Beckett and Tax Practitioner's Board
[2018] AATA 1860
•14 June 2018
Beckett and Tax Practitioner's Board [2018] AATA 1860 (14 June 2018)
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
)No: 2017/7416
TAXATION AND COMMERCIAL DIVISION )
Re: Barbara Beckett
Applicant
And: Tax Practitioners Board
RespondentDIRECTION
TRIBUNAL: Mr P W Taylor SC, Senior Member DATE OF CORRIGENDUM: 30 July 2018 PLACE: Sydney The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to insert “Counsel for the Respondent: Mr G O’Mahoney” on page 46 of the decision, directly above “Solicitors for the Respondent: Ms L Paolucci”.
……………[sgd]………………..
Mr P W Taylor SC, Senior MemberDivision:TAXATION & COMMERCIAL DIVISION
File Number: 2017/7416
Re:Barbara Beckett
APPLICANT
AndTax Practitioner's Board
RESPONDENT
DECISION
Tribunal:Mr P W Taylor SC, Senior Member
Date:14 June 2018
Place:Sydney
The decision under review is affirmed.
...........................[sgd].............................................
Mr P W Taylor SC, Senior Member
CATCHWORDS
Tax Practitioners – tax practitioners board – registration as a tax agent – whether applicant is a fit and proper person – applicant proffering false dated copies of bank cheques – non-disclosure of unsatisfactory professional conduct – decision affirmed
LEGISLATION
Broadcasting Act 1942 (Cth)
Crimes Act 1900 (NSW), ss 254, 319, 330
Crimes (Sentencing and Procedure) Act 1999 (NSW), ss 12, 33 & 55
Duties Act 1997 (NSW) ss 55, 97
Income Tax Assessment Act 1936 (Cth), ss s25BC(1), 251JA(1)(a), 251K
Land Tax Management Act 1956 (NSW) s 3A
Legal Profession Act 2004 (NSW) ss 40, 43, 98 & 406;
Legal Profession Act 2007 (Tasmania) s 9, 44, 45, 49, 53
Legal Profession Uniform Law (NSW) s 44, 45 & 211
Taxation Administration Act 1996 (NSW), s 37, 72Tax Agents Services Act 2009 (Cth) ss 2-5, 2-10, 20-5, 20-15(a), 20-15(b), 20-25, 20-45, 20-50, 30-10, 30-15, 30-35, 40-5, 50-5, 70-10, 90-5
CASES
A Solicitor v Council of the Law Society of NSW [2004] HCA 1 at [18]; (2004) 216 CLR 253
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Beckett v R [2014] NSWCCA 305; (2014) 315 ALR 295
Burnett v Tax Practitioners Board [2014] AATA 687; (2014) 99 ATR 456
Chamberlain v Australian Capital Territory Law Society (1993) 118 ALR 54
Ex parte Tziniolis; Re the Medical Practitioners Act (1966) 67 SR(NSW) 448
Frost Taxation Pty Ltd and Tax Agents’ Board of South Australia [2005] AATA 393; (2005) 87 ALD 794
Harris and Tax Practitioners Board [2014] AATA 430
Hourani and Tax Practitioners Board [2012] AATA 518, (2012) 58 AAR 104
Hughes and Vale Pty Ltd v State of NSW (No 2) (1955) 93 CLR 127
Irving v Minister for Immigration, Local Government and Ethnic Affairs (1996) 68 FCR 422
Jackson v Legal Practitioners Admission Board [2006] NSWSC 1338
Law Society of South Australia v McKerlie [2008] SASC 222
Legal Practitioners Conduct Board v Nicholson [2006] SASC 21
McKay v Tax Agents Board Tasmania [1994] AATA 113; (1994) 94 ATC 2057
Minister for Immigration and Ethnic Affairs v Baker (1997) 73 FCR 187
Plato Films Ltd v Speidel [1961] AC 1090
Prothonotary v Del Castillo [2001] NSWCA 75
R v Beckett [2015] HCA 38; (2015) 256 CLR 305
Re Carbery and Associates Pty Ltd and Tax Agents' Board of Queensland [2001] AATA 107; (2001) 46 ATR 1106; [2001] AATA 107
Re Davis (1947) 75 CLR 409
Re Kerin and Tax Agents’ Board (SA) [2009] AATA 764; (2009) 113 ALD 530
Sargent v Tax Agents Board of Victoria [2009] AATA 219; (2009) 75 ATR 495
SRBP and Tax Practitioners Board [2016] AATA 456; (2016) 103 ATR 708
Stasos v Tax Agents’ Board of New South Wales [1990] AATA 346; (1990) 21 ALD 437
Su v Tax Agents’ Board South Australia [1982] AATA 127; (1982) 61 FLR 1
Toohey v Tax Agents Board of Victoria [2008] FCA 1796; (2008) 106 ALD 506
Toohey and Tax Agents' Board of Victoria [2009] AATA 603
Toohey v Tax Agents' Board of Victoria (No 3) [2010] FCA 356; (2010) 78 ATR 905
Trevaskis and the Tax Practitioners Board [2013] AATA 301; (2013) 135 ALD 200Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279
SECONDARY MATERIALS
Explanatory Memorandum for the Tax Agent Services Bill 2008
REASONS FOR DECISION
Mr P W Taylor SC, Senior Member
14 June 2018
On 9 November 2017 (but with effect from 27 December 2017), the Tax Practitioners Board terminated Ms Beckett’s registration as a tax agent. The Board acted because it considered Ms Beckett did not meet the statutory “fit and proper person” registration requirement: – see Tax Agents Services Act 2009 (“TASA”) s 20-5. That opinion was based on two matters:-
(i)Ms Beckett’s 24 February 2017 convictions for proffering false dated copies of bank cheques in sworn evidence she gave in 2010 during a statutorily authorised examination and,
(ii)the non-disclosure, in her March 2017 annual declaration, of a February 2016 reprimand, for unsatisfactory professional conduct, by the Legal Profession Board of Tasmania.
SEPTEMBER 2010 OFFENCES – FEBRUARY 2017 CONVICTIONS
Ms Beckett’s February 2017 convictions were for offences under the Crimes Act 1900 (NSW) s 254. Those offences attract a maximum penalty of 10 years imprisonment. Ms Beckett’s convictions, and another offence (of giving false evidence under oath:- see Crimes Act 1900 (NSW) s 330) that was taken into account, resulted in concurrent sentences of 18 and 20 months. Both sentences were suspended, on the condition she enter into a bond to be of good behaviour for the term of each sentence:- see Crimes (Sentencing and Procedure) Act 1999 (NSW) ss 12, 33 & 55. The longer sentence, and its related bond, will not expire until October 2018.
All three of Ms Beckett’s offences occurred in the course of her 28 September 2010 examination by officers from the NSW Office of State Revenue (“OSR”). The examination followed statutory notices served on her pursuant to the Taxation Administration Act 1996(NSW) s 72. One of the notices required Ms Beckett to produce documents relating to the purchase, of a Darling Point property by PL (one of Ms Beckett’s clients and a personal friend). The other notice, which required Ms Beckett to attend the OSR’s office and give sworn evidence, was obviously, though not explicitly, directed at the same transaction.
In July 1997, in her then capacity as a practising solicitor, Ms Beckett had acted on the purchase of the Darling Point property. The purchaser was the corporate trustee of a discretionary family trust, of which PL was one of two “specified” trust beneficiaries – and one of a much wider class of “general” beneficiaries. Shortly after the purchase, PL moved into the property and it became his personal residence.
In about 2005, after becoming aware of PL’s personal use of the property, and of a trust distribution to fund the purchase of a residence for the other “specified” beneficiary, Ms Beckett advised PL it was appropriate for the trustee to transfer the Darling Point property to him, rather than retain it as a trust asset. Ms Beckett says that in December 2005, the other trust beneficiaries accepted her advice and agreed to transfer the property. However, Ms Beckett never saw any trustee resolution implementing that agreement and nothing was in fact done to effect the transfer. The inactivity seems to have been attributable to the fact that the property formed part of the mortgage security for the trustee’s substantial borrowings and, the mortgagee’s consent to the transfer was thought to be unlikely – given the trustee’s financial difficulties.
In June 2007, PL sought Ms Beckett’s assistance in relation to a land tax assessment of the corporate trustee. That assessment included the Darling Point property. As a means of dealing with both the land tax assessment and the further difficulty that the trustee was in breach of its loan covenants, PL and Ms Beckett decided to attempt to refinance the trustee’s borrowings. That refinancing strategy involved the transfer of the Darling Point property to PL, his mortgage of that property, and his contribution of the mortgage proceeds to the trustee. (Ms Beckett understood that as a personal borrower, PL would be able to secure a larger loan, and at a more favourable interest rate, than would have been the case if the property remained in the ownership of the corporate trustee.)
Having decided to implement that refinancing strategy, Ms Beckett wrote to the OSR in July 2009. She sought to have the transfer to PL stamped as requiring only nominal duty, on the basis that it was a transfer to a trust beneficiary. Her 2 July 2009 letter did not specifically refer to any particular statutory provision, but it did describe the property as PL’s “principal place of residence”. Consequently, it was implicitly directed at the provision in Duties Act 1997 (NSW) s 97. That section provided for a nominal rate of duty on such transfers where the property was held by a “special trust”.
As Ms Beckett conceded in her evidence in these proceedings, the Darling Point property was not held by a “special trust” – because the trust beneficiaries were not entitled to the trust capital:- see Land Tax Management Act 1956 (NSW) s 3A. She also conceded she likely appreciated that fact after the OSR’s 15 July 2009 negative response. Eight months later, she sent a further letter to the OSR, with a different request for a nominal duty assessment for the proposed transfer. Various attachments accompanied her 15 March 2010 letter. They included:
(a)a 1 March 2010 joint statutory declaration, by the two “specified” beneficiaries of the trust, which declared that
(i)in June 1997, each of the two beneficiaries had loaned the corporate trustee different amounts (respectively $322,000 and $301,000) for the purpose of its purchase of the Darling Point property
(ii)on 1 July 1997, the corporate trustee had resolved to transfer the property to PL
(iii)on 2 July 1997, the corporate trustee had been authorised to purchase the property for $430,000
(iv)on 30 July 1997, the corporate trustee had completed the purchase of the property
(b)the purchaser’s stamped copy of the 1997 Agreement for Sale
(c)a form of transfer of the property.
The 15 March 2010 letter was an attempt to rely on the nominal duty provision in Duties Act 1997 (NSW) s 55. That section applied to transfers by “an apparent purchaser” to a “real purchaser” who had provided “the money” for the purchase of the property. However, the statutory declaration accompanying Ms Beckett’s letter showed that PL had not in fact provided all of “the money” for the purchase of the property:- see paragraph (i) above. The OSR’s 30 March 2010 response letter effectively pointed out that fact and stated that the transfer was “liable to ad valorem duty on the value of the property as at 1 July 2009”. (The reference to that date probably derived from the date of the transfer that had accompanied Ms Beckett’s 15 March 2010 letter.)
Ms Beckett said in these proceedings that after receiving the OSR’s 30 March 2010 letter she had still entertained some hope of being able to rely on the s 55 nominal duty provision. But her account of the discussion she says she had with PL some time around April or May 2010 reflected no such hope, and she conceded that on the information available to her it would have been a deluded view to hold.
The content of Ms Beckett’s discussion with PL in April or May 2010 involved the following points:
(a)the corporate trustee needed, as a matter of some urgency, to complete the refinancing proposal
(b)the transfer to PL, and the contemplated personal borrowing by PL against the security of the Darling Point property, were important to the refinancing proposal
(c)the refinancing could not be completed unless the transfer of the Darling Point property was properly stamped
(d)PL could not provide the funds to pay the ad valorem duty on the transfer of the property, and had no realistic prospect of being able to provide the necessary funds within a predictable time frame
(e)a decision had to be made about the date of the transfer of the Darling Point property
(f)the integers in the decision about the date of the transfer were
(i)the land tax liability of the corporate trustee in relation to its ownership of the property, and
(ii)the amount of any late payment penalty or interest the transfer would attract if it was executed with a pre-2009 date.
The outcome of Ms Beckett’s discussions with PL was that, in order to assist him and the corporate trustee effect the refinancing, she agreed to stamp the transfer of the Darling Point property, despite PL’s inability to provide the funds for the actual duty payment.
On 10 or 11 June 2010, Ms Beckett effected the stamping of a transfer dated 1 December 2005. She did so as an approved person for the purposes of the Electronic Duties Returns (“EDR”) scheme operated by the Office of State Revenue (OSR) under the Taxation Administration Act 1996 (NSW) (the TA Act) s 37. Under that scheme, approved persons could have duties assessed electronically and pay the duty by periodic remittance. That permission was to be availed of in accordance with the OSR’s Guidelines for the EDR Scheme. Those Guidelines had two, presently relevant, requirements. The first was that users had to have the duty payable available to them prior to processing transactions through EDR. The second was that users had to submit weekly EDR returns with the required duty payment.
The transfer duty assessment Ms Beckett raised on the EDR system involved a total amount of $46,656.29 – comprising a primary duty of $29,240, and a late payment penalty of $17,416 (taking into account the 1 December 2005 date of the transfer). After obtaining the assessment details, and the related transaction number, from the online system, Ms Beckett applied an “OSR accountable stamp” to the executed form of transfer. The consequence of that activity, according to the EDR requirements, was that the payment of the duty amount was due on 17 June 2010.
Notwithstanding her contemporaneous understanding that the payment was due on 17 June 2010, and that she was personally “on the hook”, Ms Beckett did not pay the duty. Throughout July and August 2010, OSR personnel contacted her, or attempted to contact her, about the non-payment. Ms Beckett said in these proceedings that she “went to ground” in response to these approaches. By that expression, she meant she had deliberately avoided responding to the OSR’s approaches.
On 25 August 2010, the OSR wrote to Ms Beckett informing her that the $46,656.29 assessment amount “remains outstanding despite numerous requests for payment”. As a result of that non-payment, her status as an EDR “approved person” was to be suspended from 28 August 2010. Despite receiving this letter (apparently some weeks after its date), Ms Beckett still did not pay the assessed duty.
Ms Beckett’s continued non-payment eventually resulted in her receiving a 17 September 2010 OSR letter. That letter informed her of an audit of stamp duty transactions she had carried out. A few days afterwards she received the (21 September 2010) statutory notices to which I have already referred:- see paragraph 3 above.
After receiving the statutory notices, Ms Beckett apprehended she would need to be able to demonstrate her compliance with the EDR Guidelines requirement that she had available funds to pay the assessed duty when she had stamped the 1 December 2005 transfer document. She then set about assembling documents that would tend to evidence she had complied with the EDR Guidelines – even though she knew she had not.
First of all, on 27 September 2010, she used her own funds to acquire two bank cheques totalling $43,240. One was a Westpac bank cheque for $27,240 (not the $29,240 amount with which the transfer had been stamped). The other was an ANZ bank cheque for $16,000. Next, Ms Beckett took the original cheques to her office. There, she embarked on a process of trying to prepare photocopies that depicted the original cheques as having been drawn on 26 September 2009. (Ms Beckett said in her evidence that (i) she wanted to ensure the cheques appeared “stale” – i.e., more than 12 months old and, (ii) she appreciated that 27 September 2009 was a Sunday – and thus unlikely to be a genuine issue date.) The process involved her disguising the date on each of the original cheques and spending about an hour of trial and error photocopying. From the trial output, Ms Beckett selected the copies that appeared most likely to be accepted as realistically probative of a (false) 26 September 2009 date of each of the original cheques. She then returned the ANZ bank cheque and had it cancelled. She retained the original Westpac bank cheque, and brought it with her to her Sydney CBD office, prior to attending the OSR examination.
Ms Beckett attended the OSR’s Parramatta office shortly after midday on 28 September 2010. At the beginning of the examination, she was specifically warned that it was an offence to make a knowingly false statement to a taxation officer. Immediately after having been given that warning, which she expressly acknowledged, Ms Beckett was required to provide either an oath or an affirmation. She chose the former. After she was sworn, the examination continued for about two and a quarter hours. In the course of the examination, Ms Beckett produced the photocopied Westpac and ANZ bank cheques dated 26 September 2009. She also made various statements about them. Those statements – which Ms Beckett concedes she knew to be false at the time – included the following:-
(a)she had probably asked PL to send instructions to Westpac and ANZ to have the bank cheques drawn
(b)PL knew he had paid the money for the stamp duty – because the money had come out of his account
(c)she had prepared a previous form of transfer sometime between July and September 2009 and sent it to the mortgagee bank, probably around the 26 September 2009 date of the photocopied Westpac and ANZ bank cheques
(d)at that time she told the mortgagee bank that she had the bank cheques
(e)the Westpac and ANZ bank cheques had been drawn well before she stamped the transfer in June 2010
(f)the only reason she knew the stamp duty had been paid was because of the two Westpac and ANZ bank cheques which she had when she stamped the transfer
(g)the mortgagee bank had taken the Westpac and ANZ bank cheques at the June 2010 settlement of the transfer – and she had been so informed by the person who had attended the settlement
(h)she had made enquiries of where the original Westpac and ANZ bank cheques were
(i)she had started making those enquiries “a week after I did not have the cheques to pay the stamp duty”
(j)she had been putting effort into finding the Westpac and ANZ bank cheques, because that was a better scenario than trying to have them cancelled
(k)she had spent two months trying to get the transfer back from the mortgagee bank
(l)she had not responded to the OSR’s enquiries in July and August 2010 because she had been trying to establish satisfactory answers as to what had happened with the Westpac and ANZ bank cheques
Towards the end of the examination the OSR officers insisted that Ms Beckett have her client attend to payment of the outstanding duty. She agreed to do so promptly. Apparently by 19 October 2010 she had paid $37,000, and PL had paid the balance of the outstanding amount.
THE CRIMINAL PROCEEDINGS
Immediately after the 28 September 2010 examination, Ms Beckett appreciated that she had lied under oath and that her conduct involved a criminal offence. Nevertheless, no criminal proceedings were initiated against her until almost three years later. On 29 May 2013, she was indicted on two charges involving offences under the Crimes Act 1900 (NSW) ss 319 & 330. Ms Beckett retained Counsel to appear on her behalf in relation to those proceedings. On their advice, she sought, ultimately unsuccessfully, orders quashing the indictment, permanently staying the proceedings and ruling that all records of the 28 September 2010 examination were inadmissible. (The more important stages of that unsuccessful application were in December 2014 (see Beckett v R [2014] NSWCCA 305; (2014) 315 ALR 295) and October 2015 (see R v Beckett [2015] HCA 38; (2015) 256 CLR 305.) In between those two events, and likely in about May 2015, Ms Beckett decided not to apply to renew her solicitor’s practising certificate. At least part of the reason for that decision was a desire to avoid having to disclose her 2010 conduct, and apprehension about the likely consequence of any such disclosure.
After the 23 October 2015 High Court decision, Ms Beckett’s trial on the 2013 indictment commenced in the NSW District Court on 7 September 2016. Several days into the trial, the Crown amended the indictment – by substituting the Crimes Act s 254 charges for the previously asserted charge (under s 319, of attempting to pervert the course of justice) that had been the subject of the High Court proceedings. Ms Beckett promptly pleaded guilty to those charges.
TAX AGENT REGISTRATION AND REGULATION– LEGISLATIVE PROVISIONS
The basic purpose of the Tax Agents Services Act 2009 (“TASA”) provisions is to ensure that tax agent services are provided “in accordance with appropriate standards of professional and ethical conduct”:- see TASA s 2-5. (The expression “tax agent services” is broadly defined, and generally includes providing advice and representation services relating to Commonwealth taxation matters: see TASA s 90-5.) The TASA registration regime is a fundamental means of effectuating that purpose. Its core provision is that a person must be registered to be able to charge for providing “tax agent services”: see TASA ss 2-10 & 50-5.
The registration eligibility criteria for an individual tax agent include appropriate qualifications, experience and professional indemnity insurance. An individual registration applicant must also satisfy the Tax Practitioners Board that they are “fit and proper”: see TASA s 20-5. That will largely depend on satisfaction that the person is of “good fame, integrity and character”:- TASA s 20-15(a). The considerations that may inform such an assessment are not prescriptively defined:- see TASA s 20-15(b); Toohey v Tax Agents Board of Victoria [2008] FCA 1796; (2008) 106 ALD 506 at [3]. They must include, but the assessment is neither limited to nor explicitly determined by, circumstances where, in the preceding five years, the person has
(a)served, or has been sentenced to, a term of imprisonment:- TASA ss 20-15(b)(i) & 20-45(f); 20-15(b)(iii)
(b)had the status of an undischarged bankrupt:- TASA ss 20-15(b)(ii)
(c)been convicted of any offences involving fraud or dishonesty:- TASA ss 20-15(b)(i) & 20-45(b)
(d)been convicted, or otherwise sanctioned, for a “serious taxation offence” or certain other kinds of tax related misconduct:- TASA ss 20-15(b)(i) & 20-45(a)(c)&(d).
An applicant who satisfies the relevant eligibility requirements, must be registered:- TASA s 20-25. The minimum registration period is three years but is renewable: – TASA ss 20-25(4) & 20-50. Once registered, a tax agent is subject to various obligations. They include
(a)compliance with any registration conditions the Board imposes
(b)compliance with the statutory Code of Professional Conduct (which sets out basic requirements of honesty, competence, lawfulness, client best interest and, since 30 June 2013 maintenance of professional indemnity insurance.):- TASA s 20-25(5) & 30-10
(c)notifying the Board “whenever” they cease to meet any of registration requirements:- TASA s 30-35(1)(a)
(d)notifying the Board if (amongst other things) they have been convicted of dishonesty or have been sentenced to imprisonment:- TASA s 30-35(1)(b) & 20-45.
The Board can terminate a tax agent’s registration in various circumstances. One obvious circumstance is where the agent ceases to meet a registration requirement: – TASA ss 30-15, 40-5(1)(b). Other circumstances that enliven the Board’s termination power include (i) breach of a registration condition, (ii) failure to comply with the Code, (iii) conviction for a dishonesty offence, or (iv) incurring a sentence of imprisonment:- TASA ss 30-15, 40-5(1)(a) & 20-45(b),(f). When the Board terminates a tax agent’s registration for any of those particular reasons, it may also preclude the person from applying for re-registration – but only for a maximum period of 5 years:- TASA ss 30-15, 40-5. Any such Board decision is reviewable by this Tribunal:- TASA s 70-10.
2011 – 2017 RENEWALS & ULTIMATE DISLCOSURES
Ms Beckett witnessed both the 1 December 2005 transfer and the 1 March 2010 statutory declaration as a practising solicitor. In that capacity, Ms Beckett was required to hold an annually renewable practising certificate and (after July 2013) to hold professional indemnity insurance:- see Legal Profession Act 2004 (NSW) ss 40, 43, 98 & 406; (after 1 July 2011) Legal Profession Uniform Law (NSW) s 44, 45 & 211; Legal Profession Act 2007 (Tasmania) s 44, 45. Ms Beckett continued to hold a practising certificate until 1 July 2015. It follows that after the 28 September 2010 interview, she renewed her solicitor’s practising certificate on four occasions. On each occasion she was required to submit a renewal application in an “approved form”:- Legal Profession Act 2007 (Tasmania) s 49. In determining each such application, the Tasmanian Legal Profession Board was obliged to consider her “good fame and character” and was precluded from granting the application unless affirmatively satisfied that she was a “fit and proper” person:- Legal Profession Act 2007 (Tasmania) ss 9 & 53.
Ms Beckett renewed her tax agent’s registration in early 2013. She did so by completing an online application form on or about 15 February 2013. The form directed attention to the TASA registration eligibility requirements and, after requiring various personal particulars, emphasised the “fit and proper” requirement. On that topic, the form required answers to six specific questions about bankruptcy, convictions and tax related penalties. Those questions, reflecting the emphasis in TASA s 20-15(b), enquired about any such occurrences within the preceding five years. The seventh question, perhaps informed by an appreciation that the TASA s 20-15(b) time emphasis did not limit the considerations relevant to a properly informed assessment, asked a more general question. Its content, and Ms Beckett’s response, was as follows:-
Q;- Are there any matters or events that may affect your good fame, integrity and character? This may include:-
if you have ever had your registration …. refused, cancelled, terminated or suspended
….
been subject to any disciplinary action by a relevant professional body
A:- “No”.
At the end of the application form, Ms Beckett declared that (i) she had answered all the question to the best of her knowledge, information and belief, and (ii) that her answers were “true and correct” in every particular.
Ms Beckett renewed her tax agent’s registration again in early 2016. (This was about a year after she had decided not to renew her solicitor’s practising certificate:- see paragraph 22 above). She completed another online application form. It contained essentially the same information, questions and declarations as the 2013 application form – and Ms Beckett completed it in substantially the same way. That is to say, she answered “No” to the question set out in paragraph 29 above, and repeated the declaration described in paragraph 30.
By 21 July 2016, the Board had become aware (but in circumstances and to an extent the evidence did not disclose) of the then outstanding charge against Ms Beckett under s 319 of the Crimes Act 1900 (NSW). The Board invited Ms Beckett’s comment regarding the charge. Her 26 August 2016 response letter addressed a number of other (presently immaterial) matters and then passed on the information that the current indictment referred to a charge of giving false evidence on oath (specifically Crimes Act 1900 (NSW) s 330) and would go to hearing on 5 September 2016.
About a month later, and a week after Ms Beckett had entered her guilty pleas, the Board’s 16 September 2016 letter acknowledged Ms Beckett’s advice. Alluding to the disclosure obligation referred to in paragraph 26(d) above, the Board asked her to report “any adverse outcomes” in relation to the proceedings. It may be inferred from the terms of the Board’s request that it was not then aware of either of the two significant intervening events – (i) the amendment of the charges against Ms Beckett, or (ii) her guilty pleas in relation to those amended charges.
Ms Beckett did not inform the Board of those significant developments in the criminal proceedings until five months later. In a 17 February 2017 letter to the Board, she disclosed her pleas of guilt relating to the Crimes Act 1900 s 254 charges and reported that the matter would proceed to sentencing in the following week. (This is the only occasion since September 2010 when Ms Beckett could reasonably be regarded as having attempted to discharge her notification obligations under TASA s 30-35:- see paragraph 26(c) above.) Later in March 2017, she submitted an “annual declaration” in connection with her personal registration as a tax agent. In that declaration, she (i) disclosed the fact of her recent convictions for “an offence involving fraud or dishonesty”, (ii) disclosed that she had been sentenced to imprisonment, but (iii) contended that neither of those matters affected her “fit and proper” status, because the sentences had been “completely suspended”. The final “fit and proper” question in the declaration form was to substantially the same effect as that set out in paragraph 29 above. Ms Beckett again answered the question “No”.
THE MEANING AND ASSESSMENT OF “FIT AND PROPER”
Prior to TASA’s relevant commencement in 2010, tax agent registration was governed by Part VIIA of the Income Tax Assessment Act 1936 (“ITAA36”). Under those provisions, the basic eligibility requirements were solvency and being “fit and proper” to prepare income tax returns and transact business relating to income tax matters:- ITAA36 s 251JA(1)(a). A person was not “fit and proper” if (amongst other things) they (i) were “not of good fame character and integrity, (ii) were “under sentence of imprisonment” for a “serious taxation offence” or (iii) had been convicted of a “serious taxation offence” during the previous 5 years:- ITAA36 s25BC(1). (The expression “under sentence” extended to being at liberty on licence or parole or subject to a good behaviour bond:- ITAA36 s 251BC(4)&(5).) There was a discretion to “suspend or cancel” registration where the tax agent was no longer “fit and proper”, and an obligation to do so if the agent had been convicted of certain taxation offences:- ITAA36 s251K. In the case of registration renewal, and the assessment of the “fit and proper” criterion, there was a “special circumstances” discretion to disregard both convictions for “serious taxation offences”, and other impugned conduct:- ITAA36 s25BC(1).
The TASA eligibility and cancellation provisions (relevantly outlined in paragraphs 25 to 27 above) differ from the ITAA36 provisions in various respects. The three most readily apparent differences are (i) the “good fame, integrity and character” criterion is one to which the Board must “have regard” (rather than an explicit barrier to a favourable assessment of fitness), (ii) any sentences within the preceding 5 years (not just those related to “serious taxation offences”) are matters mandatorily relevant to the “fit and proper” assessment, and (iii) any, similarly recent, convictions involving “fraud or dishonesty” (again, not just those involving “serious taxation offences”) are also mandatorily relevant. The first of those differences must be taken as an intentional widening of the “fit and proper” assessment evaluation, but nothing in either the text of the TASA provisions or the Explanatory Memorandum for the Tax Agent Services Bill 2008, suggests any related intention to limit the weight that a “fit and proper” assessment could permissibly give to an absence of satisfaction about “good fame, integrity and character”. Indeed, when regard is had to the second and third of the differences (with the wider categories of mandatory considerations), there is a basis for concluding that the TASA provisions were intended to re-inforce, rather than to circumscribe, the weight permissibly accorded to an absence of satisfaction of “good fame, integrity and character”.
Since 2010, the Board has published, and periodically revised, an explanatory paper explaining its views about the meaning and application of the “fit and proper person” registration requirement. An Appendix to the current version of the paper summarises 16 cases in which the application of the “fit and proper” requirement was a determinative consideration. At a level of generality, nothing in the explanatory paper, or the cases summarised in the Appendix, is intended to be prescriptive or to suggest a formulaic approach to the required fitness assessment. (This is made plain by the statement that the paper indicates the “range of considerations that need to be balanced” without providing a “blueprint or formula”.) On the contrary, any fitness assessment “will depend on a weighing of … considerations in the context of the particular facts and circumstances of the relevant case”:- at [8], [56]. At a more specific level, the explanatory paper notes that under the “must have regard to” obligation (in TASA s 20-15) absence of “good fame, character and integrity” does not automatically preclude a favourable assessment of fitness. But the explanatory paper goes on later (at [59]) to emphasise that the principal purpose underlying TASA’s registration provisions is “to protect the public and maintain public confidence in the tax agent … professions”. Having provided that emphasis, the explanatory paper goes on to state that the task of a tax agent “requires such attributes as competence, good fame, integrity and character” (at [70]). It also declares that TASA’s protective purpose is achieved by “ensuring that only those individuals that possess the requisite knowledge, ability, good fame, integrity and character are registered as tax agent practitioners” (at [60]). Those passages, whilst not independently authoritative in their own right, suggest the fundamental importance of good character and are consistent with the underlying legislative provisions.
In Hughes and Vale Pty Ltd v State of NSW (No 2) (1955) 93 CLR 127, the “fit and proper” person criterion governed eligibility for a motor vehicle licence under state transport legislation. In that context, the principal judgment in the High Court observed that whilst the “fit and proper” was familiar in relation to eligibility for particular offices or vocations, the purpose of its use was
“… to give the widest scope for judgment and indeed for rejection. ‘Fit’ (or ‘idoneus’) with respect to an office is said to involve three things, honesty, knowledge and ability: ‘honesty to execute it truly without malice, affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it’ – Coke.”
In the immediately following part of the reasons, there was a reference to the way in which the purpose of the assessment might inform the permissibly relevant considerations. This led on to the observation that the fitness criterion was one that had no definite ambit of relevance and “in truth involves a very wide discretion”. That width was again expressly acknowledged in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321. It arose for consideration in the context of the licensing provisions of the Broadcasting Act 1942 (Cth). The statutory licences could only be issued to a “fit and proper” corporate entity. The Broadcasting Tribunal had relied on findings that Mr Bond was not personally “fit and proper” to conclude that the corporate licensee (which he was in a position to control) was similarly unfit. This raised questions about the permissible scope of the fit and proper criterion in the particular statutory context. That question was most fully addressed by Toohey and Gaudron JJ – in the following passages:
“The expression ‘fit and proper person, standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of ‘fit and proper’ cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.”
Whether the fitness and propriety of a licensee to hold a commercial licence are sufficiently ascertained by reference to its character or reputation, or must be ascertained by reference to the conduct of its affairs and activities, is a question the answer to which must be found by implication from the provisions of the [relevant legislation] … and from the activities to be undertaken pursuant to the licence. (at 170 CLR 380)
A commercial broadcasting licence thus carries with it an obligation to the community. It also carries with it the potential for powerful influence. The community is entitled to confidently expect that a licensee will discharge its obligation and, in particular, that the potential for influence will not be abused. Within this context it is necessarily sufficient to ground a finding that a licensee is not a fit and proper person to hold a commercial licence that the community could not or would not have confidence that the licensee would discharge that obligation. Equally it is sufficient to ground a finding that the licensee is no longer fit and proper that the community could or would no longer have that confidence. Those questions are apt to be answered by reference to the character and reputation of the licensee. (at 170 CLR 382)
The observations in the last cited passage resonate, despite the obvious factual distinctions, with the public interest objectives in the TASA registration and regulation scheme. Those objectives include promoting confidence in tax agents’ dutiful discharge of their obligations and proper use of their status. And, as Toohey and Gaudron JJ were at pains to emphasise, confidence of those kinds may be materially influenced by the nature of the person’s past misconduct, by their character and by their reputation: – see 170 CLR at 383.
That kind of emphasis had already been apparent in decisions about tax agent registration under the ITAA36 provisions. In Su v Tax Agents’ Board South Australia [1982] AATA 127; (1982) 61 FLR 1, the tax agent was a 35 year old chartered accountant. There was no evidence of any deficiency in the agent’s conduct in handling any of his client’s affairs. But he had incurred eight convictions, between May 1979 and June 1981, for various offences of failing to lodge his own personal tax returns and failing to remit amounts deducted from employees’ wages. Those convictions resulted in fines ranging from $40 to $600. Davies J expressed the view that, whilst a tax agent’s default in relation to his personal affairs could potentially adversely reflect on their fitness, Mr Su’s eight convictions would not, of themselves have warranted a conclusion terminating his registration as a tax agent. However, three other matters combined to warrant that conclusion. They were:
(i)Mr Su’s chronic failure, in the financial year ended June 1982, to remit group tax deductions
(ii)his 1982 removal from the register of company liquidators (for irregularities not detailed in the judgment) and,
(iii)false answers to questions about recent convictions in each of his last three annual declarations as a tax agent. Of those failures Davies J said (at (1982) 61 FLR 1 page 10):-
The annual notice which a tax agent is required to lodge … is a clear and simple notice but nevertheless an important one. Mr Su’s failure to correctly complete the last three annual notices … is in my view, of itself, probably sufficient to warrant his removal from the register. A person who does not complete such a form accurately is not a person of sufficient competence and integrity to hold the privilege of acting for clients in the preparation and lodgement of their income tax returns.
Davies J’s conclusion was markedly influenced by an earlier passage in the reasons where His Honour had described a tax agent’s essential function as that of preparing and lodging client tax returns. His Honour continued (at (1982) 61 FLR 1 at 4 – 5):-
“A person is a fit and proper person to handle the affairs of a client if he is a person of good reputation, has a proper knowledge of taxation laws, is able to prepare income tax returns competently and is able to deal competently with any queries which may be raised by officers of the Taxation Department. He should be a person of such competence and integrity that others may entrust their taxation affairs to his care. He should be a person of such reputation and ability that officers of the Taxation Department may proceed upon the footing that the taxation returns lodged by the agent have been prepared by him honestly and competently.”
The circumstances in Su involved a substantial degree of contemporaneity between the tax agent’s misconduct and the assessment of his current fitness. In Stasos v Tax Agents’ Board of New South Wales [1990] AATA 346; (1990) 21 ALD 437 between 1975 and 1980 the tax agent had consistently understated his professional income, and had disguised the understatement by failing to claim corresponding deductions in his clients’ tax returns. In the course of an initial interview about the irregularities, the tax agent had at first denied, but later conceded his misconduct in relation to some clients. About four years later, despite the absence of any further irregularity and Mr Stasos’ assertions of contrition, his registration was cancelled. In upholding the lawfulness of that decision, Hill J made two, presently significant observations. The first concerned the importance of a tax agent’s honesty in dealing with client’s affairs. The second concerned the assessment of fitness after past instances of serious impropriety. Those observations were as follows:-
The commissioner and his officers must be able, also, to accept the word of a tax agent when acting for a taxpayer in negotiations, and a fortiori in matters proceeding in a Board, the Administrative Appeals Tribunal or indeed a court it is imperative that the honesty and integrity of the tax agent not be called into doubt. So it is that it is a requirement, not only of initial registration, but of remaining on the register that a tax agent be a fit and proper person to perform the duties of a tax agent and bear the responsibilities that come with those duties. (at (1990) 21 ALD 444)
…
a person who has been shown to be other than a fit and proper person to be registered must satisfy the Tribunal considering his reregistration or cancellation of his registration as the case may be, that he appreciates the significance of his wrongdoing, that he regrets it and that he has rehabilitated himself such that it is truly unlikely that there will be any lapse in the future of the standards which are required of him. The more serious his dereliction from duty the longer may be the time necessary to show this. It will not be sufficient for him to merely express his contrition. The Tribunal must be satisfied on the balance of probabilities that not only is that contrition actually felt, but that he will not again deviate from the high standards required of him as a registered tax agent. (at (1990) 21 ALD 445)
The last sentence in the second of those cited passages has been particularly influential in subsequent decisions that have focussed on the protective nature of the registration function – and in the explanatory paper itself (see [62]). It is a sentiment whose emphasis on assessing the risk of further misconduct was particularly apt in the context of the ITAA36 provisions that meant absence of good fame and character was, in any event, an automatic barrier to registration. But it is an emphasis that should not detract from the relevance of both fame and character to the fitness assessment. That relevance was apparent in Hughes and Su and continued to be apparent in subsequent decisions. The first of the passages I have cited from each of the reasons in Su and Stasos highlights the proposition that satisfaction about a person’s honesty is fundamental to a determination that they are fit and proper for registration as a tax agent. Emphasis on that proposition is implicit in TASA s 20-45(b), and in the first of the passages cited in the immediately preceding paragraph. It is an emphasis repeatedly found in other matters. In Re Carbery and Associates Pty Ltd and Tax Agents' Board of Queensland [2001] AATA 107; (2001) 46 ATR 1106; [2001] AATA 107 the Tribunal was concerned with the tax agent’s registration provisions under ITAA36. Matters raised in relation to Mr Carbery’s fitness included neglect of client affairs, tardiness in responding to matters raised by the registration Board and a false answer to a question about convictions within the preceding five years. Part of Mr Carbery’s answer to the latter criticism was a claim that he had enquired of the registration authority and been told that he was only required to disclose a “serious tax offence”. The Tribunal dismissed that claim saying (at [18]) that, even if that claim was factually correct “for him to have answered the specific question "no" is tantamount to a deliberate suppression of information sought”.
In Frost Taxation Pty Ltd and Tax Agents’ Board of South Australia [2005] AATA 393; (2005) 87 ALD 794, the taxpayer was an accountant whose conduct and competence in handling client’s tax affairs was not impugned. Thirteen years earlier he had been involved in litigation, arising out of irregularities in his practice as an accountant. In about 1997, the judgment in those proceedings had resulted in his bankruptcy five years later. In the course of the bankruptcy in 1997 and 1998, the accountant had knowingly misled his professional accounting body, and had been removed from its membership. He had failed to co-operate fully with his trustee in bankruptcy and also not informed the registration board of the fact of his bankruptcy. The Tribunal was inclined to the view that Mr Frost’s original impugned conduct could not itself be regarded as probative of his contemporary unfitness in 2005. But the Tribunal did regard his professionally related dishonesty in 1997 and 1998, and the misconduct during his bankruptcy as demonstrating, both “individually and of greater significance all of them together” his lack of fitness. The Tribunal took into account the considerable personal adverse impact on Mr Frost of the court proceedings and bankruptcy – impacts that were not just financial but extended to his domestic relationship and his personal health. But the Tribunal regarded Mr Frost’s evidence about those matters as probative more of personal regret than insightful remorse and contrition.
The last of the passages I have cited from each of the judgments in Hughes and Su point to the relevance of reputation in the assessment of fitness. The much later decision in Sargent v Tax Agents Board of Victoria [2009] AATA 219; (2009) 75 ATR 495 illustrates the way in which TASA’s overall protective object requires regard to the repute of tax agents generally, and to the maintenance of public confidence in their competence and integrity. In that case the tax agent had been recently convicted of sexual offences, imprisoned for a short period and was serving the remainder of his sentence in community service. The tax agent conceded his present unfitness, but contended that the appropriate order was for suspension, rather than cancellation, of his registration. In rejecting that contention, the Tribunal drew on decisions in other cases where analogous general professional repute had been regarded as the determinative consideration. Those analogous cases included Law Society of South Australia v McKerlie [2008] SASC 222 (where a barrister who had been convicted of sexual assault had been removed from the roll), A Solicitor v Law Society (NSW) (2004) 216 CLR 253 at [19] (where a solicitor with sexual assault convictions was allowed to remain on the roll) and Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 (where a barrister serving a sentence for manslaughter was suspended for the duration of his prison sentence). In the latter case, a passage from the judgment of Kitto J is particularly informative. Shorn of its emphasis on the status of a barrister, an abbreviated version of the passage is to the following effect:-
It is not difficult to see in some forms of conduct, or in convictions of some kinds of offences, instant demonstration of unfitness …. Conduct may show a defect of character incompatible with membership of a self-respecting profession … A conviction may of its own force carry such a stigma that … members of the profession may be expected to find it too much for their self-respect to share with the person convicted the kind and degree of association which membership …entails. But it will be generally agreed that there are many kinds of conduct deserving of disapproval, and many kinds of convictions of breaches of the law, which do not spell unfitness … ; and to draw the dividing line is by no means always an easy task.
Two cases illustrate the kinds of circumstances that may provide the perspective from opposite sides of the difficult to draw line. In McKay v Tax Agents Board Tasmania [1994] AATA 113; (1994) 94 ATC 2057, the Tribunal held that a tax agent’s convictions for offences relating to inadequate accounting records of a company of which he was a director did not relevantly evidence his contemporary unfitness. This was an unsurprising conclusion in the particular circumstances, where the trial judge had (i) expressly found that the agent honestly believed the accounting records were adequate and (ii) specifically expressed the view that the convictions ought not be regarded as adversely affecting the agent’s professional standing. The decision in Re Kerin and Tax Agents’ Board (SA) [2009] AATA 764; (2009) 113 ALD 530 concerned a person who had been a barrister and tax agent for more than 20 years. In his 2007 registration renewal application, the agent had disclosed (i) his December 2006 removal from the roll of legal practitioners (for matters unrelated to his work as a tax agent) and (ii) six convictions for firearm related offences, including knowingly making false statements on a customs document relating to importing a prohibited firearm, between 1994 and 2004. In challenging the refusal of his registration renewal, the tax agent unsuccessfully contended that (i) his competence as a tax agent had been exemplary over a substantial period, (ii) his firearms offences did not involve dishonesty, and (iii) different standards applied in assessment of fitness for the purposes of registration, on the one hand, and status as a legal practitioner, on the other. The Tribunal substantially accepted the first of these propositions. It rejected the second, on the basis that the firearm offences involved deliberate misconduct that the agent had attempted to conceal. In rejecting the third proposition the Tribunal expressed the view that public trust and confidence were equally fundamental considerations for both callings:- see [2009] AATA 764 at [37] – citing Re Sargent and Tax Agents Board (Vic) [2009] AATA 219 (at [16]). The Tribunal considered that the tax agent’s convictions were for intentional crimes and involved misconduct adverse to any favourable assessment of his professional fitness.
Where integrity has been called into question by past dishonesty satisfaction about contemporary good character and fitness, assessed in a forensic context, may properly be influenced (though not determined) by a degree of scepticism. The reasons for that kind of scepticism were expressed by Walsh JA In Ex parte Tziniolis; Re the Medical Practitioners Act (1966) 67 SR(NSW) 448 at 461:
… Reformations of character and of behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man
It is substantially for that reason that past dishonesty is likely to be highly probative of unfitness. That view can be seen in Re Davis (with its reference to the materiality of the housebreaking offence – see paragraph 57 below), and in Jackson v Legal Practitioners Admission Board [2006] NSWSC 1338 – a case whose relevant analogy with the present proceedings is patent from the following passage from the judgment of Johnson J:-
[270] I am conscious that the events which have attracted the principal attention of the Court on this appeal occurred more than a decade ago. However, the making of a false statutory declaration and the giving of false evidence in a Court are matters which strike at the heart of the processes of justice. To act in such a way is entirely inconsistent with the requirements of integrity and honesty which are essential prerequisites for admission as a legal practitioner. The Plaintiff had commenced her legal studies by the time of relevant events in 1995 and 1996. Findings that the Plaintiff has acted in this way are inconsistent with the requirement that the Plaintiff be of good character.
This emphasis on the potential adverse significance of past dishonesty has continued to influence many decisions relating to tax agent registration:- see Hourani and Tax Practitioners Board [2012] AATA 518, (2012) 58 AAR 104 (misuse of client funds); Trevaskis and the Tax Practitioners Board [2013] AATA 301; (2013) 135 ALD 200 (false GST returns over the period from 2005 to 2007); Burnett v Tax Practitioners Board [2014] AATA 687; (2014) 99 ATR 456; and Toohey v Tax Agents Board of Victoria [2008] FCA 1796; (2008) 106 ALD 506
In Burnett v Tax Practitioners Board [2014] AATA 687; (2014) 99 ATR 456, the tax agent was another person who had a long history (some 30 years) of apparently competent and honest conduct in that role. However, between 2011 and 2013, she had come under scrutiny from, and been audited by, the Tax Office as a result of concern about unsubstantiated deduction claims in a significant number of client tax returns she had submitted. In addition to those criticisms, the agent had used the ATO tax agents’ portal to obtain financial information about a third party – to assist one of her clients in a matrimonial property dispute being litigated in the Family Court. (She had done so by accessing the website and falsely entering particulars claiming to be the tax agent acting for the third party.) In relation to that particular aspect of the agent’s misconduct, Deputy President Bean said this:-
[103] Even if there had been nothing before me to suggest any other impropriety, this conduct alone would have raised a serious question as to Mrs Burnett’s fitness and properness to practice as a tax agent, and that would have been the case even if Mrs Burnett had appreciated the seriousness of her conduct and sincerely regretted the conduct.
[105] As I have indicated above, the fact that Mrs Burnett engaged in this conduct in the first place suggests she is not a fit and proper person to be a tax agent. The fact that she does not appear to appreciate the extent to which her conduct was entirely inappropriate and an abuse of her position, merely confirms that she has an insufficient appreciation of the responsibilities and obligations of a tax agent, such that she is not fit to hold that position. In light of her lack of appreciation of the seriousness of her conduct in this regard, I can have no confidence that she would not engage in similar conduct in the future. As such, allowing her to continue to practice as a tax agent would pose an unacceptable risk to the community.
In Toohey v Tax Agents Board of Victoria [2008] FCA 1796; (2008) 106 ALD 506, a tax agent of many years standing had failed to lodge his personal tax returns on a number of occasions between 1989 and 2002 – apparently despite being put on notice in 1995 that the registration board was “extremely concerned” about his default. After 2002, apart from tardiness in lodging tax returns for the 2006 financial year, the tax agent had generally complied with his personal tax obligations. A July 2004 decision to reject the agent’s registration renewal application sparked almost six years of controversy, before it was ultimately upheld. (The stages in that controversy are briefly described in Toohey v Tax Agents' Board of Victoria (No 3) [2010] FCA 356; (2010) 78 ATR 905.) Several aspects of the matters addressed in the course of that controversy are material to bear in mind:-
(a)the agents personal honesty, and his genuine endeavour and competence in dealing with client’s affairs were substantially accepted:- see Toohey and Tax Agents' Board of Victoria [2009] AATA 603 at [36]
(b)the agent had suffered from a number of significant personal and financial stressors, including physical and mental ill health which had led him to neglect his personal affairs, but which had substantially resolved by mid-2009:- see Toohey and Tax Agents' Board of Victoria [2009] AATA 603 at [6] & [34]
(c)the assessment of fitness had to be made at the time of the determinative consideration:- Toohey v Tax Agents' Board of Victoria (No 3) [2010] FCA 356; (2010) 78 ATR 905 at [3]
(d)the assessment required a determination of both the likelihood of future default and the community confidence about its improbability:- Toohey v Tax Agents' Board of Victoria (No 3) [2010] FCA 356; (2010) 78 ATR 905 at [16]
(e)the Tribunal’s ultimate lack of satisfaction (about the two matters referred to in the preceding paragraph) was contributed to by (i) the Applicant’s extensive past non-compliance, (ii) the Applicant’s lack of diligent promptness in the conduct of the review proceedings, (iii) the basic nature of the compliance obligation involved, (iv) the pedestrian nature of the various stressors that had contributed to his default (i.e., the inherent likelihood of similar stressors occurring again) and (v) the importance of public confidence that a tax agent would “lead by example” in relation to timely compliance with taxation obligations:- see Toohey and Tax Agents' Board of Victoria [2009] AATA 603 at [36].
In relation to the penultimate proposition set out in the preceding paragraph, Middleton J’s actual statement was in in the following terms:-
[16] … In determining whether a person is a fit and proper person the enquiry is directed not only to whether improper conduct has occurred, but whether it is likely to occur again, and whether the community will have confidence that it will not occur. This will involve an evaluation of character and reputation: see Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380; 21 ALD 1 at 40; 94 ALR 11 at 56; [1990] HCA 33 (Bond) per Toohey and Gaudron JJ.
The emphasis in the first part of the first sentence of that passage was at the forefront of the submissions made on Ms Beckett’s behalf in the present proceedings. Those submissions emphasised that her concededly improper conduct occurred about eight years ago. They also sought to characterise it as aberrant, and relevantly contributed to by the “unique” stressors to which she had been subject:- see paragraph 66 below. Alternatively, and implicitly recognising that the causal contribution between those stressors and her dishonesty might be regarded as tenuous, the submissions sought to characterise her conduct as transparently ill thought out, and her misconduct readily detectable. The contention was that these features of her conduct, at least evidenced a state of panic which was unlikely to re-occur – given (i) Ms Beckett’s asserted underlying honesty and competence and, (ii) the insight and regret she had expressed in her evidence about the gravity and consequences of her misconduct.
There is no doubt that any assessment of contemporary fitness that has regard to past misconduct must pay adequate regard to the “whole position” in which that conduct occurred:- see A Solicitor v Council of the Law Society of NSW [2004] HCA 1 at [18]; (2004) 216 CLR 253. In SRBP and Tax Practitioners Board [2016] AATA 456; (2016) 103 ATR 708, the tax agent had been responsible for numerous delays in accounting to clients for their tax refunds. This had occurred against a background of a troubled domestic relationship which had apparently reached its nadir, and contributed to significant mental illness, at about the time of her professional default. In relation to that combination of considerations, Senior Member O’Loughlin said this:-
[40] A practitioner’s state of health or domestic circumstances or both may explain how unprofessional conduct came to occur but does not change the character of that conduct: it remains unprofessional conduct based on an objective assessment of the events that occurred:- Legal Practitioners Conduct Board v Nicholson [2006] SASC 21 at 26, 40 and 41. That said, under the new regime for regulation of tax agents it is clear that the role is not to punish but to take action so as to encourage maintenance of standards:- Legal Practitioners Conduct Board v Nicholson [2006] SASC 21 at 27. Temporary medical conditions are a factor to be considered and in Harris the lawyer was not struck off when he otherwise may have been:- Legal Practitioners Conduct Board v Nicholson [2006] SASC 21 at 30. In Chamberlain v Australian Capital Territory Law Society a reprimand was substituted for suspension for what was otherwise regarded as grave impropriety: (1993) 118 ALR 54.
…
[43] Protecting the public interest by maintaining standards requires recognition that the public interest function of a regulatory regime can be regarded as served if the decision maker is satisfied that the offender has recovered:- Legal Practitioners Conduct Board v Nicholson [2006] SASC 21, 30.
The decision in Legal Practitioners Conduct Board v Nicholson [2006] SASC 21 involved a legal practitioner who had engaged in unprofessional conduct over a short period of time when he was suffering from major depression and alcohol dependence. That conduct involved transferring money from his trust account without client authority. Almost immediately afterwards, he promptly informed the Law Society and most of the money was repaid. (There were also earlier instances of previous (minor) irregularities in the use of trust account funds. But the court dealt with these on the basis that they had either been authorised in fact or were transfers where the client’s authority would inevitably have been given.) The Court clearly treated the circumstances of the solicitor’s obvious misconduct as aberrant and not materially adverse to his contemporary fitness:-
[27] … the function of the Court is to take such action as required to protect the public interest. The role of the Court is not to punish. It is to take such action as will encourage the maintenance of proper professional standards, and to deal with practitioners in a manner that will protect the public interest. In considering the public interest, matters that might substantially mitigate wrongdoing, were the court considering punishment, are not necessarily entitled to the same weight as they would be in proceedings directed towards punishment …
…
[31] To the extent that the public interest requires that it be brought home to Mr Nicholson that his conduct was professional misconduct, and was unacceptable, I consider that that purpose has already been served. First, Mr Nicholson himself has frankly acknowledged his wrongdoing. Second, adverse findings against him have been made. Third, he has been suspended from practising as a solicitor and as a public notary for some time now, and no doubt has suffered considerable financial hardship as a result of that. That should suffice to bring home to him the importance of observing the proper professional standards.
The question whether, and in what circumstances, lapse of time, asserted contrition and the apparently exceptional nature of past misconduct suffice to permit satisfaction of contemporary relevant fitness admits of no easy answer, and correspondingly contentious conclusions. The inherent difficulties are well illustrated by Re Davis (1947) 75 CLR 409. As a 20 year old, shortly after a period of inpatient hospitalisation for a mental illness, Mr Davis had committed a break and enter offence – to which he pleaded guilty and had been released on a bond. Twelve years later, he secured admission as a legal practitioner, without disclosing the fact of his previous conviction. As a combined result of the conviction and the non-disclosure, his name was removed from the roll. That decision was unanimously upheld in the High Court:
It would not be reasonable to require a candidate to disclose to the Board, or even to persons whom he approached with a request for certificates, every wrongdoing of his life. But a conviction for housebreaking is so obviously a relevant matter when character is under consideration that there can be no room for doubt in the present case as to the duty to disclose it both to the Board and to the persons from whom he obtained certificates of character.
It was submitted that the appellant, by his good behaviour since 1934, had redeemed himself, and that it was not unreasonable for him to take the view in 1944 and 1946 that he was then a person of good fame and character. It may be that he had by that time become a person of good fame, ie, of good reputation among those who then knew him. But intrinsic character is a different matter. A man may be guilty of grave wrongdoing and may subsequently become a man of good character. If the appellant had frankly disclosed to the Board and to the two solicitors the fact of his conviction, that disclosure would have greatly assisted him in an endeavour to show that he had retrieved his character. But his failure to make such disclosure in itself, apart from the conviction, excludes any possibility of holding that he was in 1946, or had become in 1947, a man of good character. (per Latham CJ)
…
… I hope that I have stated [the facts] in a way which brings out many considerations undeniably favourable to the appellant. He has shown industry, perseverance and courage amidst the most adverse circumstances, and has overcome many disadvantages and obstacles encountered particularly in his early years. His mental breakdown and even his descent into criminality will evoke much human sympathy. It is always so upon moral questions, particularly when a man, whose conduct or actions have been in many respects praiseworthy, mars his life by a crime.
But, though concern for an individual who is overtaken by the consequences of past wrongdoing is a very proper human feeling, it is no reason whatever for impairing in his interests the standards of a profession which plays so indispensable a part in the administration of justice. Housebreaking for the purpose of theft is not a crime the effect of which as a disclosure of character can be considered equivocal.
It is not so easy to imagine explanation, extenuation or reformation sufficiently convincing or persuasive to satisfy a court that a person guilty of such a crime should take his place as counsel at the Bar. But a prerequisite, in any case, would be a complete realization by the party concerned of his obligation of candour to the court in which he desired to serve as an agent of justice. The fulfilment of that obligation of candour with its attendant risks proved too painful for the appellant, and when he applied to the Board for his certificate he withheld the fact that he had been convicted.
A case that perhaps illustrates a rather less censorious approach is that of Chamberlain v Australian Capital Territory Law Society (1993) 118 ALR 54. It involved a thoroughly exceptional set of circumstances where a solicitor took advantage of mistake in the amount of a tax debt claim by the Deputy Commissioner of Taxation. Instead of drawing the mistake to the Deputy Commissioner’s attention, and determined to take advantage of it, the solicitor consented to a 1984 judgment for the lesser amount, succeeded in defending the judgment throughout the course of prolonged subsequent litigation, and never in fact paid the full amount of his contentious tax liability. His ultimate fate in disciplinary proceedings was that the ACT Supreme Court substituted a reprimand for suspension, notwithstanding its characterisation of his conduct as involving “grave impropriety”. In reaching that conclusion, the Supreme Court framed the question as one of “fitness” – and went on to say that:
the case demonstrates the difficulty of drawing the line between tough but legitimate tactics in an adversary system of litigation and an impermissible intrusion into the prohibited domain of professional misconduct: (at 69)
It is important to recognise (because the assessment must be made in its contemporary setting) that Re Davis was decided some 70 years ago. It is also important to recognise (because the “fit and proper” criterion has to be applied in its purposive context) that Ms Beckett’s contentious status is that of a tax agent rather than a barrister. Nevertheless, the concepts of good fame, integrity and character are equally material to any assessment of fitness in relation to both legal practitioners and tax agents. In relation to both assessments the concepts of integrity and honesty are of fundamental importance. As to honesty it is a pedestrian concept. The standard of truthfulness it requires is a matter of common understanding and community standards. This is not to say that objectively established inaccuracy is never amenable to nuanced discrimination about its character significance. Lies told in haste, prompted by re-active embarrassment, proffered to protect others, and either objectively inconsequential or actually adverse to a person’s own interest may be put in the balance on the shorter arm of the notional scales of evaluation:- see Prothonotary v Del Castillo [2001] NSWCA 75 at [676] to [71]. Even some kinds of non-disclosure (attributable to personal embarrassment about matters not relating to honesty) may be treated as immaterial to an assessment of fitness: Harris and Tax Practitioners Board [2014] AATA 430 at [36]. But it is difficult to include in the same position lies conceived in advance, directly related to professional integrity, knowingly proffered on oath, and deliberately persisted with in the face of scepticism and testing. It is even more difficult to do so where the lies were conceived and uttered to avoid detection of anterior professional misconduct and to minimise the risk of it being sanctioned. Ms Beckett’s conduct at the 28 September 2010 interview had all of those characteristics. The anterior misconduct for which she was anxious to avoid sanction, was that of stamping the 1 December 2005 transfer at a time when the client could not pay the applicable duty, and when she did not intend to discharge the payment obligation unless and until she was ultimately forced to pay.
MS BECKETT’S PERSONAL CIRCUMSTANCES
The submissions inviting the characterisation of Ms Beckett’s 2010 conduct as aberrant, and uninformative of any accurate assessment of her current fitness pointed to both her professional and personal background. She had first become a become a registered tax agent in February 1987. That registration followed her 1984 graduation with bachelor degrees in economics and law, and her qualification as a Certified Practising Accountant. At first she was involved in tax agency work only on a part-time basis, as a supplement to her other employment. By 1996 Ms Beckett was working for a large Sydney law firm and had obtained an unrestricted practising certificate from the Law Society of New South Wales. In about 1998 she had begun to conduct her own combined legal, accounting and tax agent’s practice.
In 2004 Ms Beckett and her family moved from Sydney to Hobart, her birthplace city. There she continued her multi-discipline practice, but most of her clients were Sydney based, and she maintained an office there. (In her 2013 and 2016 renewal applications, she described that office as her principal place of business.)
Ms Beckett has six children. They range in age from about 27 to 14. That range reflects her 1989 marriage, and the birth of her youngest child at about the time she moved the family to Hobart. Ms Beckett’s husband was both a domestic partner and, after about 2000, associated with her business. However, the domestic relationship, and ultimately the business association, floundered – as a result of her husband’s gambling. In early 2007, they severed their domestic relationship, but continued to share residence and office arrangements. That sharing ended in early 2009, against the background of divorce proceedings Ms Beckett initiated in 2008. The relationship between them deteriorated further in 2009. That deterioration culminated in a formal divorce decree in November 2009 and a domestic violence incident in December 2009. Ms Beckett estimated that in the course of the deteriorating relationship with her husband, his gambling losses had exceeded $0.558m by late December 2009, and had increased by about another $170,000 as at December 2010.
In the immediate aftermath of her September 2010 dishonesty, Ms Beckett, despite professing an immediate regret, said she actually regarded the matter as merely an administrative struggle about the OSR’s payment demand. Having paid the duty in October 2010, she essentially regarded the matter as resolved. At one point she claimed that it was not until she was indicted in May 2013 that she realised the full potential implications of what she had done. At a later point, however, she conceded that immediately after the September 2010 interview, she fully appreciated that she had lied on oath and believed that she had thereby committed a criminal offence.
In the early part of 2015, following her only partial (and temporary) success as a result of the December 2014 Court of Criminal Appeal judgment, Ms Beckett likely appreciated the inevitability of some kind of criminal conviction. That appreciation at least partly influenced her decision not to renew her practicing certificate after June 2015:- see paragraph 23 above.
In February 2018, the Legal Profession Board of Tasmania commenced proceedings in the Supreme Court of Tasmania to have Ms Beckett removed from the roll of legal practitioners. The application was based on her September 2010 conduct and subsequent convictions. In response to the commencement of those proceedings, Ms Beckett filed her own application to have her name removed. When she was asked in the present proceedings about the grounds of her application, Ms Beckett said she did not know, and could not even recollect whether she had provided any evidence to support her application. Despite my explicit indication that the reasons for Ms Beckett’s removal application might be material to the present proceedings, no further information was provided.
Ms Beckett asserts that her personal circumstances during 2009 and 2010 were subject to the combined stressors of (i) the parental responsibility for six school age dependent children, (ii) the relationship conflict with her husband, (iii) the disruption he caused to her office and staff, (iv) the financial stresses attributable both to his gambling losses and the cost of the divorce proceedings and, (v) the behavioural problems of one of her adolescent daughters. She described that period as “unique” in relation to the stress to which she was subject. In relation to her September 2010 conduct, she professed shame and an inability to understand how she could have come to do what she then did. She speculated that she must have been overwhelmed by the stress of her personal situation. Whatever the explanation, she claimed to have learnt a salutary lesson. The severity of the sentences imposed on her in February 2017, and the gravity of both the present proceedings and those recently commenced by the Tasmanian Legal Profession Board, highlight the reality of that education. But the question whether it betokens her contemporary fitness is another matter.
MS BECKETT’S COMMENDERS
Ms Beckett sought to complement the force of her own assertions of contemporary good fame, integrity and character with the evidence of some of her clients, and that of one of her long standing employees. The person in the latter category was Ms Carr. In a February 2018 letter (on which she was not cross examined), Ms Carr said she had worked for Ms Beckett for about seven years, and was “entirely familiar” with the cheque incident. She said that behaviour was entirely uncharacteristic. She described Ms Beckett as honest and reputable in all her client dealings.
Ms Keryl Egan is a clinical psychologist of considerable experience. She has been one of Ms Beckett’s tax and accounting clients since about 2010. Not long after she first engaged Ms Beckett, Ms Egan suffered serious ill health and became heavily reliant on Ms Beckett’s assistance in discharging her financial record keeping and taxation obligations. She expressed singular appreciation of Ms Beckett’s “perception, empathy and competence” in the assistance she provided. She also expressed the view that Ms Beckett had been highly ethical, both according to her own experience and according to the information she had derived from colleagues and acquaintances she knew were also Ms Beckett’s clients. Having read the February 2017 sentencing remarks, Ms Egan surmised that, because Ms Beckett’s behaviour was so out of character, she was likely to have been “under extra-ordinary stress” at the time of her misconduct in 2010.
Ms Watson is a barrister who has been one of Ms Beckett’s clients since mid-2013. Her 15 March 2018 letter to the Tribunal suggests that for much of the time she was unaware of the circumstances involved in Ms Beckett’s September 2010 dishonesty or the subsequent legal proceedings. She professed surprise and concern when they were disclosed to her. However, despite reading the February 2017 District Court sentencing remarks, Ms Watson endorsed the view she had previously formed, that Ms Beckett was a person of integrity. She expressed the view, arrived at from a combination of her own dealings with Ms Beckett, and what she described as a “candid” discussion in relation to the February 2017 conviction and sentencing, that Ms Beckett had been through “a massive ordeal”, was remorseful and had demonstrated insight into her wrongdoing.
Ms Andrea Goldrick is a specialist family law practitioner who has also been one of Ms Beckett’s clients for something in the order of 14 years. She characterised Ms Beckett as consistently providing appropriate and competent advice, and apparently demonstrating good understanding of taxation “legislation, rules and protocols”. Ms Goldrick, like Ms Watson, acknowledged having read the February 2017 sentencing remarks. Knowledge and understanding of those remarks did not dissuade Ms Goldrick from expressing the circumspect view that Ms Beckett was “a person of good character within my past dealings with her”.
Ms Judith McGrath is former colleague who has known Ms Beckett for more than 30 years, and has also been a client of hers for some substantial part of that period. Ms McGrath provided a recollection that she had visited Ms Beckett sometime in about September 2009 and that it was “during this period” Ms Beckett disclosed what she had done “regarding her dealings with the Office of State Revenue”. She said that Ms Beckett appeared to her not to be in control of anything in her life and “just appeared to be doing what her ex-husband told her to do”. She expressed the absolutely positive view that Ms Beckett would never re-offend.
Ms McGrath’s regard for Ms Beckett is obviously that of a loyal and supportive friend, but the generosity of her remarks understates the nature of Ms Beckett’s dishonesty in 2010, and her culpability for it. Nevertheless, her views, no less than those of the other commenders, contribute to a picture of Ms Beckett as generally competent and honest . In that respect their views are significant. But they are not views demonstrably informed by a thorough awareness of the “whole picture”. (This proposition is highlighted by the circumspect qualification expressed in Ms Goldrick’s evidence.). Neither are they views formed in the discharge of responsibility for the proper pursuit of TASA’s statutory objectives.
NON-DISCLOSURE OF THE FEBRUARY 2016 REPRIMAND
One aspect of that responsibility requires regard to Ms Beckett’s non-disclosure of the reprimand. That was a significant consideration in the Board’s November 2017 decision. The Board regarded it as corroborative of the unfitness conclusion otherwise to be drawn from Ms Beckett’s 2010 dishonesty.
Ms Beckett conceded the “No” answer to the general question in her March 2017 annual declaration was objectively incorrect. But her explanation was that, given the nature of the conduct underlying the finding, and her compliance with the requirements the Legal Profession Board of Tasmania had imposed, she did not regard the matter as materially bearing on her contemporary fitness.
Ms Beckett was wrong not to have disclosed the reprimand, but her mistaken non-disclosure does not meaningfully inform an adverse assessment of her contemporary fitness. There are two reasons why that is so. The first relates to the actual disclosure contained in Ms Beckett’s March 2017 declaration in relation to her convictions and sentences of imprisonment for the 2010 offences. In the light of those disclosures, of convictions for serious offences and substantial sentences, it is in inherently unlikely that Ms Beckett’s non-disclosure of the reprimand was anything other than a genuinely held view about the immateriality of the reprimand to any assessment of her fitness as a tax agent. That unlikelihood is corroborated by the content of the findings contained in the Legal Profession Board’s 16 February 2016 determination. The Board criticised Ms Beckett for a lack of diligence in failing to address a client complaint in a timely manner. It also characterised Ms Beckett’s apparently inconsistent explanations for delay in handing over a client’s certificate of title, as displaying a lack of competence. However, the Board made no finding of dishonesty. Its criticisms related to only one client matter. Furthermore the Board imposed no penalty and merely imposed conditions requiring Ms Beckett to compensate the client and provide an apology. Ms Beckett asserts that she promptly complied with these conditions, and there is nothing to contradict her evidence.
In those circumstances, when Ms Beckett came to provide her declaration to the Board in March 2017, there was a reasonable basis for her to have held the view that the Legal Profession Board’s February 2016 determination related solely to one client matter, that matter was unrelated to her practice as a tax agent, had been addressed by her in a timely manner in accordance with the Legal Profession Board’s requirements, and could not reasonably reflect adversely, or at least to any material extent, on her contemporary fitness. I accept Ms Beckett’s evidence that was her state of mind at the time of completing the declaration. In those circumstances, her answer to the question on the declaration form, despite being imprudent, and objectively incorrect, does not reflect adversely on her in any current assessment of her fitness.
THE PERSONAL STRESS EXPLANATION
Ms Egan surmised that Ms Beckett had been under extra ordinary stress in September 2010, and in that regard the first aspect of Ms Beckett’s own assertion about her personal situation in 2009 and 2010 (see paragraph 66 above) may be accepted. The second aspect, which points to the accumulation of stressors, is also a consideration to be taken into account. But the weight that can and should be given to those matters is doubtful. So far as financial stress is concerned, Ms Beckett’s own evidence was that she had voluntarily agreed with PL to assume the risk of being required to pay the transfer duty. Furthermore she positively asserted, and provided evidence tending to establish, that she had the funds to pay the duty. The disruption her husband is said to have caused to her office and staff was left as a rather imprecise generality. By March 2010, she had obtained a relevant restraining order against her husband. And the four staff members who Ms Beckett suggested left her employment as a result of his behaviour, appear to have departed after that, in the period from April to June 2010. It is not easy to see what relevance those circumstances may have had to Ms Beckett’s behaviour in September 2010, especially given the absence of any evidence to suggest a general decline in either the extent, or the general standard of her work. Nor is it easy to see how the stresses of Ms Beckett’s parental responsibilities, even combined with the other matters, could have contributed in any real way to the planned dishonesty in which she engaged.
The difficulty is contributed to by the content of a psychological assessment report that was done for the purposes of Ms Beckett’s sentencing for the 2010 offences. Ms Anne Lucas, an experienced forensic psychologist, had interviewed Ms Beckett on 17 February 2017. Much of the history set out in her report addresses Ms Beckett’s personal circumstances and reflects the substance of the matters I have previously summarised:- see paragraph 60 above.
Ms Lucas dealt briefly, and only generally, with the circumstances of the 2010 offences. It is apparent that she proceeded on the basis of an “agreed statement of facts” (which was not in evidence in the present proceedings). This led to her description of the matter as one where Ms Beckett had always intended to pay the stamp duty and had made things worse by attempting to cover up her mistake, when the non-payment came to light. Ms Lucas thought a contributing factor to this approach to the problem was what she called Ms Beckett’s “façade of universal competency”. Her elaboration of that comment was that Ms Beckett tended to be unwilling or unable to recognise situations where she needed assistance and where it was necessary for her to recognise a shortcoming in order to deal effectively with a difficult situation. Ms Lucas observed that whilst Ms Beckett did appear to have available support from friends and family, she had not “utilised these systems when necessary”.
In relation to the stressors Ms Beckett recounted having experienced in the period from 2007 to 2009 (i.e., the period ending at the time of the divorce decree in November 2009), Ms Lucas opined that Ms Beckett described them in a fashion indicating that they had been “somewhat distressing”, but not to the extent of having been “debilitating or beyond what could be expected given the circumstances”. In a later part of her report, Ms Lucas speculated that Ms Beckett’s 2017 recollections may have involved some degree of under reporting. Influenced by that speculation, Ms Lucas flirted with the idea that Ms Beckett may have had “mild-moderate impairment in her normal function” at the time of the events in 2010. But Ms Lucas specifically noted that Ms Beckett’s actual descriptions of her emotional distress were not “out of proportion” to the circumstances.
I recognise that Ms Beckett has conceded the dishonesty of her conduct in September 2010. Her references to the stressors affecting her personally in 2009 and 2010 were not intended to detract from that concession, as distinct from provide a context conducive to confidence that no similar misconduct was likely to recur. Nevertheless, Ms Lucas’ allusion to Ms Beckett’s apparent difficulty in recognising and addressing shortcomings calls into question the reality of the extent of Ms Beckett’s real insight. And the reservation implicit in Ms Lucas’ assessment resonates with my own impressions about some aspects of Ms Beckett’s evidence. Those aspects relate to (i) the delusion involved in her approach to the nominal duty issue in 2010, (ii) the likely inaccuracy of the suggestion she made in her affidavit evidence that after June 2010 she had continued to believe in the prospect of a nominal duty assessment and had worked to that end, (iii) her evidence that she had regarded her conduct in relation to the duty dispute as essentially an “administrative matter, (iv) the inaccurate reconstruction involved in her retrospective assertion that she could have defused the matter by pointing to her own bank account and demonstrating that she had the personal means to pay the duty and, (v) her apparent belief that between 2010 and 2016, she had sufficiently discharged her disclosure responsibilities in relation to her various registration and practising certificate renewals.
CONTEMPORARY INTEGRITY AND CHARACTER
The essential quality to which the concept of “character” alludes is that of moral quality. It is conceptually distinct from the person’s reputation:- Irving v Minister for Immigration, Local Government and Ethnic Affairs (1996) 68 FCR 422 at 425 (per Davies J) and 431-432 (per Lee J); Re Davis (1947) 75 CLR 409 at 426 per Dixon J; Plato Films Ltd v Speidel [1961] AC 1090 at 1132, per Lord Denning. But its forensic assessment may be informed by evidence of repute – subject to satisfaction that it is based on accurate awareness of, and a sound capacity to evaluate, the person’s conduct and particularly the conduct that has been impugned:- Irving v Minister for Immigration, Local Government and Ethnic Affairs (1996) 68 FCR 422 at 425 (per Davies J). Character is also conceptually distinct from, and is not merely an opinion about, a person’s conduct in relation to particular acts or omissions: Minister for Immigration and Ethnic Affairs v Baker (1997) 73 FCR 187 at 194. On the other hand, because the assessment of character is concerned with intrinsic qualities and capacities, it is not confined to consideration of a person’s usual or prevalent behaviour. Episodic, and even isolated, episodes of misconduct may, depending on their particular circumstances, provide telling objective evidence that a person is not of “good character”: Minister for Immigration and Ethnic Affairs v Baker (1997) 73 FCR 187 at 195; see also paragraph 47 above.
Against this background, the submissions advanced on Ms Beckett’s behalf recognised the difficulty presented by her past calculated dishonesty under oath:- see paragraph 59 above. But they contended the totality of the evidence overcame that difficulty. The primary emphasis was that Ms Beckett’s 2010 conduct should be regarded as remarkably aberrant, and not probative of her contemporary unfitness in 2018. That emphasis was complemented by the proposition that Ms Beckett had candidly acknowledged the dishonesty of her conduct in September 2010, and the further proposition that, apart from the reprimand matter (to which I have previously referred) it was the only instance in which her conduct had been called into question.
The proposition that Ms Beckett has been candid in acknowledging the nature and extent of her misconduct is one that is broadly correct. But aspects of her evidence detract from complete satisfaction. The circumstances in which she stamped the transfer on 10 or 11 June 2010 were, in my view, knowingly improper. At one point in her affidavit evidence in the present proceedings, she alluded to the “special trust” concept, to s 55 of the Duties Act 1997, and to versions of the OSR’s Tax Handbook, with a view to suggesting that there had been some relevant change in the OSR’s practice – despite the absence of any change to the legislation itself. At other points in her affidavit, she said that even after receipt of the OSR’s 30 March 2010 letter, she still believed that the transfer might attract only nominal duty, and she had continued to work towards that end.
This evidence was not credible. As I pointed out earlier in these reasons, Ms Beckett’s attempted reliance in 2009 – 2010 on the nominal duty provisions in the Duties Act 1997 had no foundation. That fact was readily apparent from a cursory knowledge of those provisions and familiarity with the information actually available to Ms Beckett at the time. The inapplicability of those provisions to the contentious transfer had nothing to do with the contents of the OSR handbooks. Ms Beckett ultimately conceded as much when, after being taken to the actual legislative provisions, and to the communications she had exchanged with the OSR, she conceded that her asserted view had been deluded. When she was asked what work she had in fact done to attempt to establish any nominal duty entitlement, after receiving the OSR’s 30 March 2010 letter she was unable to point to anything specific. The reality is that (i) she did nothing and, (ii) the possibility of establishing any nominal duty entitlement had been foreclosed by the contents of the statutory declaration she had provided to the OSR with her 15 March 2010 letter. Her evidence that she discussed the matter with the client, in the context of a discussion that the actual duty obligation was unavoidable, reflects a contemporaneous recognition of that reality:- see paragraph 11 above. Her inactivity in following the matter up between June and September 2010, and her concession that she “went to ground” in avoiding the OSR’s enquiries, all betray a contemporaneous awareness of the reality and unavoidability of the duty obligation in relation to the transfer.
A related aspect of Ms Beckett’s lack of insight into the full extent of her misconduct in 2010 relates to the proposition that her dishonesty during the September 2010 interview was bizarre – because she could readily have demonstrated that she in fact had enough personal funds of her own to pay the duty. In support of that proposition, Ms Beckett’s affidavit evidence included copies of statements from one of her bank accounts. The statements showed that (i) from 9 to 23 June 2010 and for most (but not all) of the period from 24 June to 9 August 2010 her account balance substantially exceeded the duty amount, and (ii) for most (but not all) of the period from 9 August to 27 September, her account balance exceeded the amount of the primary duty amount. Ms Beckett’s resort to this evidence was a retrospectively embraced irrelevance. In 2010, she well understood that the OSR’s EDR Guidelines required her to have the client’s funds available to her when she stamped documents as an approved person. Some of the specific lies she told during the course of the 28 September 2010 interview eloquently testify to that contemporary understanding:- see paragraphs (a), (b) (e) & (f) above. Clearly, one of the purposes of those lies was to avoid detection of the basic impropriety of what she had done in stamping the transfer in June 2010.
The observations I have made in the preceding paragraph provide part of the background for my inability to accept the proposition that Ms Beckett’s dishonesty during the 28 September 2010 interview ought not be characterised as relevantly premeditated. The better view of her conduct is that it was indeed calculated and intentional. The truth of the matter is that Ms Beckett stamped the transfer without PL having provided the funds and with no intention that she would herself timeously discharge that payment obligation. She stonewalled the OSR’s enquiries throughout July and August, and must have anticipated the criticism that both of those deficiencies would attract. She conceived the idea of altering the cheque dates to deflect that criticism, and implemented that idea with the elaborate “trial and error” photocopying process. Finally, she carried out her pre-conceived plan of deception after taking an oath to be truthful.
The further proposition advanced on Ms Beckett’s behalf was that her deception in relation to the cheques was so likely to be readily detected (by enquiry of the Banks) as to justify the conclusion that her conduct should be properly be considered as an ill thought out panic reaction, and thus one that should be truly regarded as aberrant. In a sense this proposition is objectively accurate – as is perhaps evidenced by the course of the criminal proceedings that eventuated three years later. But it is not a proposition that materially diminishes the character or significance of Ms Beckett’s dishonesty. There is no doubt that she intended to deceive the OSR examiners. There is no doubt that she did so for at least the purpose of avoiding criticism of her past misconduct in stamping the transfer. It is likely that she also intended to achieve some further delay before she was personally required to pay the outstanding duty. In attempting to achieve those ends, she intentionally backdated the copy cheques more than 12 months, in the expectation that doing so would result in them being classified as “stale” and unlikely to be honoured. The fact that Ms Beckett may have overlooked the possibility of prompt detection of the real date of the cheques, and her personal role in obtaining them, does not diminish the significance of the intentional dishonesty that she conceived and carried out.
As the observations of Davies J (in Su) and Hill J (in Stasos) emphasise, there is no more fundamental obligation of a tax agent than that of honesty. Given that fundamental obligation, it is beside the point that Ms Beckett’s conceded dishonesty occurred primarily in her capacity as a solicitor and unrelated to the administration of the commonwealth taxation laws to which her tax agent’s registration related. Ms Beckett conceded that immediately after the 28 September 2010 interview she knew she had lied on oath and believed that she had committed an offence. At various points in her evidence in the present proceedings, Ms Beckett was asked whether or not that awareness had caused her to consider her fitness. In her first response to those questions she said she had actually considered the matter, but concluded that her conduct did not reflect adversely on her integrity or character. In answer to a further question, she conceded that she had been concerned about the extent of her disclosure obligations, and that after the criminal proceedings began in 2013, she had asked her counsel about her disclosure obligations. (That request was apparently specifically in relation to the “pervert the course of justice” charge.) Later in her evidence, and perhaps referring specifically to her state of mind between September 2010 and the May 2013 commencement of the criminal proceedings against her, Ms Beckett professed not to have then appreciated that her conduct adversely affected her fame, character and integrity, or her fitness. I do not accept that latter evidence as a reliable recollection of reality. Ms Beckett had been contemporaneously aware of the misconduct involved in the June 2010 stamping, and had lied to conceal it. That conduct itself betrayed a September 2010 awareness of, and defensive sensitivity about, a much less significant matter than lying on oath. It is glaringly inconsistent, and not credible, that between the September 2010 interview and May 2013 she failed to appreciate that her lies on oath had compounded her earlier misconduct, and gravely impugned her continuing fitness – not only for registration as a tax practitioner, but also as a legal practitioner.
Ms Beckett’s silence about her serious dishonesty for almost six years (i.e., until she responded to the Board’s 21 July 2016 enquiry and request for comments:- see paragraph 31 above) does her no credit, and was likely in breach of the notification obligation in TASA s 30-35:- see paragraph 26(c) above. As a partial explanation for her silence, she elaborated on the advice she said she had obtained from her senior and junior counsel in 2013. She said that her specific request had been about her obligation to disclose the Crimes Act 1900 s 319 charge, in relation to both her practising certificate and her professional indemnity insurance. Their advice, given in the knowledge of the dishonesty she fully disclosed to them, was that she was not obliged to disclose her conduct unless and until she had been convicted.
Ms Beckett’s reliance on her counsel’s advice does not adequately explain her non-disclosure to the Board prior to the February 2017 disclosure of her guilty plea. The first point to be made is that her February 2013 renewal application preceded the May 2013 indictment, and the advice she sought in relation to it. Ms Beckett was not specifically asked about the circumstances in which she completed either that application, or the subsequent renewal application in February 2016. But she was challenged with the general proposition that she had intentionally not disclosed her conduct to the Board because of her subjective apprehension that disclosure would be likely to result in an adverse assessment of her fitness. In response to this question, she denied that concern and provided the explanation that the application questions reference convictions. I have summarised the content of the two application forms earlier in these reasons:- see paragraphs 29 to 31 above. As that summary shows, Ms Beckett’s asserted recollection of them was flawed. In each application form, the final question about fitness asked whether “there are any matters or events that may affect your good fame, integrity and character”. There was no ambiguity about this question. It was explicitly not confined to any particular time period. It was certainly not confined to convictions – because they were the subject an earlier specific question. In Su, Davies J was particularly critical of an agent’s similarly inaccurate statement. His Honour’s criticism, which has an analogous force in relation to Ms Beckett’s conduct, was in the following terms (at 61 FLR 10).
The annual notice which a tax agent is required to lodge with the Tax Agents' Board is a clear and simple notice but nevertheless an important one. Mr. Su's failure to correctly complete the last three annual notices which he has lodged with the Tax Agents' Board of South Australia is, in my view, of itself, probably sufficient to warrant his removal from the register. A person who does not complete such a form accurately is not a person of sufficient competence and integrity to hold the privilege of acting for clients in the preparation and lodgement of their income tax returns.
In relation to the advice Ms Beckett says she received from her counsel, the circumstances in which it was given, and its content, are only evidenced by Ms Beckett’s recollection. That is not to say her recollection was other than honestly asserted, but its accuracy in relation to the precise questions she asked, and the assertedly unqualified content of the advice, appears likely to be another matter. There are a number of considerations relevant to that appearance. First, the fact that the advice was apparently sought after the date of the May 2013 indictment, and not specifically in relation to any renewal application, suggests it may have been directed at the question of ongoing disclosure obligations, specifically in connection with her then current professional indemnity insurance and her solicitor’s practising certificate. Second, if the question was specifically about the particular charge under s 319 of the Crimes Act (as Ms Beckett recalled), it may be that the advice was directed at that specific question, rather than to the underlying dishonest conduct. Third, unless the advice was confined to a narrow disclosure issue of those kinds, it is inherently surprising – because Ms Beckett’s dishonesty under oath did fundamentally call her ongoing fitness into question, and she was subject to the specific disclosure obligation imposed by TASA s 30-35(1)(a). Without knowing the precise circumstances and content of the barristers’ advice, it is difficult to come to any conclusion other than that it seems objectively surprising, unlikely to have addressed all the relevant considerations, and unlikely to have been correct. Furthermore, to a person who was aware, as Ms Beckett must be taken to have been aware, of the content of the 2013 and 2016 renewal application forms, the barristers’ advice did not address, and could not have justified, the propriety of her “no” answer to the general question. When I pressed Ms Beckett about the apparently contemporaneously obvious inadequacy of the barristers’ advice – given her contemporaneous belief that she had in fact committed an offence of dishonesty – she said the point had not occurred to her, because she did not know how criminal matters proceed, and she did not appreciate at the time that her offence in relation to her professional practice went directly to the question of her honesty and integrity. This answer was, in my view, unpersuasive and unreliable – given Ms Beckett’s evidence that she had sought the advice because of her apprehensions about her professional status.
The proper conclusion to draw from the evidence is that Ms Beckett was indeed aware her conduct, preceding and during the 28 September 2010 interview, adversely impacted on her fitness. As an experienced solicitor of approximately 20 years standing, she could hardly have thought otherwise. The advice she obtained from counsel in 2013 about the absence of a specific obligation to disclose the s 319 charge itself did not specifically address the content of her renewal related obligations. She had already acted on her own in attempting to discharge those obligations, but she did so in a self-interested and inadequate way. In expressing that view, I am influenced, adversely to Ms Beckett, but the content of her 26 August 2016 response to the Board’s request for her comments on the s 319 charge and the likelihood of that charge affecting her fitness. Ms Beckett’s response did disclose that the indictment had been amended to refer to the s 330 offence and that the matter would go to hearing on 5 September 2016. But it provided no meaningful comment in response to the Board’s specific request – this despite the fact that Ms Beckett must have known (as she effectively conceded in the present hearing) that (i) the s 330 false evidence charge was a serious matter and that she had no defence to it. Furthermore, after the Board’s 19 September 2016 reminder that Ms Beckett had an obligation (specifically referring to TASA s 30-35 relating to changed circumstances) to inform the board of “any adverse outcomes”, and notwithstanding that she had in the interim pleaded guilty to the s 254 charges, Ms Beckett did not respond to the Board for another four and half months.
In making the preceding comments about Ms Beckett’s inadequate disclosures (and absence of notification) prior to March 2017, I am conscious of the facts that (i) the Board’s 9 November 2017 decision did not rely upon them, (ii) their potential significance was raised only at the hearing, (iii) Ms Beckett was not specifically cross examined about her pre 2017 renewal applications and, (iv) the evidence about the circumstances and content of the advice she received from her former barristers was, in those circumstances, understandably imprecise. For all of those reasons, I do not intend to express any affirmative view that Ms Beckett’s conduct in relation to either her absence of notification or the content of her various renewal applications was knowingly improper and, for that reason, independently probative, or corroborative, of her current absence of good character and fitness. The approach I should be understood to have taken is that the fact of Ms Beckett’s non-disclosure detracts, in the absence of adequate explanation, from the ability to arrive at a properly informed affirmative assessment of her contemporary good character.
CONTEMPORARY FAME
I alluded earlier to the conceptual distinction between reputation and character:- see paragraph 82 above. I have also provided illustrations of situations where a person’s current status as a person under sentence have been regarded, either expressly or implicitly, as inconsistent with (and likely precluding) a favourable contemporary assessment of a person’s fame:- see paragraph 46 above. The likely propriety of such a conclusion is consistent with proper regard to the mandatory considerations set out in TASA s 20-15:- see paragraph 25 above.
In the present case, the submission was that Ms Beckett’s contemporary good fame was sufficiently established by the evidence of the commenders (whose evidence I have earlier outlined:- see paragraph 67 above.) There are two reasons why I do not accept that proposition. The first is that Ms Beckett has (or had) a client base of about 1,400. The positive endorsements proffered to evidence her good fame come from only three of them. Second, good fame requires a broader, and more impressionistic assessment than a person’s repute amongst their informed intimates. As Johnson J said in Jackson v Legal Practitioners Admission Board [2006] NSWSC 1338:-
[56] Whilst there is a certain overlapping of the two terms “fame” and “character”, there is a distinction. Fame involves being known, favourably, by a large section of the public, whilst character is directed to a more objective evaluation which might conflict with what the general public thinks: Clearihan v Registrar of Motor Vehicle Dealers in the ACT (1994) 122 ACTR 25 at 29 (Miles CJ).
Ms Beckett’s current status is that of a person who has been convicted of two charges of using false documents to influence the exercise of a public duty. She has also publicly acknowledged her guilt of a further offence of knowingly making a false statement under oath. She has been sentenced to imprisonment for a, currently unexpired, period of 20 months, and is subject to a good behaviour bond. Those circumstances are, in my view, incompatible with Ms Beckett currently being regarded as a person who can properly be characterised as of “good fame”.
CONCLUSION
I am conscious of the gravity of the present proceedings and the potential personal implications for Ms Beckett, and for her family, of their adverse resolution. Nevertheless, on the basis of the material before me, I have reached a firm view of absence of satisfaction that Ms Beckett is currently a person of either good fame, or a person of good integrity and character. For those reasons, which operate both individually and in combination, I am also not satisfied of Ms Beckett’s current fitness for registration as a tax agent.
Despite that firm view, nothing I have said should be taken to have significance beyond the circumstances disclosed in the material I have considered. In particular, I should not be taken to have expressed any view foreclosing the possibility of a favourable outcome of any future, properly supported, registration application that Ms Beckett may be advised to make.
The decision under review is affirmed.
I certify that the preceding 100 (one hundred) paragraphs are a true copy of the reasons for the decision herein of Mr P W Taylor SC, Senior Member
....................................[sgd]...................................
Associate
Dated: 14 June 2018
Dates of hearing: 18-19 and 26 April 2018 Counsel for the Applicant: Mr D Robertson Solicitors for the Applicant: Mr D Cleverley, Hammond Nguyen Turnbull Solicitors for the Respondent: Ms L Paolucci
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