Finally the truth is out concerning the extraordinary behaviour of Attorney-General and Liberal Senator for Queensland, George Brandis.
Exhibit A surfaced as the principal reason Brandis wanted to force the then Solicitor-General of the Commonwealth of Australia, Justin Gleeson, from office…..
BELL GROUP N.V. (IN LIQUIDATION) v WESTERN AUSTRALIA;
W.A. GLENDINNING & ASSOCIATES PTY LTD v WESTERN AUSTRALIA;
MARANOA TRANSPORT PTY LTD (IN LIQ) v WESTERN AUSTRALIA
[2016] HCA 21
Today the High Court unanimously held that the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) ("the Bell Act") is invalid in its entirety by the operation of s 109 of the Constitution because of inconsistency between its provisions and provisions of the Income Tax Assessment Act 1936 (Cth) and the Taxation Administration Act 1953 (Cth) (collectively, "the Tax Acts").
In November 2015, the Parliament of Western Australia enacted the Bell Act "to provide a legislative framework for the dissolution, and administration of the property, of The Bell Group Ltd ACN 008 666 993 (In Liquidation) and certain of its subsidiaries and for related purposes". The Bell Act was enacted to deal with a list of companies, each defined in the Bell Act as a "WA Bell Company" and each either in liquidation or deregistered. The Commonwealth is a substantial creditor of a number of WA Bell Companies in respect of taxation liabilities.
The purported legal operation and practical effect of the Bell Act is that the State of Western Australia ("the State") collects, pools, and vests in a State authority, the property of each WA Bell Company. The State then determines in its "absolute discretion" who is paid an amount or has property transferred to or vested in them out of the pooled property (if anyone). To the extent that the State chooses not to distribute the pooled property of the WA Bell Companies, the surplus vests in the State.
In each proceeding, the parties stated a special case and questions of law arising for the opinion of the Full Court. The questions of law include whether the Bell Act (or certain provisions of the Bell Act) is invalid by the operation of s 109 of the Constitution because of inconsistency with one or more provisions of the Tax Acts.
By majority, the High Court held that the Bell Act purports to create a scheme under which Commonwealth tax debts are stripped of the characteristics ascribed to them by the Tax Acts as to their existence, their quantification, their enforceability and their recovery. The rights and obligations which arose and had accrued to the Commonwealth as a creditor of the WA Bell Companies in liquidation, and to the Commissioner of Taxation, under a law of the Commonwealth prior to the commencement of the Bell Act are altered, impaired or detracted from by the Bell Act. That alteration or impairment of, or detraction from, the Tax Acts engages s 109 of the Constitution which operates to render the offending provisions of the Bell Act invalid. It was not possible to read down offending aspects of the Bell Act nor were the offending provisions able to be severed from the rest of the Bell Act. The Court held, therefore, that the Bell Act is invalid in its entirety. That being so, the Court found it unnecessary to consider other challenges to the validity of the Bell Act.
This statement is not intended to be a substitute for the reasons of the High Court or to be used in any later consideration of the Court's reasons.
And the mainstream media filled in the blanks in what is looking increasingly like an abuse of ministerial power on the part of the Attorney-General as well as a behind the scenes attempt to flout the Australian Constitution……
A secret political deal between the Federal and State governments to let WA claw back $1 billion from Alan Bond's collapsed Bell Group was torpedoed by submissions made by Solicitor-General Justin Gleeson on behalf of the Australian Tax Office.
It is understood Mr Gleeson's submissions were critical in events that led to his resignation last month.
A senior Federal source told The West Australian that Attorney-General George Brandis verbally instructed Mr Gleeson earlier this year, as counsel for the A-G, not to run a particular argument in the High Court when a Bell creditor and its liquidator challenged the constitutionality of WA's attempt to take control of the group's $1.8 billion.
The West Australian understands Senator Brandis told Mr Gleeson an understanding had been reached between the Federal and WA governments to finally end more than two decades of litigation stemming from the group's collapse.
The ATO, which at nearly $300 million was one of Bell's four main creditors, separately approached the Solicitor-General to also act as its counsel and to run the argument for it.
Despite Senator Brandis' instruction, the ATO's written submission to the High Court — authored by Mr Gleeson — used the precise legal argument that the Attorney-General had assured his State counterpart Michael Mischin would be avoided by the Commonwealth.
"Mr Gleeson advanced an argument that caused the WA Government to think the Commonwealth had acted in bad faith," the senior Federal source said.
Mr Mischin was infuriated by the ATO's move, not only because its argument in the High Court was on a basis the Commonwealth had promised not to advance, but because he thought the tone of the agency's submission professed WA's ignorance of the Constitution.
In fact, the Commonwealth was kept well abreast of the State's intentions, with WA openly discussing the constitutional issues concerning its legislation and even sharing early drafts.
WA Treasurer Mike Nahan had received personal and written assurances early last year from then Federal counterpart Joe Hockey that the Commonwealth would not oppose the State Governments move.
On the weekend of April 2-3, just two days before the High Court hearing, Mr Mischin repeatedly called Senator Brandis and Assistant Treasurer Kelly O'Dwyer to seek an agreement that would avert Commonwealth involvement in the case — but to no avail.
The ATO was heard in the High Court case with its arguments — that the WA laws were inconsistent with Federal tax law — used to effectively "kill" the State's legislation.
On April 12, five days after the High Court had heard the case, Mr Mischin and Senator Brandis had what witnesses say was a "blazing row" when the two attorneys-general met in Perth. Mr Mischin told Senator Brandis he was unhappy that the Commonwealth intervened in the case on the grounds pursued in court.
On May 16, the High Court ruled 7-0 that the legislation, which sought to elevate the Insurance Commission of WA to the front of the queue of creditors, was "invalid in its entirety".
It led to Senator Brandis believing Mr Gleeson, as the second law officer, had disobeyed instructions from him, the first law officer, the Federal source said.
On May 4, Senator Brandis issued a directive that any department or agency seeking legal opinion from the Solicitor-General must first get Attorney-General approval…..
…..Senator Brandis believed Mr Gleeson should have acted as the Government's barrister, acting within the confines of the Attorney-General's instructions, Mr Gleeson appears to have seen his role differently.
During a recent parliamentary inquiry, Mr Gleeson said the Solicitor-General was both independent and a key element of the government.
"The Solicitor-General is independent. The independence is protected by the statute," Mr Gleeson said.
"The Solicitor-General has an important role in assisting ... the Government to uphold the rule of law for the benefit of the whole community."
In his written submission to the inquiry, Mr Gleeson said it was "critically important" that those seeking advice from the Solicitor-General do so in an "uninhibited fashion and in respect of questions framed by them and not by others".
Mr Gleeson's view was supported by previous solicitors-general Dr Gavan Griffith QC and Sir Anthony Mason, a former High Court chief justice, and upheld by the majority report of the parliamentary inquiry. At a Senate estimates hearing in October, the tax office second commissioner Andrew Mills said it would have been strange if the ATO had failed to be part of the High Court action.
"In fact, the basis on which the litigation was being undertaken by that creditor relied on parts of the Tax Act, so it would seem strange for us not to be involved," he said.
Mr Mills said that when the ATO became aware of the details of the legislation, it believed it had a responsibility to see if the laws were constitutional and to "protect the position of the Commonwealth".
WA Attorney-General Michael Mischin has denied he had a deal with his federal counterpart to keep the Commonwealth out of the state government's bid to claw back $1 billion from Alan Bond's collapsed Bell Group.
His denial comes despite WA Treasurer Mike Nahan telling parliament the day after the High Court shot down the Bell Group legislation in May that the state government thought it had a deal.
It's time for Prime Minister Malcolm Turnbull to retire this Abbott-era attorney-general to the back bench, from where he can be constrained and so do less harm to the nation.
BACKGROUND
At issue is a move by
Senator Brandis – a few days before the election was called – to stop
Solicitor-General Justin Gleeson, SC, from providing advice to any arm of the
government without Senator Brandis giving him approval.
The advice of a
solicitor-general can be crucial in politically contentious issues faced
by the government – such as on asylum seeker policy. But
it also provides advice directly to a range of government entities
from the office of the Governor-General to the Australian Taxation Office.
On May 4,
Senator Brandis's office sent Mr Gleeson a letter outlining
directions that were tabled in the Senate that day, with immediate effect, and
which ruled that no one in government, including the Prime Minister, could
seek the Solicitor-General's advice without getting permission from Senator
Brandis.
What made the direction
more disturbing for the legal bureaucracy of Canberra was that a range of
officials – including the Office of Legal Services Coordination in the
Attorney-General's Department - were instructed not to consult the
Solicitor-General or his office, or to notify him of the change.
The Office of
Parliamentary Counsel – which has the job of putting the government's legal
wishes into legislative form – raised concerns with Senator Brandis's
department that neither Mr Gleeson nor his office had been consulted about the
move and this might not be consistent with the Law Officers Act 1964 which sets
out the Solicitor-General's responsibilities.
What was more, it
emerged that officials within the Australian Government Solicitor's
office had also not been consulted and had concerns about how the new
directive might work in practice.
The Australian Financial
Review has been briefed on an extensive record of correspondence,
meeting minutes and reports about the behind-the-scenes meetings about the
directive..
Senator Brandis told the
parliament in the explanatory memorandum accompanying the new restrictions that
Mr Gleeson had been consulted about the new guidelines.
But it has now emerged
that Mr Gleeson wrote a letter to Senator Brandis on May 11
– via an email to two of Senator Brandis's advisers and to a
departmental liaison officer - that was widely copied within the
bureaucracy noting that he did not accept that he had been consulted, as
Senator Brandis had asserted.
The letter effectively
meant the Solicitor-General was warning the Attorney-General that he had misled
parliament……
Legal sources say the
move comes at a time when it has also become the practice that senior counsel
in the Attorney-General's department has been working to an instruction that
advice should only be provided to the Attorney-General's office in
draft form, so it can be asserted advice has never been formally received – an
extension of a tendency by Senator Brandis to intervene in the
independence of agencies within his portfolio.
There are plenty of
theories about why the relationship between the two men is frosty, ranging from
Mr Gleeson's advice to the ATO on a High Court challenge to West Australian
Government legislation, to altercations over same sex marriage and citizenship
laws, to advice over the proroguing of parliament.
The High Court case
involved Barnett government legislation that would have allowed a
government agency to take control of the assets of the Bell Group (in
liquidation).
In a submission in the
case lodged on behalf of the ATO (a Bell creditor for $300 million in unpaid
taxes), Mr Gleeson argued the drafter of the state's Bell Group seizure laws
either forgot about federal tax law or "decided to proceed blithely in
disregard to its existence".
The High Court
overturned the WA legislation on May 16.
