11 November 2020


In Atkinson v State Bank of NSW & Anor [2003] NSWSC 675 Master Harrison states

17 As noted, the plaintiff has also pleaded that the Australian Taxation Office is not a validly appointed body. The plaintiff submitted that as the Constitution never received royal assent, Parliament did not have the power to enact the Income Tax Assessment Act 1936 (Cth) or levy any taxes under s 51(ii). 

18 Submissions very similar to this have been made in a number cases recently: see Dooney v Henry (2000) 174 ALR 41; Levick v Law Society of New South Wales [2002] NSWSC 481; Miller v Chapman (2001) 46 ATR 317; Matchett v Deputy Commissioner of Taxation (2000) 158 FLR 171; Joose v Australian Securities and Investment Commission (1988) 73 ALJR 232. These submissions have failed in the above cases. They were viewed as being frivolous and as disclosing no cause of action. 

19 In Joose, for example, Hayne J was called upon to consider the validity and operative effect of the Income Tax Assessment Act and a number of related taxation statutes including the Income Tax Assessment Act 1997. The argument advanced there was that there had been a break in sovereignty in Australia with the consequence that much of the legislation purportedly passed by the Australian Parliament was invalid. This argument depended primarily upon the invalidity or inoperativeness of the Australian Constitution. However, it was also argued that the Royal Assent had not been validly given to the Acts in question. Furthermore, it was submitted that when Australia signed the Treaty of Versailles as a recognised and independent sovereign entity, the Australian Constitution ceased to have effect. His Honour found, at 235, that the points it sought to “agitate” were “not arguable” and also that none of the applicants identified a point having sufficient merit to warrant removal of the cause concerned into the High Court. 

20 Justice Hayne’s comments were cited with approval by O’Keefe J in Matchett. In Matchett it was submitted before Justice O’Keefe, amongst other things, that the Income Tax Assessment Act was invalid as the Australian Constitution, which was the purported source of power, was not valid or operative in 1936 and hence all legislation purportedly passed under it was of no effect. After reviewing the authorities, His Honour said at para 24: “If there is any substance whatsoever in the arguments advanced by Mr Levick, it is inconceivable that the High Court would have overlooked the dramatic consequence that would flow from them being correct.” 

21 The same situation as Joose applies here. There is no utility in removing this matter to the High Court. 

22 Generally speaking, it is long received wisdom in this country that the Commonwealth of Australia Constitution Act (UK) came into force on July 9, 1900: see Booker K, Glass A & Watt R Federal Constitutional Law, Butterworths 1998. The colonies of Australia became federated from the first day in January 1901, the date set by a proclamation issued in accordance with covering clause 3 of the Constitution Act. The Statute of Westminster 1931 (UK) and the subsequent Australia Act 1986 (Cth) removed any fetters that remained upon the Commonwealth to legislate in its own right. Further, under section 2 of the Australia Act the legislative powers of each state include full power to make laws for the peace, order and good government of that State”. 

23 It is interesting to note from the list of authorities handed up by the plaintiff that as long ago as the reign of the Viking King Canute, son of Svein Forkbeard, grandson of Harold Bluetooth and great grandson of Gorm that similar sentiments were being espoused. History records Canute as the unifier of England after his defeat of Edmund Ironside at the battle of Ashingdon and legend has it that, to rebuff the constant flattery of his courtiers, who claimed that nothing in this world would disobey him, he commanded the sea to stop rolling. This of course did not happen and Canute’s courtiers were suitably chastened. This ancient tale, however, while enthralling, is of no relevance in these proceedings, except to say that the plaintiff’s claim in some ways also represents a similar attempt to command the sea to stop rolling.