Australian Prudential Regulation Authority v Cameron

[2007] FCA 628

FEDERAL COURT OF AUSTRALIA

Australian Prudential Regulation Authority v Cameron [2007] FCA 628

AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY v DONALD JAMES CAMERON AND DARRYL JOHN WHEELEY
QUD 95 OF 2007

KIEFEL J
24 APRIL 2007
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 95 OF 2007

BETWEEN:

AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Applicant

AND:

DONALD JAMES CAMERON
First Respondent

DARRYL JOHN WHEELEY
Second Respondent

JUDGE:	KIEFEL J
DATE OF ORDER:	24 APRIL 2007
WHERE MADE:	BRISBANE

In this Order, the following words or expressions have the meanings as defined:

‘the Act’ means the Banking Act 1959 (Cth); and

‘purported bank’ means the ‘Federal State Bank’, ‘Federal State Bank of Australia’ or any other body, whether incorporated or not, described as a ‘bank’ which body:

(a)does not have the consent of the applicant under s 66 of the Act;  or

(b)is not in possession of an authority under s 9 to carry on banking business;  or

(c)is not otherwise the subject of an order by the applicant pursuant to s 11 of the Act that determines that subs 66(1) of the Act does not apply.

THE COURT ORDERS THAT:

1.Each of the respondents be permanently restrained under s 65A of the Act, whether by themselves, their servants or agents or otherwise, from orally or in any written or electronic form:

(a)carrying on any banking business in Australia in contravention of s 7 of the Act;

(b)assuming or using the words ‘bank’, ‘banker’ or ‘banking’ or any words or phrases of like import in relation to any purported bank, business or purported business in contravention of s 66 of the Act;  and

(c)advertising, representing or stating that any purported bank, business or purported business will carry on banking business.

2.Each of the respondents be permanently restrained under s 23 of the Federal Court of Australia Act 1976 (Cth), whether by themselves, their servants or agents or otherwise, from issuing any bill or note for the payment of money payable to bearer on demand and intended for circulation, or which purports to be a bill or note for the payment of money payable to bearer on demand and intended for circulation, in contravention of s 44 of the Reserve Bank Act 1959 (Cth).

3.The respondents pay the applicant’s costs of the proceedings.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 95 OF 2007

BETWEEN:

AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Applicant

AND:

DONALD JAMES CAMERON
First Respondent

DARRYL JOHN WHEELEY
Second Respondent

JUDGE:	KIEFEL J
DATE:	24 APRIL 2007
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. The applicant’s case against the respondents is of breach of ss 7 and 66(1) and 66(4) of the Banking Act 1959 (Cth). The effect of those provisions is that a person carrying on a financial business and using the words ‘bank’ or ‘banking’, without the prior approval of the applicant, commits an offence against the Act.  Section 65A provides wide powers to restrain such conduct, and no undertaking is required to be given by the applicant in pursuit of such an injunction.  The allegations in the statement of claim have regard to the carrying on of a financial business by an entity called the ‘Federal State Bank’ or the ‘Federal State Bank of Australia’, which I shall refer to as ‘the bank’.    Neither Mr Cameron nor Mr Wheeley deny the evidence which is put against them. That evidence shows that the bank is held out as carrying on business at Moorooka in Brisbane.  Cheques have issued under the name of the bank and it purports to be in a position to honour them.  Mr Cameron’s defence, which is adopted by Mr Wheeley, is that the bank is established within an independent sovereign state, of his creation, and that neither they nor the bank are subject to the laws of Australia.

2. This is not the first time that such an argument has been raised in Australian courts.  Goldberg J, in Australian Competition and Consumer Commission v Purple Harmony Plates Pty Ltd (2001) FCA 1062 at [28], pointed out that the Commonwealth Constitution recognises the Commonwealth and the States and Territories as the only entities in the federal polity known as the Commonwealth. An area of land cannot cease to be part of a State, except pursuant to s 123 of the Constitution.  There are no other constitutional means available for the establishment of a separate political community in Australia.  The property said to be that of the independent sovereign state here, upon which the bank conducts its business and in respect of which Mr Cameron and Mr Wheeley are said to be citizens, remains part of Australia. 

3. The only other point I could discern in the argument put by Mr Cameron is that the conduct of the banking business is connected with religion, and that s 116 of the Constitution prohibits legislation which affects freedom of religion.  The latter proposition may be accepted.  The Banking Act 1959 (Cth), however, is not addressed to the conduct of a person’s religion.

4. As to the second respondent, Mr Wheeley, the case against him is that he has been knowingly concerned in this activity.  There can be no doubt about that.  He remains the registered proprietor of the property at Moorooka upon which the banking business is conducted despite his and Mr Cameron’s assertion that it has been sold to the independent sovereign state.  Signs on the property  at Moorooka, where he resides, identify the bank as present.  He has spoken for the bank in relation to a financial transaction.  Plainly enough, he is acting in concert with Mr Cameron, a person well known to courts in Queensland.

5. The applicant suggests that, there being no other point raised by the respondents, the matter should be determined on a final, and not interlocutory, basis.  Mr Cameron agrees with that course, and Mr Wheeley has not submitted to the contrary of it.

6. I am satisfied that breaches on the part of Mr Cameron of the provisions of the Banking Act1959 (Cth) referred to above have been established and that Mr Wheeley has been knowingly concerned in them. The injunctions proposed in the application preventing the continuance of that conduct are appropriate. Those injunctions will be made permanent.

7. The orders proposed by the applicant have added to them some definitions, but otherwise follow the orders proposed in the application.  There will be orders in terms of paragraphs 2 and 3 of the draft order, which is initialled by me, as follows:

   ‘2.Each of the respondents be permanently restrained under s 65A of the Act, whether by themselves, their servants or agents or otherwise, from orally or in any written or electronic form:

   (a)carrying on any banking business in Australia in contravention of s 7 of the Act;

   (b)assuming or using the words ‘bank’, ‘banker’ or ‘banking’ or any words or phrases of like import in relation to any purported bank, business or purported business in contravention of s 66 of the Act;  and

   (c)advertising, representing or stating that any purported bank, business or purported business will carry on banking business.

   3.Each of the respondents be permanently restrained under s 23 of the Federal Court of Australia Act 1976, whether by themselves, their servants or agents or otherwise, from issuing any bill or note for the payment of money payable to bearer on demand and intended for circulation, or which purports to be a bill or note for the payment of money payable to bearer on demand and intended for circulation, in contravention of section 44 of the Reserve Bank Act  1959.’

8. It would seem to me that the respondents have no answer to the fourth order sought, that with respect to costs.  There will also be an order that the respondents pay the applicant’s costs of the proceedings.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.

Associate:
Dated:        24 April 2007

Counsel for the Applicant:	Mr M Martin
Solicitor for the Applicant:	Australian Prudential Regulation Authority
For the First Respondent:	In Person
For the Second Respondent:	In Person
Date of Hearing:	24 April 2007
Date of Judgment:	24 April 2007