Birdseye v Tax Practitioners Board
[2020] FCA 1235
•24 July 2020
FEDERAL COURT OF AUSTRALIA
Birdseye v Tax Practitioners Board [2020] FCA 1235
File number: QUD 168 of 2020 Judge: LOGAN J Date of judgment: 24 July 2020 Catchwords: PRACTICE AND PROCEDURE – where the first respondent cancelled the registration of the applicants – where the Administrative Appeals Tribunal (the Tribunal) refused an application for a stay of the first respondent’s decision – where the applicants applied for judicial review of the Tribunal’s decision refusing the stay – whether the wrong legal test was applied with respect to s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) – whether the Tribunal’s decision was unreasonable Legislation: Constitution (Cth) s 75
Administrative Appeals Tribunal Act 1975 (Cth) s 41
Administrative Decisions (Judicial Review) Act 1977 (Cth) s 5
Judiciary Act 1903 (Cth) s 39B
Tax Agent Services Act 2009 (Cth)
Cases cited: ARG15 v Minister for Immigration and Border Protection (2016) 250 FCR 109
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Australian Securities and Investments Commission v PTLZ (2008) 48 AAR 559
Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353
Birdseye and Tax Practitioners Board [2020] AATA 1250
Buck v Bavone (1976) 135 CLR 110
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 41 FLR 338
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Foley v Padley (1984) 154 CLR 349
Ham v Tax Practitioners Board (2018) 108 ATR 869
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Minister for Immigration and Border Protection v Eden (2016) 240 FCR 158
Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1
Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259
Poidevin and Australian Securities and Investments Commission (2018) 74 AAR 137
R v Connell; Ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407
Scott and Australian Securities and Investments Commission (2009) 51 AAR 114
Shell Co of Australia Ltd v Federal Commissioner of Taxation (1930) 44 CLR 530
Shi v Migration Agents Registration Authority (2008) 235 CLR 286
Zarfati v Australian Securities and Investments Commission (2008) 106 ALD 225
Date of hearing: 24 July 2020 Registry: Queensland Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 49 Counsel for the Applicants: Mr N Shaw Solicitor for the Applicants: Case Legal Pty Ltd Counsel for the First Respondent: Ms G Walker Solicitor for the First Respondent: Australian Government Solicitor Solicitor for the Second Respondent: The Second Respondent filed a submitting notice, save for the question of costs ORDERS
QUD 168 of 2020 BETWEEN: NICHOLAS GUY BIRDSEYE
First Applicant
CLAIM IT (SA) PTY LTD ACN 065 364 945
Second Applicant
AND: TAX PRACTITIONERS BOARD
First Respondent
ADMINISTRATIVE APPEALS TRIBUNAL
Second Respondent
JUDGE:
LOGAN J
DATE OF ORDER:
24 JULY 2020
THE COURT ORDERS THAT:
1.The application be dismissed.
2.The applicants pay the first respondent’s costs of and incidental to the application to be assessed by a registrar if not agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)LOGAN J:
In the discharge of its function as a regulator of a profession under the Tax Agent Services Act 2009 (Cth) (the Act), the Tax Practitioners Board (the Board) cancelled, with effect from 1 April 2020, the registration under that Act of Mr Nicholas Birdseye and Claim It (SA) Pty Ltd (the company). Mr Birdseye and the company were also, by the Board’s decision, prohibited from applying for registration under the Act for a period of five years.
Mr Birdseye is the sole director of the company. He is also a 50% shareholder in the company. Mr Birdseye is presently in his mid-60s. He has been practising as a tax agent in one way or another for many years. Mr Birdseye and the company forthwith after the Board’s decision applied to the Administrative Appeals Tribunal (Tribunal), as the Act permitted, for the review of the Board’s decision.
On 31 March 2020, Deputy President McCabe granted what might be termed an interim stay of the operation of the Board’s decision, subject to conditions pending the hearing and determination of the application for a stay pending the hearing and determination of the review application. That stay application was heard by the Tribunal (Senior Member Olding) on 24 April 2020. On 8 May 2020, for reasons given in writing that day, the Tribunal decided to refuse Mr Birdseye’s and the company’s application for a further stay of the Board’s decision (see: Birdseye and Tax Practitioners Board [2020] AATA 1250).
On 4 June 2020, both the company and Mr Birdseye applied to this Court for the judicial review of the Tribunal’s decision refusing further to stay the operation of the Board’s decision. An expedited hearing of that application was sought. Though a date in June was offered, it transpired that it better met the convenience of the applicants in particular not to hear the application then, but rather, in the end, today.
The application in its amended form seeks to invoke the Court’s jurisdiction under either or each of s 39B of the Judiciary Act 1903 (Cth) (Judiciary Act) and the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act).
On any view, the Court has jurisdiction to review the Tribunal’s decision under s 39B of the Judiciary Act. That jurisdiction, for present purposes, is no different to that of the High Court under its constitutionally entrenched jurisdiction conferred by s 75(v) of the Constitution (Cth). The nature of that jurisdiction and, it follows, that of this Court, is that it is incumbent upon an applicant first and foremost to demonstrate that the impugned decision is attended with jurisdictional error. If so, a discretion may, nonetheless, arise as to whether or not it is appropriate to grant relief.
That jurisdiction is not completely to be assimilated with the jurisdiction granted to this Court under the ADJR Act. Nonetheless, for present purposes, it is unnecessary to decide, as it was not in Australian Securities and Investments Commission v PTLZ (2008) 48 AAR 559 (ASIC v PTLZ) whether or not the ADJR Act is a further source of jurisdiction. That is because, if Mr Birdseye and the company are unable in the circumstances of this case to demonstrate jurisdictional error, it would not be possible for them alternatively to demonstrate a ground for which s 5 of the ADJR Act provides. The Board was content to assume that each jurisdictional foundation was apt. That may or may not be correct, but, as I have indicated, it is truly unnecessary to decide the point because, on any view, the Court’s jurisdiction has been regularly invoked, at least under s 39B of the Judiciary Act.
The grounds upon which Mr Birdseye and the company allege jurisdictional error are these:
(a)The Tribunal made an error of law by failing to consider whether the matters alleged by the Board against the applicant, if proven, were sufficient to support cancellation of the applicants’ registrations, or alternatively failed to give reasons in respect of that consideration (Ground One);
(b)The Tribunal made an error of law by applying the wrong legal test to assess the merits of the applicants’ case on review and failed to take into account relevant considerations in applying that test (Ground Two);
(c) The decision was unreasonable (Ground Three).
It is convenient to commence with a consideration of Ground Two. So doing requires that the Tribunal’s statutory power to grant a stay, insofar as presently material, as found in s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) be set out:
(2)The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
In their joint judgment in ASIC v PTLZ, North and Downes JJ were at pains to emphasise, in a section of their reasons so entitled “The importance of referring to the words of the legislation”, the following, at [34]:
34.The starting point for any matter in the Tribunal is the legislation from which it derives its jurisdiction. Because it is not a court, the Tribunal has no common law or inherent jurisdiction. In the present case the source of jurisdiction is ss 41 and 35. In most cases the words of the legislation will be a sufficient guide to the Tribunal’s exercise of jurisdiction. This is particularly so in interlocutory applications where “expedition” (s 33(1)(b)) assumes particular importance. Naturally, there will be occasions when decided cases will provide guidance, but the actual words of the legislation should provide the primary point of reference to which point it may be wise to return from time to time during the process of deliberation. As Hayne and Heydon JJ very recently said in Shi v Migration Agents Registration Authority (2008) 235 CLR 286; 48 AAR 345 at [92]:
As this Court has so often emphasised (see, for example, Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict) (2001) 207 CLR 72; [2001] HCA 49 at [9] per Gaudron, Gummow, Hayne and Callinan JJ, 89 [46] per Kirby J; Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520; [2001] HCA 53 at [11] per Gleeson CJ, Gummow, Hayne and Callinan JJ, 545 [63] per Kirby J; The Commonwealth v Yarmirr (2001) 208 CLR 1; [2001] HCA 56 at [11]-[15] per Gleeson CJ, Gaudron, Gummow and Hayne JJ, 111-112 [249] per Kirby J; Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1; [2003] HCA 59 at [7]-[9] per Gleeson CJ, McHugh, Gummow and Hayne JJ; Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193; [2005] HCA 58 at [30] per Gleeson CJ, Gummow, Hayne and Heydon JJ, 240-241 [167]-[168] per Kirby J; Weiss v The Queen (2005) 224 CLR 300; [2005] HCA 81 at [31] per Gleeson CJ, Gummow, Kirby, Hayne, Callinan and Heydon JJ) in recent years, questions presented by the application of legislation can be answered only by first giving close attention to the relevant provisions. Reference to decided cases or other secondary material must not be permitted to distract attention from the language of the applicable statute or statutes. Expressions used in decided cases to explain the operation of commonly encountered statutory provisions and their application to the facts and circumstances of a particular case may serve only to mask the nature of the task that is presented when those provisions must be applied in another case. That masking effect occurs because attention is focused upon the expression used in the decided cases, not upon the relevant statutory provisions.
Kirby J made similar observations in Shi at [25]. These passages reflect the statement made a little earlier by Callinan and Heydon JJ in McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423; 43 AAR 151 at [131],when speaking of the application of freedom of information provisions:
We would prefer to ask the question in terms of the language of the legislation itself, rather than any adaptation of it, because the former is perfectly clear in asking whether there exist reasonable grounds for the claim that the disclosure of the documents would be contrary to the public interest.
[emphasis added]
In this case the emphasised passage from the joint judgment of Hayne and Heydon JJ in Shi v Migration Agents Registration Authority (2008) 235 CLR 286, at [92] (Shi) in the above quote is of particular importance.
It was apparent from the way in which error was alleged on the part of the Tribunal that, whilst the statutory prescription in s 41(2) of the AAT Act was not, with respect, ignored, nonetheless, the basis upon which error was said to be found in terms of the application of an allegedly overly rigorous test was informed by an earlier decision of the Tribunal in which the Tribunal had made observations as to considerations which might be taken into account in determining whether or not to grant a stay of the operation of a decision under review. That decision is Poidevin and Australian Securities and Investments Commission (2018) 74 AAR 137 (Poidevin).
Particular care needs to be taken in relation to statements (in cases such as Poidevin and, for that matter, another, Scott and Australian Securities and Investments Commission (2009) 51 AAR 114 (Scott)) of considerations which might be taken into account lest the vice identified in Shi, which so commended itself to North and Downes JJ in ASIC v PTLZ, be committed. The provision in s 41(2) for the granting of a stay of the operation of a decision is of the kind described by Latham CJ in the R v Connell; Ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 (Connell), at 430, where his Honour said:
… where the existence of a particular opinion is made a condition of the exercise of power, legislation conferring the power is treated as referring to an opinion which is such that it can be formed by a reasonable man who correctly understands the meaning of the law under which he acts. If it is shown that the opinion actually formed is not an opinion of this character, then the necessary opinion does not exist.
To this, his Honour added later, at 432:
… It should be emphasized that the application of the principle now under discussion does not mean that the court substitutes its opinion for the opinion of the person or authority in question. What the court does do is to inquire whether the opinion required by the relevant legislative provision has really been formed. If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational, or not bona fide.
Those particular statements by Latham CJ in Connell were approved by Gibbs CJ and Brennan J in Foley v Padley (1984) 154 CLR 349, at 353 and 370. Another notable discussion of the basis for the review of statutory powers which are conditioned upon a state of administrative satisfaction is to be found in the judgment of Sir Owen Dixon in Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353, at 360: see also Buck v Bavone (1976) 135 CLR 110, at 118 – 119, in the judgment of Gibbs J, as his Honour then was.
The counselling in ASIC v PTLZ, to have regard to the terms of the statute did not, with respect, go unnoticed by Senior Member Olding. That is because, in commencing his discussion of applicable legal principles in respect of a stay, he expressly commenced that discussion by reproducing the text of s 41(2) and making an opening observation in relation to it, at [26] and [27]:
26.However, a party to a proceeding before the Tribunal, subject to exceptions that do not arise in this case, may apply for a stay of a decision under s 41(2) of the AAT Act, which states:
(2)The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
(Emphases added.)
Relevant considerations
27.As will be seen from the highlighted portions of s 41(2) extracted above, to make a stay order the Tribunal must be of the opinion that it is “desirable” to do so and consider that the order is appropriate “for the purpose of securing the effectiveness” of the hearing and determination of the relevant application for review. A stay may be subject to conditions (s 41(6)(a)) and instead or in addition to a stay the Tribunal may make orders “otherwise affecting the operation or implementation of the decision”.
[emphasis in original]
Having so done, and unsurprisingly, the Senior Member then made reference to Scott and also Poidevin, but that was against the background of appreciating that his task was that set out in the statute.
That the Tribunal approached matters in this way makes it very difficult, in my view, to establish Ground Two. If anything, Ground Two proceeds from a premise which is not, having regard to ASIC v PTLZ, appropriate. It seeks to fight the jurisdictional error battle on a ground of the applicants’ choosing, rather than that of Parliament’s. It is apparent from the Tribunal’s reasons in the passage to which I have referred that the Tribunal has been informed overarchingly by the language of the statute, as it ought to have been.
That said, there is no doubt, because it reflects, doubtless, the way in which the case came to be presented, that the Tribunal has looked to considerations which have been regarded as appropriate to examine in forming an opinion as to desirability of the kind specified in s 41(2) of the AAT Act. There is no necessary error in so doing, providing it is clearly appreciated that these considerations are neither prescriptive nor exhaustive of a task the metes and bounds of which is, and can only be, as specified in s 41(2) itself.
In turn, that prompts me to make this observation as to an understanding voiced by the Tribunal of ASIC v PTLZ in Zarfati and Australian Securities and Investments Commission (2008) 106 ALD 225, at [12] (Zarfati). Having noted that in ASIC v PTLZ, the court had emphasised the importance of focusing on the terms of the provision, the Tribunal added:
12.… The court in that case did not disturb the existing test, however, as laid down, inter alia, in Re XTWK and Australian Securities and Investments Commission [2007] AATA 1890; (2007) 98 ALD 131 at 134 where the following matters relevant to the exercise of the discretion to grant a stay were set out:
(a) the prospects of success or the merits of the application for review;
(b)whether there will be prejudice to the parties or anyone else if a stay is not granted;
(c) whether it is in the public interest to grant a stay; and
(d)whether the review application, if successful, would be rendered nugatory or pointless if the stay is not granted.
The considerations referred to by the Tribunal in Zarfati are no different to those mentioned in Scott. Scott, it must be recalled, was a decision of the Tribunal’s then President, Downes J, who participated in the joint judgment in ASIC v PTLZ, so his Honour’s participation in the observations in that joint judgment is particularly powerful. I do not, with respect, agree with the formulation “existing test” in Zarfati. That, truly, is apt to mislead for just the reasons given in the joint judgment in ASIC v PTLZ. It is singularly important that there be no checklist approach in the Tribunal to the detriment of appreciating the overall statutory task as set out in s 41(2).
As I have observed, Senior Member Olding, in my view, did not narrowly confine his consideration. I emphasise that is apparent in the way in which he commenced the material part of his reasons. What followed was reactive to a particular way in which the case was presented, and also to considerations which earlier cases have regarded as useful to which to advert. The Senior Member did not, in my view, commit the vice of regarding them as either prescriptive or exhaustive.
What follows from this is that the alleged jurisdictional error of applying the wrong test is not, at a general level of abstraction, made out. Nonetheless, it is desirable to address the particular way in which a wrong test was said to have been applied. That was said to be because there had been a misapplication of the discussion in Poidevin.
As mentioned already, even to advert to that discussion is to try to fight a battle on a ground of the applicants’ choosing rather than Parliament’s. Nonetheless, it may be accepted that an applicant for a stay is in no way required to demonstrate that he, she, or it, as the case may be, must succeed upon a review on the merits of the decision. At most, all that one must show is that there is a basis in the material before the Tribunal for forming the opinion that it is “desirable”, in order to preserve the effectiveness of the review, to grant a stay. As to that, to use the term “onus” would be inapt, having regard to the very nature of the administrative review conducted by the Tribunal. That would be to adopt language from a different discourse, namely, that of an exercise of judicial power: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259.
Nonetheless, it is, obviously, in the interests of an applicant to be able to point to something in the material before the Tribunal which engenders the requisite opinion as to desirability. That might be found in what was already before the primary decision maker whose decision is under review. It might be found not in factual material before that decision maker, but rather, in the approach to the construction of the statute empowering the making of the decision concerned. Thus, it may be that there is, even aside from any factual controversy, an arguable proposition of law. It may be each of those. The foundation may also be in additional material which was not before the primary decision maker but has been introduced, or at least can be shown to be reasonably in prospect of being introduced, having regard to the particular stage of the proceedings.
It, truly, is neither necessary, nor desirable, to set metes and bounds as to what may engender appropriately the requisite desirability opinion other than to observe that, as with any administrative decision, there must be some material before the Tribunal which is reasonably capable of engendering the requisite opinion.
In this instance, the Tribunal examined meticulously, having regard to its reasons, such of what was presently before it as the parties chose to highlight. It did not, and it need not have, in so doing advert to matters which the parties themselves chose not to highlight. The end result of that was the formation of an opinion which was informed by multifaceted considerations to which I shall advert to shortly. For the present, it should also be observed, and regard to the transcript of the hearing confirms what is evident from the Tribunal’s reasons, that much attention was placed on behalf of Mr Birdseye and the company on the hearing of the stay application on an asserted denial of procedural fairness on the part of the Board in making its decision. That is explanatory of particular passages in the Tribunal’s reasons.
It seems to have been thought, on behalf of those then advising Mr Birdseye and the company, and I emphasise that they did not include Mr Shaw of counsel who appeared today for them, that it would be a basis for setting aside the Board’s decision that the Board had denied Mr Birdseye and the company procedural fairness. That emphatically could not be so. It was sufficient to engage the Tribunal’s jurisdiction if there were what at least purported to be a cancellation decision under the Act: see Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 41 FLR 338 (Brian Lawlor). The fresh hearing on the merits and with that an opportunity to be heard would rectify any procedural fairness lapse by the Board. The role of the Tribunal was not to look for jurisdictional error, but rather, to decide for itself what was the correct or preferable decision: see Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409, at 419. The jurisdiction exercised by the Tribunal was that found to be constitutionally available in terms of Commonwealth legislative power to confer on the executive branch long ago in Shell Co of Australia Ltd v Federal Commissioner of Taxation (1930) 44 CLR 530.
Senior Member Olding, in my view, correctly appreciated the position in relation to the allegation of procedural fairness, although there are some passages which, read in isolation, might be thought otherwise. The Senior Member stated, at [46]:
46.Consideration of that question would not require the Tribunal to formally decide whether procedural fairness was afforded by the Board, nor would it be appropriate to do so in the context of stay applications. However, I have concluded that I should consider the argument that the Board denied the Applicants procedural fairness, since:
(a)the procedural fairness issue was at the heart of the Applicants’ submissions;
(b) it is at least theoretically possible that, if a finding of denial of procedural fairness were made, the Tribunal could set the termination decisions aside and remit the matters to the Board for reconsideration;
(c)that possibility is relevant to whether I should be satisfied the Applicants might achieve a different result in the substantive applications; and
(d)Dr Gray submitted that the procedural fairness issue could be resolved as a preliminary issue and stays granted until that occurs.
Read in isolation, [46(b)] is at odds with Brian Lawlor. However, it appears that the use that the Tribunal made in the end of the emphasis in the submissions about procedural fairness was that it might explain why it was that Mr Birdseye and the company had not been able to put a particular body of material before the Board prior to the Board’s making of its decision.
That any procedural fairness lapse by the Board had that limited role, although nothing more, was, in my respectful view, an approach correctly taken on their behalf of the applicants on the hearing of the judicial review application, and also by the Board. It is, necessary to read the Tribunal’s reasons in light of a different emphasis which was given to that subject on the hearing of the stay application.
The Tribunal stated, at [30], and having regard to Poidevin, that:
30.… I do not conduct a “mini trial” but it is incumbent on the Applicants to establish the existence of facts or the possibility of legal error that may lead to a different result.
[emphasis in original, footnote reference omitted]
I see no error of law in that formulation, providing one bears in mind that there is no formal onus. It is just that it is for an applicant to make out a case and so doing requires at least some material, in fact, or in legal proposition, reasonably to admit the Tribunal of the formation of an opinion as to desirability of the granting of a stay.
What follows then, from this perhaps overlengthy discussion, is that I see no merit in Ground Two.
Ground One, on analysis, may conveniently be considered with Ground Three. Some of what I have already said in relation to Ground Two is also relevant to, and destructive of, Ground One in relation to the construction of s 41(2) and what is, or is not, to be taken into account in forming the requisite opinion.
In relation to Grounds One and Three, it is necessary to commence by recalling what was said as to irrationality or illogicality as a jurisdictional error ground by Crennan and Bell JJ in Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611, at [131] (SZMDS), where their Honours stated that the task:
131.… must be to ask whether logical or rational or reasonable minds might adopt different reasoning or might differ in any decision or finding to be made on evidence upon which the decision is based. If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion.
That formulation is not exhaustive as to what might amount to jurisdictional error in a factually-based decision sought to be impeached on the basis of illogicality or irrationality: see ARG15 v Minister for Immigration and Border Protection (2016) 250 FCR 109, at [47]. It is, though, not necessary in this case to do other than recall the statement in SZMDS.
Of course, unreasonableness is not to be assimilated just with the illogical or irrational or, as one might say, the bizarre. So much is evident from the joint judgment of Hayne, Kiefel and Bell JJ in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332. In their joint judgment, their Honours emphasised further that the metes and bounds of unreasonableness as a jurisdictional error ground were not confined to those memorably described in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. Their Honours referred, at [72], with evident approval to an observation made by Sir Anthony Mason in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, at 41 (Peko-Wallsend):
It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power: Sean Investments Pty. Ltd. v. MacKellar; Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd.; Elliott v. Southwark London Borough Council; Pickwell v. Camden London Borough Council. I say “generally” because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is “manifestly unreasonable”.
[footnote references omitted]
It is necessary firmly to remember that the references in this passage to “adequate weight” and “exercise weight” are not a licence for the judicial branch to usurp the function of the executive branch and engage in merits review. These particular considerations were also discussed by me with reference to later authority in the High Court and in the Full Court of this Court in Ham v Tax Practitioners Board (2018) 108 ATR 869, at [54] and following.
The Tribunal gathered its assessment in relation to prospects together, at [103] – [105]:
103.For the reasons already outlined, I am not satisfied that the Applicants have reasonable prospects of persuading the Tribunal on the basis of denial of procedural fairness to set aside the decisions and remit them to the Board for further consideration, either in a substantive hearing of the applications for review or in a preliminary hearing confined to the procedural fairness issue.
104.In relation to the Applicants’ prospects in a substantive hearing on other bases, the earlier discussion of the Board’s findings demonstrates what I am left with is at least this:
(a)substantial and ongoing non-compliance with personal tax obligations, both as to lodgement and payment, and across a number of entities, the details of which are either implicitly accepted or not denied by the Applicants;
(b)serious allegations regarding invalid deduction claims for a large number of clients, also of an ongoing nature, which with one exception is not explicitly denied or even confronted in the Applicants’ materials or submissions;
(c)highly offensive language directed at tax officials which, whatever the context, is unprofessional by any standard;
(d)no expression of remorse or other indication that the Applicants will in the future respect and observe their obligations as tax agents.
105.Against that background, I consider that the Applicants have not established an evidentiary foundation upon which I could be satisfied that they have a reasonably arguable case for having the terminations set aside altogether or the period during which they are prohibited from re-applying for registration reduced to such an extent it would be shorter than the time likely to be taken for the applications for review to be heard and decided. In particular, I am not satisfied that the Applicants have reasonable prospects of persuading the Tribunal that Mr Birdseye is a fit and proper person to be a tax agent, that termination is an excessive sanction in the circumstances or that the period of prohibition from re-applying is excessive or in any case could be reduced to a period that is shorter than that required for the substantive reviews to be completed. This consideration weighs heavily against the grant of the stays.
[footnote reference omitted]
There was a basis in the material before it upon which the Tribunal might reasonably have made each of the observations found in [104].
Having made this assessment, the Tribunal then adverted to the consequences for Mr Birdseye and the company, and others for that matter, of not granting the stay sought. The Tribunal also referred to the public interest and, for that matter, the consequences for the Board in carrying out its functions. As to the latter, the Tribunal stated:
109.I do not accept that granting stays would entirely impede the Board in carrying out its functions. The mere fact that it has terminated the registrations sends a strong message to the tax agent community. …
That, in my view, was an appropriate way with which to deal with the subject of consequences for the Board. Ordinarily, the Board, as a regulator, makes a decision and then if so disposed seeks to uphold that decision in the Tribunal. But it has no personal interest in an outcome before the Tribunal.
Sometimes, of course, where the Board has concluded that conduct which motivated it to cancel the registration was singularly egregious; it may seek to highlight this on the hearing of a stay application. If there were a particular concern in relation to the effect on the public or a section of the public, even in the short-term of a stay, then that, of course, would be appropriately highlighted on the hearing of a stay application. Otherwise the interests of the Board is only a decision on the merits according to law so far as a stay is concerned.
The Tribunal also addressed whether the applications for review, would be rendered nugatory if the stay were not granted. The Tribunal considered that it was self-evident that there would be a substantial and adverse effect on the applicants in dislocation of their business, consequential lost income and the like. The Tribunal also looked to the interests of the other persons affected, in particular clients and employees of the company.
Having looked to these particular subjects, the Tribunal then engaged in an exercise of “Weighing up these considerations”, at [119] – [121]:
119.I have carefully weighed up the considerations outlined above. Having regard to all of those considerations, I am not satisfied that it is desirable to grant the stays even on the conditions sought by the Applicants. In particular, the view I have formed that the material before me does not provide a foundation for concluding that the Applicants have reasonable prospects in the substantive reviews of having the terminations set aside – or at least the period of prohibition against re-applying for registration reduced to a period that would be shorter than that likely to be required for the Tribunal’s final decision on the substantive reviews to be made if the Applicants pursue the applications diligently – militates against granting the stays. That in turn is supported by the fact that on the material before me I could not have a reasonable level of confidence that the Applicants would comply with registration requirements during the period of any stays.
120.Further, the Applicants’ approach to the conditions upon which the interim stays were granted – recalling not just that the Applicants failed to comply with those conditions, but did not advise or approach the Tribunal for additional time in which to comply – I am not confident that conditions imposed on further stays would be complied with. That is so whether I consider the conditions sought in the Applicants’ submissions or extended conditions of the kind imposed by the Tribunal in Norman which Dr Gray in oral submissions also urged me to consider.
121.I have also carefully considered whether stays should be granted only until consideration of an application by the Applicants for determination of the procedural fairness issue as a preliminary point. This has the attraction that such stays would be for relatively short periods, thus reducing the risk to the community while avoiding the immediate disruption of clients and adverse consequences of the terminations for the Applicants and their staff. However, for the reasons already indicated I am not satisfied that such an application would have reasonable prospects of success and that the benefits to the Applicants and their staff and clients would outweigh the risks to clients and the community. Nor, for the reasons already indicated and on the basis of the material before me and the history of this matter, am I satisfied that the Applicants would comply with registration requirements or conditions upon which the stays might be granted in the period during which such stays might be operative.
[footnote reference omitted]
In the end, the Tribunal made an evaluative decision as to whether or not to form the requisite opinion. It is truly nothing to the point, and, in fairness, it must be observed that the case was not presented in this way, as to whether I now in the present exercise of judicial power, would form the same opinion because the present exercise of judicial power requires no such thing. The Court has to be astute not to venture into subjective factual evaluation, lest error of the kind detected in Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1 and Minister for Immigration and Border Protection v Eden (2016) 240 FCR 158 be permitted.
When all is said and done, whilst there was some additional material before the Tribunal as at the time the stay application was heard, when one moved beyond a regularisation of particular outstanding taxation lodgements, whether a personal, corporate or trust, and not payment in full, but rather, agreement with the Commissioner of Taxation as payment instalments in respect of taxation liabilities, all that was left was an assertion by Mr Birdseye that he intended to contest particular factual matters upon which the Board had chosen to act. That was in no way meaningful in relation to a stay pending a hearing. It may have had a role to play in relation to an urgent, interim stay, but it was incumbent upon Mr Birdseye if he were not to be left with what was before the Board and what little otherwise he had introduced, to give at least some colour and substance to how, and in what manner, he intended to contest particular factual propositions. This he did not do. That did not mean that there was no material upon which the Tribunal might have acted. It had the additional material I have described. It also had that which was before the Board. But it was not possible to see how, meaningfully, factual issues were to be put in context or contest.
The result then was that the Tribunal made an evaluation of what it did have before it. In the end, that failed to yield an opinion that it was desirable to grant a stay. The consequences - and they were plainly appreciated to be extremely adverse, were not ignored, they were weighed up. The Tribunal just was not able, for reasons which were expressed in a detailed and readily comprehensible way, to form the requisite opinion. I am unable to say that in so doing, the Tribunal misconstrued the statute.
Its reasons were coloured and shaped by the way in which the case was presented, which explains reference to Poidevin. But the Tribunal started with the correct test and appreciated that matters which were referred to in Poidevin and Scott were nothing more than subjects to which one might advert. And the Tribunal did advert to them, as the parties requested. The Tribunal may also, in my view, have been, in [46(b)], led into error but not with a consequence of which complaint is now made.
The nature of merits review must, doubtless, inform an assessment in the formation or otherwise of an opinion under s 41(2). But the Tribunal, in my view, did that in a way which does not admit of a conclusion of jurisdictional error on the ground of unreasonableness. It made an assessment as to prospects which it was entitled to make. It took other considerations of the kind I have mentioned into account and just made a decision thereon in good faith. There the matter must rest.
It follows from the foregoing that the application must be dismissed.
That conclusion is no reflection on Mr Shaw, who appeared for Mr Birdseye and the company. He truly said everything which might possibly be said in favour of the granting of relief on a jurisdictional error ground. Neither of the applicants should this otherwise. His submissions, and those made on behalf of the Board by Ms Walker, were truly of assistance and, without those, it would not readily have been possible to give, as was so desirable, in the interests particularly of the applicants, judgment today.
Costs must follow the event.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate:
Dated: 26 August 2020
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