Money Tree Management Service Pty Ltd v Deputy Commissioner of Taxation (No 3) [2000] SASC 286; 45 ATR 262

In Money Tree Management Service Pty Ltd v Deputy Commissioner of Taxation (No 3) [2000] SASC 286; 45 ATR 262 the appellants raised a challenge against the validity of the commission and appointments of the Office of Governor and Chief Justice.

“That the judicial commission of his Honour the Chief Justice issued by the Governor of the State of South Australia in May of 1995 pursuant to the purported authority granted to Her by Letters Patent dated the 14th of February, 1986, which Letters Patent were gazetted in the State of South Australia on the 6th of March, 1986 and issued under the authority of the Great Seal of the United Kingdom purportedly establishing the office of the Governor of the State of South Australia is invalid ab initio in that the operation of the Letters Patent is contrary to the Australia Act, 1986 (Cwth.) and in particular Section 10 thereof which terminated the involvement of the United Kingdom in the government of the States as of and from the commencement of the Australia Act, 1986 (Cwth.), namely the 3rd of March 1986.”

The court held that there was nothing in the Australia Act which impinges upon the validity of the Letters Patent:

“As the Chief Justice noted in his reasons for judgment published on 1 March 2000, the arguments advanced by Money Tree in this case are substantially the same as arguments considered by Hayne J in Helljay Investments Pty Ltd v Deputy Commissioner of Taxation(1999) 74 ALJR 68 and Joosse v Australian Securities and Investment Commission (1998) 73 ALJR 232. One argument which attacked the validity of the Income Tax Assessment Act was identical with an argument dismissed by Hill J in Deputy Commissioner of Taxation v Levick (1999) 168 ALR 383. The Chief Justice adopted the reasoning of Hayne J and Hill J in those decisions. Other arguments raised by the applicant are dealt with by the Chief Justice in paras 18 to 24 of his reasons. His Honour held that there was simply no substance in the applicant’s argument. I respectfully agree. I add that the Chief Justice is clearly correct. There was no merit in any of the arguments advanced in support of the application. That conclusion is reinforced by the fact that several judges, including three judges of the High Court, have also decided that the arguments relied on are untenable. In addition to the decisions of Hayne J in Helljay and Joosse, two applications based on similar grounds were decided in the High Court after the Chief Justice had published his reasons. Both applications were dismissed, the first by McHugh J in Greer v Deputy Commissioner of Taxation (unreported, 26 April 2000) and the second by Gummow J in McKewins Hairdressing and Beauty Supplies Pty Ltd v Deputy Commissioner of Taxation (2000) 171 ALR 335. It is pertinent to add that all or, if not all, almost all, of those applications are based on documents prepared by ITR. Those arguments have been consistently rejected in the decision to which I have referred. To the extent that the notice of appeal seeks to advance arguments led before the Chief Justice, I think they are bound to fail.”

Mr Peter Kerin, the solicitor for Money Tree, and Institute of Taxation Research Pty Ltd was joined as parties to the proceedings, and a costs order was made against each of them. The court noted:

“It must also be remembered the purpose of this principle is not punitive or disciplinary.  Instead, its purpose is to compensate the client. … evidence shows it was ITR, not Money Tree, which decided to institute the appeal by Money Tree. Once the decision had been made, Money Tree was asked if it would authorise the appeal, and it did so. Its authorisation does not alter the fact that it was ITR’s decision to institute the appeal. It is also apparent that Money Tree has little or no understanding of the issues. Neither Money Tree, nor any officer of the company, has made any contribution to the content of the notice of appeal. The notice of appeal was drawn by Mr Kerin after receiving instructions from ITR. Mr Kerin says that ITR would be paying his costs. More accurately, the evidence was that he hoped that ITR would be paying his costs. Although Mr Kerin said that his client is Money Tree, it is apparent that he is also acting on behalf of ITR in prosecuting this appeal.

Mr Kerin is aware of the decisions of Hayne J in Helljay and in Joosse and of the decision of the Full Federal Court in Levick. He is aware of the fact that the arguments of ITR have been described by Hayne J as “manifestly untenable”. Mr Kerin has drafted the notice of appeal for Money Tree, not on the instructions of Money Tree, but on the instructions of ITR. He has not advised Money Tree of the hopelessness of the case. It is apparent that Money Tree has no idea of the fact that it has no prospects of success. This is not a case of a client seeking to pursue a hopeless case against the advice of its solicitor. Instead, it is a case of a solicitor taking a quite unreasonable step which has no prospect of success and on behalf of a person who is not the appellant. It is an abuse of process in that the appeal has been instituted without any, or indeed, any proper, consideration of its prospects of success. No thought has been given to the position of Money Tree or its liability to costs if it should fail. Money Tree has not been advised of its potential liability for costs. There is a serious dereliction of a duty to Money Tree.

The arguments which are advanced are arguments which plainly stem from ITR. That is evidenced by the fact that the appeal instituted by ITR contains grounds very similar, if not at times identical grounds, to the grounds of appeal included in the Money Tree notice of appeal. These are arguments which have plainly originated with ITR or with its lawyers. Mr Kerin is now one of those lawyers. He drafted this notice which includes grounds which are clearly untenable.”

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See also Money Tree Management Services Pty Ltd v Deputy Commissioner of Taxation [2000] SASC 54, Money Tree Management Services Pty Ltd v Deputy Commissioner of Taxation (No 2) (2000) 207 LSJS 287, Money Tree Management Services Pty Ltd & Institute of Taxation Research v Deputy Commissioner of Taxation (No 4) [2000] SASC 313, Money Tree Management Services Pty Ltd & Institute of Taxation Research v Deputy Commissioner of Taxation (No 5) [2000] SASC 314 and Money Tree Management Services Pty Ltd & Anor v Deputy Commissioner of Taxation (No 6) [2000] SASC 315. The Institute of Taxation Research filed a notice of appeal against their being joined in Money Tree Management Services Pty Ltd & Institute of Taxation Research v Deputy Commissioner of Taxation [2000] SASC 345 but it was dismissed.

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