Assaf and Tax Practitioners Board (Taxation)
[2020] AATA 4965
•9 December 2020
Assaf and Tax Practitioners Board (Taxation) [2020] AATA 4965 (9 December 2020)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2020/5155
Re:Ali Assaf
APPLICANT
Tax Practitioners BoardAnd
RESPONDENT
DECISION
Tribunal:Deputy President B W Rayment OAM QC
Date:9 December 2020
Place:Sydney
The application for a stay order is refused. The interim stay order dated 15 September 2020 be discharged as of the date of this decision.
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Deputy President B W Rayment OAM QC
CATCHWORDS
PRACTICE AND PROCEDURE – stay application – where matters in Scott and Australian Securities and Investments Commission [2009] AATA 798 considered – where tax liabilities may be reduced on appeal – whether in the public interest – where applicant will not take on new clients until determination of application – whether appointing another registered tax agent will assist – stay refused
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 41
Tax Agent Services Act 2009 (Cth) ss 40-5, 60-125
CASES
Civil Aviation Safety Authority v Hotop [2005] FCA 1023
Scott and Australian Securities and Investments Commission [2009] AATA 798
Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047
REASONS FOR DECISION
Deputy President B W Rayment OAM QC
9 December 2020
Application is made by the applicant to stay the decision of the respondent (‘the Board’). The Board decided that the registration of the applicant as a tax agent be terminated in accordance with ss 60‑125(2)(b)(ii) and 40-5(1)(b) of the Tax Agent Services Act 2009 and that the applicant may not apply for registration for a period of three years. The stay is sought pending the hearing and determination of the application to review that decision.
The application is made under s 41(2) of the Administrative Appeals Tribunal Act 1975 (‘the Act’), which is in the following terms:
(2)The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relations or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
The Federal Court examined that provision in Civil Aviation Safety Authority v Hotop [2005] FCA 1023 in the course of considering whether it permitted the Tribunal to make an order having positive effect. During the course of discussing that question, Siopis J said at [46]–[49]:
Third, the argument advanced by Senior Counsel for the applicant, would substantially undermine the Tribunal’s capability to provide effective relief in cases where the operation of the impugned decision would result in the applicant for review having to cease carrying on an existing business pending the hearing of the application for review. The difficulties facing a review applicant that is not allowed to continue in business pending the hearing of an application were described by Tamberlin J in Shi [v Migration Institute of Australia Ltd (2003) 134 FCR 326]. He said at 333:
‘It is evident that if a decision favourable to an applicant is made by the AAT in relation to the application to renew, then the agent in this case will have been wrongfully deprived of the opportunity to earn his livelihood from that time up to the time of the favourable determination. There may also be damage to his practice and reputation. There is no provision for the recovery of this loss or for any disruption to the practice, or loss of reputation or goodwill. A favourable decision to the applicant by the AAT would also mean that the applicant had been wrongfully refused registration and these are important considerations; see the remarks of Davies J in Dekanic v Tax Agents’ Board (NSW) (1982) 6 ALD 240 at 242‑243. These observations were applied in Re Nelson and Tax Agents’ Board (Qld) (1993) 30 ALD 317.
If the applicant in the present case is not granted a stay, the effectiveness of the hearing and determination of the application for review will be diminished.’
Similar sentiments were expressed by the first respondent in his reasons for decision to which I have referred above, and by Deputy President Handley in the case of Re Medtest Pty Ltd and Minister for Health and Ageing [2002] AATA 317 where he said:
‘I am concerned…that unless a stay order is granted, the utility of the hearing will be significantly undermined if there is a possibility of the Applicant being put out of business.’
Section 15AA of the Acts Interpretation Act 1901 (Cth) provides that:
‘(1)In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.’
The purpose of [the Act] is to afford a review applicant an effective means of obtaining a merits review of an administrative decision (Collector of Customs (New South Wales) v Brian Lawlor Automotive Pty Ltd [1979] 41 FLR 338 at 367‑368). I agree with the tenor of the dicta of Tamberlin J, Deputy President Handley and the first respondent referred to above. I am of the view that a construction which would afford the Tribunal the power to make orders under s 41(2) of [the Act] to positive effect in the sense referred to above, would be a construction which promotes the purpose of [the Act], and is to be preferred over a construction which would deny the Tribunal such a power.
In Scott and Australian Securities and Investments Commission [2009] AATA 798, Downes J, then President of this Tribunal, observed at [4] that:
Application having been made for a stay of proceedings under s 41 of the Administrative Appeals Tribunal Act 1975, it is nevertheless incumbent upon me now to consider whether a stay is appropriate. In considering the application, it is appropriate for me to consider a range of matters, including:
1The prospects of success.
2The consequence for the applicant of the refusal of a stay.
3The public interest.
4The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.
5Whether the application for review would be rendered nugatory if a stay were not granted.
6Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.
His Honour’s list of relevant matters to be taken into account under s 41(2) of the Act has often been applied in applications under s 41(2) of the Act and I do so in this case. The prospects of success are inevitably a relevant matter, even though the application for a stay is an interlocutory proceeding. A seriously arguable case need not necessarily be shown by an applicant, although if such a case were made, it would undoubtedly be of assistance to an applicant. An applicant for an interim injunction would need to show a seriously arguable case but would usually be required to give an undertaking as to damages. The power of the Tribunal to receive an undertaking as to damages is absent, as would be the Tribunal’s power to enforce any such an undertaking. Perhaps in recognition of those facts, s 41(2) of the Act requires the Tribunal, when considering the grant of a stay or making an order otherwise affecting the operation or implementation of the decision in question, to take into account the interests of any persons who may be affected by the review before making any such order.
In one of the cases in this Tribunal, Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047 (‘Technical Education’), Senior Member Cameron, applying earlier decisions, remarked that while it is not necessary to conduct a preliminary hearing (sometimes referred to as a “mini trial”), the task of the Tribunal is to consider whether there exist facts and circumstances to provide some basis for success. While there is no onus of proof in the circumstances of a stay application, one would expect a party to ‘put their best foot forward’ at any rate in a case where the applicant is legally represented. Those remarks are not inconsistent with the wide language in which the discretion conferred by s 41(2) of the Act is expressed.
The Board took action against the applicant after the Commissioner of Taxation (‘the Commissioner’) determined that the applicant under-reported his personal income and caused Quest Business Advisors Pty Ltd (‘Quest Business’) to fail to declare substantial taxable supply amounts for GST and in failing to declare for four financial years taxable supply amounts for GST purposes. The Commissioner also determined that the applicant caused Quest Capital Management Pty Ltd (‘Quest Capital’) to fail to declare taxable supply amounts of GST between 2017 and 2018 and that he failed to lodge BAS reports for both Quest Capital and Quest Business over a number of years.
In addition, the applicant had failed to lodge income tax returns over three years when due. Also, impliedly in 2017, and expressly in 2018, he falsely stated to the Board that he had no overdue personal tax obligations.
The applicant’s case, as enunciated on his behalf by counsel, was that the various tax imposts and findings by the Commissioner are in dispute with him. As to the false declarations, they were made in haste and he regrets their falsity.
While it is relevant that there is apparently to be some contest in the Tribunal as to the tax liabilities, I regard the case put forward on the present application as insufficient to satisfy me that the applicant has a basis for success on his review either against the Commissioner or against the Board, to use the language favoured in Technical Education.
The false declarations are not a good starting point for the applicant, when one considers that the question to be decided on review relates to his honesty, and an ultimate question on review will relate to his general honesty and good character.
The public interest may be adversely affected by the grant of a stay. To merely leave in place the conditions imposed by Deputy President McCabe when an interim stay was granted pending the making of the present application for a stay, conditions which would permit the applicant to carry on his profession or business without accepting new clients, may insufficiently protect the public interest. If the Board’s decision is ultimately upheld, clients whose affairs handled by the applicant, in the meantime, may not have their affairs handled diligently or properly. The applicant’s own returns were not filed for three years.
Some payments by instalments are being made by the applicant to the Commissioner by agreement in relation to the liabilities already found against him. However, that does not repair the failure to put the Tribunal in a position of having some confidence that the application for review has merit. As to his personal tax affairs, they are presently at the objection stage and have not yet reached the Tribunal or the Federal Court.
Similarly, an intention to be mentored in the time between now and the hearing of the review is not sufficiently precise to satisfy me that the public interest will not be adversely affected if a stay is granted.
On the question of whether a stay is necessary to secure the effectiveness of the hearing and determination of the review, I have insufficient information about the resources available to the applicant or the possibility of employing a registered tax agent to operate his business in his place pending the hearing and determination of the review.
In the circumstances, the stay will be refused, and the interim stay will be terminated forthwith.
I certify that the preceding 16 (sixteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President B W Rayment OAM QC
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Associate
Dated: 9 December 2020
Date(s) of hearing: 5 November 2020 Counsel for the Applicant: Mr W Marshall Solicitors for the Applicant: KDA Legal Counsel for the Respondent: Mr T Arnold Solicitors for the Respondent: Tax Practitioners Board
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