IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
No. QG 7309 of 1998
In the matter of DAVID C KEENAN
DEPUTY COMMISSIONER OF TAXATION
DAVID C KEENAN
I refer the court to my Notice of Intention to Oppose Petition and Affidavit Supporting Grounds of Opposition filed on the 24th of September 1998 and my Further Affidavit Supporting Grounds of Opposition filed on the 27th of April 1999.
1. Under section 52 (2) of the Bankruptcy Act this honourable court has a discretion to dismiss the petition if it is satisfied that I am able to pay my debts, or there is some other sufficient cause why an order ought not be made.
2. I respectfully submit that this discretion be exercised to dismiss the petition for the following reasons.
2.1 I submit that "able to pay" does not mean "able and willing to pay" (Sarina v. Council of the Shire of Wollondilly (1980) 48 FLR 372). I believe that the facts contained in my affidavits and their annexures establish my solvency. I am able to pay my debts as they come due because I have equity in property which is substantially in excess of my debts, and for purposes of immediate payment I have a $10,000 line of credit available to me.
2.2 Freedom of Conscience
2.2.1 I am unwilling to pay this debt because to do so would, for me, be morally wrong and would offend against my conscience. I have a conscientious objection to paying for weapons or for people to use those weapons. Australia's defence is at present entirely military, that is, it is based on the readiness to kill. So since March 1990, I have been withholding 10% of my income tax, the defence proportion, and redirecting it to organisations supporting research into nonviolent or civilian-based defence, or measures aimed at preventing or nonviolently resolving international conflicts. I have politely explained this to the Deputy Commissioner of Taxation, in writing, on every occasion.
2.2.2 The figure of 10% is calculated as follows. From the annual Federal Budget it is possible to determine the proportion of consolidated revenue going to the defence function. It is also possible to determine, from the budget, the proportion of consolidated revenue that comes from income tax versus indirect taxes. Last year approximately 8.7% of consolidated revenue went to the defence function, and assuming that I contributed an average amount via indirect taxes, this corresponds to approximately 10% of my income tax. In past years this figure was slightly higher. I have not redirected more than 10% of my tax.
2.2.3 In relation to the current judgment debt of $8952.51, the total amount I have redirected is $5202.46. Due to provisional tax plus PAYE tax exceeding the tax payable for 97/98, this original part of the debt has reduced to $3372.70. The remaining $5579.81 consists of the court costs for the judgment, and the penalty tax and interest accumulated over 8 years.
2.2.4 I would gladly pay the original part of the debt to the Deputy Commissioner of Taxation if I could be guaranteed that it would not be spent for military purposes. This would be the case if a Peace Trust Fund were established by Parliament in the manner proposed in the private members bill of Senator Jo Vallentine in 1989. But in its absence I must decide for my self, as best I can, where the money should be spent. I am still determined that it should be spent for the purpose of enhancing Australia's security as Parliament intended. My affidavit sets out the amounts paid and the organisations it was paid to. Both of these organisations in turn, supported the work of Dr Robert Burrowes whose book The Strategy of Nonviolent Defense: A Gandhian Approach was published in 1996. I recently learned that a copy of this book now graces the shelves of the Australian Defence Force Academy Library. This year I have used 10% of my taxes to purchase books and a journal subscription on nonviolent defence and conflict resolution, which I will donate to the Australian Defence Force Academy Library. I believe this establishes, without a doubt, my willingness to continue to contribute to Australia's defence, to the degree determined by Parliament.
2.2.5 I rely on the International Covenant on Civil and Political Rights (ICCPR) and Section 116 of the Australian Constitution. I accept that the ICCPR does not form part of Australia's domestic law, despite Australia having signed and ratified it, and despite its appearance as a schedule to the Human Rights and Equal Opportunities Act.
2.2.6 In the High Court case of Mabo v. Queensland (No. 2) (1992) 175 CLR 1 at 42, Brennan J. states:
"The opening up of international remedies to individuals pursuant to Australia's accession to the Optional Protocol to the International Covenant on Civil and Political Rights (68) See Communication 78/1980 in Selected Decisions of the Human Rights Committee under the Optional Protocol, vol.2, p 23 brings to bear on the common law the powerful influence of the Covenant and the international standards it imports. The common law does not necessarily conform with international law, but international law is a legitimate and important influence on the development of the common law, especially when international law declares the existence of universal human rights."
2.2.7 The human right that I am asking you to consider is contained in Article 18 of the ICCPR.
"1. Everyone shall have the right to freedom of thought, conscience and
religion. This right shall include freedom to have or to adopt a religion or
belief of his choice, and freedom, either individually or in community with
others and in public or private, to manifest his religion or belief in
worship, observance, practice and teaching.
2. No one shall be subject to coercion which would impair his freedom to have
or to adopt a religion or belief of his choice.
3. Freedom to manifest one's religion or beliefs may be subject only to such
limitations as are prescribed by law and are necessary to protect public
safety, order, health or morals or the fundamental rights and freedoms of
2.2.8 This right is recognised in our Defence Act 1903 in regard to conscientious objection to military service, where "conscientious belief" is defined as:
"(3) For the purposes of Part IV, a person is taken to have a conscientious
belief in relation to a matter if the person's belief in respect of that
(a) involves a fundamental conviction of what is morally right and morally
wrong, whether or not based on religious considerations; and
(b) is so compelling in character for that person that he or she is duty
bound to espouse it; and
(c) is likely to be of a long standing nature."
2.2.9 Section 116 of the Australian Constitution contains the provision that
"the Commonwealth shall not make any law for ... prohibiting the free exercise of any religion ...".
2.2.10 My redirection of tax away from military uses, to other means of enhancing Australia's security, is a manifestation of my religion and belief in practice. I submit that to make a sequestration order against me would be to subject me to "coercion which would impair [my] freedom to have or adopt a religion or belief of [my] choice", and would unconstitutionally prohibit the free exercise of my religion.
2.2.11 Now clearly, if my religion involved human sacrifice its free exercise would not be permitted, however mine is entirely the opposite, attempting to avoid human sacrifice, and its free exercise would not infringe the rights of anyone.
2.2.12 This manifestation of my religion and belief is not limited under ICCPR Article 18 part 3 since it does not threaten public safety, order, health or morals or the fundamental rights and freedoms of others. I ensure this by ensuring that my redirected tax is not more than that part of my total taxes which the government would spend on defence, and that it continues to be spent on defence, albeit of a nonviolent kind.
2.2.13 One might be tempted to claim that there is no logical connection between military service or military expenditure and payment of taxes; or that I am somehow morally absolved by the passage of my money through consolidated revenue, and therefore my position is irrational. I learnt recently that under Greek law, which requires compulsory military service for most adult males, Law No. 2510 allows certain categories of draftee to discharge part of their draft obligation by paying a fee to the State. The law specifies that this fee goes into consolidated revenue. Conscientious objectors are not required to pay a fee, and must do alternative civil service. One must assume that the Greek legislators are not being irrational in recognising the same equivalence that I do.
2.2.14 My situation is the reverse of that for Greek conscientious objectors. In Australia, I am not given the option of alternative civil service, since there is no draft, and instead my money is forever drafted with no consideration given to my conscientious objector (CO) status.
2.2.15 I am confident that I would qualify for CO status according to the Defence Act, but this is considered irrelevant except in time of war. It seems ironic that our Tax Act does not come up to the same standard of human rights and morality as our Defence Act.
2.2.16 My affidavit attests to facts which prove that my belief is "likely to be of a long standing nature". Namely that I have had such beliefs since childhood and continue the beliefs of my parents in this regard. I have also been an editor of the magazine Nonviolence Today for the past 14 years. I did not redirect my taxes prior to 1990, at first because I was not fully aware of my complicity through paying of taxes, but also because I had no option under the PAYE (pay as you earn) system. As it was, I made my redirection retrospective, as best I could estimate. I have asked the tax office for a statement of account from 1974 to 1990 but it has not been forthcoming.
2.2.17 I wish to examine the decision in the bankruptcy case of an earlier conscientious objector, Dr Robert Burrowes. Dr Burrowes is Australia's foremost authority on nonviolent defence, whose work my redirected taxes have helped to support. Note that Dr Burrowes case differed from mine in that he did not attempt to establish solvency, and at the time the principle of giving consideration to the ICCPR had not been established. The sequestration order was granted.
2.2.18 In Re Burrowes; Ex parte DFC of T, (1991) 91 ATC 5021, Heerey J stated:
"In this country we elect Parliaments which may make laws which some people sincerely and honestly find distasteful or even abhorrent. Money may be spent for purposes of which some people most strongly disapprove. However, our system of democratic government assumes that an elected Parliament passes laws which have force in Australia and the rule of law requires that those laws be enforceable and does not give to individuals the choice of disobeying those laws because they happen to offend the individual conscience, however sincerely and rationally that conscience may be based."
2.2.19 Sometimes it is necessary for otherwise law-abiding citizens to deliberately break an unjust law in order to draw attention to the need to change it. Women's suffrage, the abolition of slavery and the right to conscientious objection to military service would undoubtedly have taken much longer, and might still not exist, if not for the civil disobedience of citizens of conscience. For me this is such a law.
2.2.20 But in any case, you are not being asked today to rule on the legality or otherwise of my actions in redirecting part of my tax, but merely to decide if it is in the best interests of Justice that I, a solvent person, who is quite competent to manage his own financial affairs, should be declared bankrupt and thereby suffer the indignity of having them taken over by a stranger, and to have my passport taken from me, and to be treated like a leper by financial institutions and suppliers.
2.2.21 Heerey J also said:
"While accepting the sincerity of Mr Burrowes' conscientious belief, other Australians may with equal sincerity believe the expenditure of public monies on the Armed Forces of this country is perfectly moral. Their views are also entitled to respect. In a democracy conflicts of this sort are resolved by the popular election of a legislature which makes laws binding on all citizens. The comment might also be made that there may be some Australian laws of which Mr Burrowes approves but which others strongly oppose, perhaps on grounds of individual conscientious belief."
2.2.22 Dr Burrowes and I agree wholeheartedly that views opposed to our own are entitled to respect. No one is suggesting that all Australian tax payers should be forced to direct their taxes away from military defence, or that military defence could be replaced overnight. However, particularly in this day of computers, it would be easy for the government to ensure that the defence part of the tax contribution of conscientious objectors was spent to enhance Australia's security by non-military means. All views would be respected, with no conflict. This would be similar in principle to the recent innovation of being able to direct one's electricity payments to the sourcing of renewable energy rather than fossil fuels.
2.2.23 I hasten to add, for the benefit of those who argue that this would open the floodgates to discretionary taxes of all kinds, that this particular objection to the use of one's taxes is a very special one. It involves what everyone agrees is the most serious moral question; "when is it right to kill a fellow human being?". This is already recognised in our Defence Act 1903.
2.2.24 I don't think anyone should be required by law to perform, against their will, an act that they rationally and conscientiously believe may contribute to the death of another human being.
2.2.25 In relation to bankruptcy, the general principle that I am arguing for today, is some version of the following:
It is rarely appropriate to bankrupt a solvent person. The Federal Court of Bankruptcy is not a debt collection agency. It is definitely inappropriate when the person's unwillingness to pay arises as the free exercise of his or her religion, or because he or she rationally and conscientiously believes that by paying the debt he or she may contribute to the death of another human being in violation of his or her conscience, and when he or she does not benefit materially in refusing to pay the debt, but attempts to spend the money in a way which is as consistent as possible with the use to which it would otherwise be put. This right is, if not a legal one, well supported by the ICCPR, the Australian Constitution and The Defence Act 1903.
This principle does not imply that the ICCPR is part of domestic law, nor does it imply that the respondent is acting within the law in refusing to pay the debt.
2.2.25 I submit that the basis of my objection to paying the judgment debt is genuine and rational, and recognised domestically and internationally, and that I have tried to discharge my conscience in a responsible fashion. I submit that my conscientious objection to paying the judgment debt, notwithstanding my ability to pay, is a sufficient cause that a sequestration order ought not be made, under section 52 (2).
2.3 Public interest
I submit that there is no public interest in bankruptcy in this case. As attested in my affidavit, I am quite solvent and the Deputy Commissioner of Taxation is the only creditor with an interest in bankruptcy.
2.4 Other means to collect debt
2.4.1 Since I am solvent, the Deputy Commissioner of Taxation has other means available, outside bankruptcy, for collecting the debt. These are the usual means of Execution and Garnishee.
2.4.2 The Creditors Petition filed by the Deputy Commissioner of Taxation on the 10th of August 1998, states "occupation unknown". This is incorrect. As stated on my 97/98 tax return, my main business occupation is Computer Consultant and my main salary and wages occupation is TAFE Teacher. I have a Master's degree in Computer Science and Certificates in Electronics & Communication, Renewable Energy Technology and Workplace Training. I am 39 years old and have a wife and two children aged 5 and 1.
My future is in your hands.
This submission is filed by DAVID C KEENAN.