Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation [2001] HCA 26

In Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation [2001] HCA 26 the applicant resisted a statutory demand by the Deputy Commissioner of Taxation for unpaid taxes. The contention was that the Income Tax Assessment Act 1936 (Cth) was enacted under the Constitution, which is the legislation of a foreign power according to Sue v Hill (1999) HCA 30, and that ‘an independent sovereign State cannot be controlled by foreign legislation’. It was also submitted that ‘a sovereign independent power cannot have laws enacted by a foreign parliament’ and that the ‘moment Australia attains sovereignty laws enacted by a foreign power cease to have effect’. The court held that the grounds were “utterly unsustainable“, and had been advanced by other parties on other occasions and had invariably been rejected by several courts in this country.

The court investigated the source of these contentions, and the applicants relationship with a group called the Institute of Taxation Research who were subsequently joined as a party to the proceedings and ordered to pay the costs of the respondent. It was recognised that Ian Henke was the controlling mind and Executive Director of the Institute of Taxation Research, and that he acted in an entrepreneurial way in soliciting “clients” by paying commissions to people who introduced “clients” to them. Arundel was at all material times controlled by Dr Brown, who had acted as an agent on behalf of the Institute of Taxation Research to find such clients. When asked how much he was paid, he replied “…it would have been probably in the order of about $12,000, something like that.” The court noted:

“I do not doubt that ITR is a money-making enterprise and that he stood to, and wished to gain from the promotion of proceedings of the kind which Arundel brought here.  It may well be that he also genuinely holds a conscientious belief that he and those gullible people who rely upon ITR are pursuing a cause for the benefit of other Australians.  Even if that be so, such a belief cannot justify or excuse the conduct of ITR, particularly as Mr Henke well understands the consequences of activities of the kind which ITR has promoted.”

See also Arundel Chiropractic v Deputy Com of Tax [2000] HCATrans 489

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