MONEY TREE MGNT SVS P/L v THE DEP COMM OF TAXATION

The summons was referred by a Master to a Judge for hearing. The summons has come on for hearing before me today.

In support of its summons, Money Tree has filed an affidavit sworn by Ms Mathew, a director of Money Tree. The affidavit sets out, at some length, legal arguments upon the basis on which the order is sought. I have also had the opportunity to read in advance written submissions filed, by the solicitor for Money Tree, on 28 February. Those written submission were supplemented by oral submissions today.

The submissions for Money Tree raise questions arising under the Constitution, or involving its interpretation within the meaning of s 78B of the Judiciary Act. Notice has been given pursuant to that section to the Attorney-General for the Commonwealth, and to the Attorneys-General for each the States and Territories. The Attorneys-General do not wish to intervene in the proceedings. Accordingly, I proceeded with the hearing of the matter.

The submissions advanced by Money Tree are, in some respects, unclear. In some respects, I must say they appear to be confused and to reflect a considerable misunderstanding about the constitutional law of the Commonwealth of Australia.

The essence of the argument advanced for Money Tree appears to be that the Income Tax Assessment Act is invalid and, further, or alternatively, that the appointment of the Deputy Commissioner of Taxation is invalid because an appointment made by the Governor-General is not a valid exercise of powers vested by the Constitution in the Governor-General.

These arguments are substantially the same as arguments considered by Hayne J in Helljay Investments Pty Ltd v Deputy Commissioner of Taxation [1999] HCA 56; (1999) 166 ALR 302 and in Joosse v Australian Securities and Investment Commission [1998] HCA 77; (1998) 159 ALR 260.

It may be that the submissions put to me are, in essence, identical to those put to Hayne J. It is not easy to tell because of the way in which the submissions are expressed.

The first strand of the submissions put to me is one which I confess I do not fully understand. It seems to be that the Queen of Australia is indistinguishable, in law, from the Queen of the United Kingdom. In other words, it is not just that each of these constitutional entities is filled by the same person, but that, as a matter of law, they are one in the same entity and office. The conclusion which is said to follow from this is, I think, that the powers vested by the Constitution in the Sovereign, or in the Governor-General as her representative, must be exercised by the Queen in right of the United Kingdom. I assume this means by her Majesty acting upon the advice of her United Kingdom ministers. Alternatively, the argument may be that changes in constitutional arrangements over time, which have led to the identification of the Queen of Australia, as a distinct constitutional entity, are unlawful and unconstitutional and that, in some way, these changes infect the exercise of powers by the Governor-General. The end result appears to be a submission that there has been no valid assent to the Assessment Act and so it is not law.

A similar argument was rejected by Hayne J in Joosse. I reject the submissions put to me. There is no suggestion that the Assessment Act has not been assented to by the Governor-General and I find no basis for impugning the validity of that assent in any of the submissions put to me.

The second strand in the submissions is linked to the first strand. It is that the Governor-General is incapable of validly assenting to the Assessment Act because he is a representative of the Queen of Australia and not of the Queen of the United Kingdom. For the reasons already given, that submission necessarily fails.

The third strand is that, since at least the time of the Australia Act of 1986, the Parliament of the United Kingdom and the Queen in right of the United Kingdom have no part to play and no power to exercise in relation to the government of the Commonwealth of Australia. It is said to be a consequence of this that action by the Governor-General, because it depends on him being a representative of the Queen in right of the United Kingdom, cannot be a valid action and, once again, his assent to the Assessment Act is attacked. An attack on the same basis was launched upon the appointment of, and granting of delegations to, the Deputy Commissioner of Taxation.

My view is that this submission also fails because it also depends upon the notion that legislative authority and executive authority, in respect of the Commonwealth of Australia, remain vested in the legislature and Crown of the United Kingdom.

The fourth strand is one that I do not understand. It appears to have something to do with the process by which the Commonwealth of Australia acquired the status of an independent sovereign state at international law. The submission recites a number of events which, I accept, are relevant to that process. I am, with respect, unable to find any connection between the matter adverted to and the validity of the Assessment Act. I reject this submission accordingly.

There was also a particular submission advanced that the Assessment Act, when originally enacted, was assented to in the period after the death of one sovereign and before the coronation of another. It was submitted that this assent was legally ineffective.

In that respect, I note that an identical, or apparently identical submission was addressed to Hill J of the Federal Court in Deputy Commissioner of Taxation v Levick (1999) FCA 1580 and, in particular, at [30]. As to that submission, I am content, with respect, to adopt the reasoning of Hill J in rejecting the submission.

Then there was a submission that the issue of the notice under the Corporations Act was an abuse of process. To the extent that that argument might rest upon a submission that the legislation is invalid, or that relevant appointments are ineffective, I reject it for the reasons already indicated.

Part of this submission appeared to be that the notice had been issued in respect of an amount that was not the subject of an assessment and was, therefore, not recoverable by the Deputy Commissioner of Taxation. I am far from satisfied that, on the very limited material before me, it has been established, on the balance of probabilities, that the claim is not in respect of an assessment of income tax. Indeed, I am not satisfied that that has been made out.

In any event, it appears to me that that is not a ground which could give rise to an abuse of process. If the amount is recoverable by the Commissioner on one basis or another, then the Commissioner may make use of statutory procedures for the recovery of moneys. It matters not whether, in fact, the moneys are claimed on the basis that an assessment has been made or on the basis that they are legally payable on some other basis.

A further submission advanced was based upon the decision of the High Court in Re Wakim: Ex parte McNally [1999] VSC 227; (1999) 163 ALR 270. The effect of the submission was that legislation enacted by a state parliament cannot be used to enable the Deputy Commissioner of Taxation to recover money, either at all or, at least, money that is not payable pursuant to an assessment duly made under the Assessment Act.

I reject that submission also. My view is that the State Parliament has power to create means for recovering debts, and any legal entity within Australia, whether it owes its existence to State or Commonwealth law, may resort to those means under State law for the recovery of debts. In my view, there is no substance at all in the submission that the State law cannot provide a means for a Commonwealth entity to recover a debt.

For all of those reasons, I have been unable to identify any valid basis for impugning the validity of the Assessment Act, or of the appointment of the Deputy Commissioner of Taxation, or of the exercise of delegated powers leading to the issue of the notice, or to impugn the validity of the notice itself.

I believe and hope that I have done the arguments justice in dealing with them as briefly as I have. To the extent that I may not have done the arguments justice, I am content to adopt the reasoning of Hayne J in Helljay Investments and Joosse and the reasons of Hill J in Levick and of Austin J of the Supreme Court of New South Wales in Poonon Pty Ltd v Deputy Commissioner of Taxation [1999] NSWSC 1121.

For those reasons, I dismiss the application made, by the Summons of 1 July 1999 in par 1 of that Summons.