It is the Reserve Bank of Australia’s understanding that, although Australian currency has legal tender status, it does not necessarily have to be used in transactions and that refusal to accept payment in legal tender banknotes and coins is not unlawful. This is the case even where an existing debt is involved. However, a refusal to accept legal tender in payment of an existing debt, where no other means of payment/settlement has been specified in advance, conceivably could have consequences in legal proceedings, i.e. the creditor may be unable to enforce payment in any other form.
It appears that the provider of goods or services is at liberty to set the commercial terms upon which payment will take place before the ‘contract’ is entered into. For example, some toll collection points indicate by signs that they will not accept low denomination coins. If a provider of goods or services specifies other means of payment prior to the contract, then there is usually no obligation for legal tender to be accepted as payment.