023.
Treasury is not a court seeking facts, or arguing them. If the instrument is correctly formatted, completed, and delivery completed, it is done. thats it. logic, go, no go. if dishonored, then enforce, that is it. Fact!
There are several cases related, and acts, for example, bills of exchange act.. consumer credit act..
for the support, and enforcement of notes being used to setoff accounts.
understanding who you are, and when real money turned to fiat, and a maxim, 'One who creates a liability, must provide remedy', is key, along with knowing, now, you are ARE the surety. (your estate).
Cases and process listed are the method, delivery, and enforcement of dishonored notes.
another point is, this is done daily. it is banking. Its not a loop hole, not a trick, its fact, and your right! if you do not use the specific language of banking and its terms, you will not get the response ordered.
In the enforcement, judge will try to trip you up, use the wrong words, ...and youre done. (Judge, ... is also a banker!)
get it right and the appeal is yours.