Colin and Tax Practitioners Board - [2024] AATA 2151

Colin and Tax Practitioners Board [2024] AATA 2151 (28 June 2024)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2024/1283
Re: Philippe Colin
APPLICANT

AndTax Practitioners Board
RESPONDENT

DECISION
Tribunal:Senior Member Benk
Date:28 June 2024
Place:Sydney

The application for a stay is refused.
................[SGD].............................................
Senior Member Benk
CATCHWORDS
PRACTICE AND PROCEDURE – STAY APPLICATION – tax agents’ registration – false and misleading statements – underreported income – failure to lodge returns and business activity statements prospects of success – public interest – hardship – early hearing – dissolution of interim stay
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth), ss 2A, 40, 41(2), 41(3), 41(5), 42A(2)
Tax Agent Services Act 2009 (Cth), ss 2.5(1), 2.5(2), 3(1), 30-1, 30-10, 30-10(1), 30-10(2), 30-10(7), 30-10(11), 30-10(14)
CASES
Scott v Australian Securities and Investment Commission [2009] AATA 798
Australian Securities and Investments Commission v PTLZ [2008] FCAFC 164
Oaklands and Australian Securities and Investments Commission [2011] AATA 199
Poidevin and Australian Securities and Investments Commission [2018] AATA 124
Evans and Tax Practitioners Board [2019] AATA 1408
REASONS FOR DECISION
Senior Member Benk
28 June 2024
BACKGROUND

In a decision dated 25 January 2024, the Tax Practitioners Board (the Respondent) cancelled Mr Philippe Colin’s (the Applicant) registration as a taxation agent and imposed a four-year ban on the provision of services in that guise. This decision was made following an investigation in which the Respondent concluded the Applicant had engaged in:
(a)unauthorised amendments to the income tax returns (returns) of four clients and one former client;
(b)a failure to pay his taxation debts when they fell due;
(c)failed to correctly report amounts in his own returns and business activity statements;
(d)allowed his company to advertise that it can provide tax agent services when it is not a registered tax agent with the Respondent; and
(e)demonstrated an ongoing failure to comply with orders of the Tax Practitioners Board to complete and pass a course in ethics.
The Respondent maintained the above breaches (which to date have not been disputed with any vigour by the Applicant, (except to say that he has not engaged in fraud and that he has not done much wrong[1]) contravened the Tax Agents Services Act 2009 (Cth) (the Act). The Applicant was notified of the decision in writing and informed of his review rights.
[1] Request for Stay order dated 24 April 2024 completed by the Applicant.
Procedural history within the Tribunal
The Applicant then sought review of that decision by the Administrative Appeals Tribunal (the Tribunal) and requested a stay, to which the Respondent consented. This resulted in the initiation of a timetabled case management strategy.
The case history shows the Applicant has been given much guidance and direction about his obligations to the Tribunal. Case conferences were arranged along with Directions hearings with mixed degrees of participation by the Applicant. Accessibility was also catered for with the Applicant being offered both telephone and video platforms within which to present his case.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] AATA 2151
Decision Date: 28 June 2024

CaseChat Overview and Summary

This matter came before Senior Member Benk of the Administrative Appeals Tribunal concerning an application for a stay of proceedings. The applicant, Mr Colin, sought to prevent the Tax Practitioners Board (TPB) from enforcing its decision to deregister him, which would prevent him from practising as a tax agent. The TPB's decision was based on allegations that Mr Colin had breached five key areas of the Code of Conduct, including acting without honesty or integrity by amending client tax returns without authorisation, claiming unentitled deductions, and making false statements to the ATO and the Board.

The legal issues before the Tribunal were whether to grant a stay of the TPB's deregistration decision pending a final hearing. To determine this, the Tribunal was required to assess the applicant's prospects of success on the final review, the balance of convenience, and the public interest. The applicant bore the onus of satisfying the Tribunal that a stay should be granted.

In support of his application, Mr Colin submitted that his deregistration would cause severe financial hardship to his family, leading to the potential loss of their home and assets due to significant monthly mortgage and car repayments. He also argued that his deregistration would negatively impact the public interest, as he would be unable to lodge tax returns and Business Activity Statements, and would be prevented from paying off his own tax debts. Mr Colin contended that his alleged breaches were minor, did not involve fraud, and that he was taking steps to rectify his conduct, including undertaking further training.

The Tribunal considered the applicant's submissions regarding financial hardship and the public interest. While acknowledging the significant personal and financial impact of the deregistration, the Tribunal also noted the serious nature of the allegations concerning honesty and integrity in the applicant's professional conduct. The decision on whether to grant the stay would ultimately depend on a comprehensive assessment of these competing factors at the final hearing.

Orders

Orders of the court

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Background

Background to the litigation

It is necessary to highlight that the Applicant bears the onus of satisfying me that a stay should be granted.[12]BACKGROUND[12] Re Oaklands and Australian Securities and Investments Commission [2011] AATA 199 at [11]. The Respondent’s position and contentions The decision and its consequences have been outlined in paragraph 1 of these reasons. For the sake of abundant caution, I will again emphasise that the following summary is not an exhaustive chronology of the case, as that is not necessary at this stage. Further, and importantly, I will emphasise that I am not expressing a final view on the background or the facts that give rise to the matter, as that will be considered fully upon a final hearing. However, to properly consider whether a stay is to be granted, I must familiarise myself with the issues before the Tribunal to assess the likelihood of any success at a final review hearing. The Respondent alleges the Applicant has breached 5 key areas of the Code of Conduct contained in the Act. Ordinarily, I would not slavishly summarise nor extract the allegations but given the orders sought by the Applicant and my findings, feel it necessary to do so. Below is a summary of the allegations made by the Respondent: Allegation 1 The Applicant’s conduct fell well short of 30-10(1) of the Code, and that he failed to act with honesty or integrity because in the following transactions (unedited)[13] (I have substituted the names of the affected individuals to protect privacy):“a. amending the ITR for the period ending 30 June 2021 for (taxpayer 1), who had not been a client of Mr Colin’s for four years, without his knowledge or authorisation and claiming deductions which resulted in a refund of $XX from the ATO that Mr Colin kept and subsequently made false statements to the ATO and Board in relation to those amendments.b. Changing the financial institution account details for (taxpayer 1)to a bank account under Mr Colin’s own control, without first obtaining authority and consent from (taxpayer 1) to do so.c. amending the ITR for the period ending 30 June 2020 for (taxpayer 2),without his knowledge or consent and claiming deductions, and subsequently making false statements to the ATO and Board in relation to those amendments.d. amending the ITR for the period ending 30 June 2020 for (taxpayer 3), without his knowledge or consent and claiming deductions, and subsequently making false statements to the ATO and Board in relation to those amendments.e. amending the ITR for the period ending 30 June 2021 for (taxpayer 4), without his knowledge or consent and claiming deductions, and subsequently making false statements to the ATO and Board in relation to those amendments.f. lodging the ITR for the period ending 30 June 2021 for (taxpayer 5), withouthis consent or knowledge and claiming deductions, and subsequently making false statements to the ATO and Board in relation to this lodgement”.[13] Folio 47 of the T Documents The investigation into this conduct by the Board resulted in third party statements being obtained from the affected individuals which verified the interpretation of events by the Board. Allegation 2

Evidence

Evidence Before The Court

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Decision

Reasons for decision

In response to the above and in support of the stay of proceedings, the Applicant has submitted (unedited):At the end of this week I can longer trade due to my de registration by the TPB. It's extremely unfortunate but I doubt I have any other way of bringing in the income needed for our survival as a Family, if any income at all during my appeal. As I cannot work for another Accountant and it's the only occupation I have had for over 25 years. Andmy partner's (Michelle Turner) income solely relies on our company as she is the Office Manager. And Michelle hasn't had any other employment for over a decade as she was a homemaker, raising children and studying.We share a monthly mortgage repayment of $8100 a month. Monthly car repayment of $1295. Our Son Chayse attends a Private School to help with his significant learning difficulties. Plus all other living expenses. Unfortunately if I cannot trade we will lose our home and everything we have worked so hard to achieve as we started out with absolutely nothing within three to four months. My partner Michelle and our Son will have to move in with her Mother but I cannot stay because there's not enough room in her 2 bedroom/1 bathroom unit. And our pets, 2 Staffordshire Terriers and three cats will end up in the pound.We are all humbly begging for consideration and I apologise for the lateness of my request as we have been looking into other avenues of revenue. And have been waiting on responses from our broker to try and stretch out our loans but of course they require financial documentation that will show our employment status.I truly love my Family, my occupation and my business. I may have needed some extra support over six very stressful years however I'm going to employ another Accountant to help and make better choices for my Family as I don't want to lose them. Thank you again for your time and consideration.[15][15] Email/submission dated 13 March 2024I am struggling to make ends meet at the moment and de-registration of my license will cripple me financially. Please find attached my mortgage payment disclosure for the stay hearing. It is variable for $8148.74 per month and my car repayment of $1293 per month. I also have a lot of other expenses.[16][16] Email/submissions dated 20 March 2024I just want to say I have committed no fraud in my life and think is unfair I be deregistered for having a tax debt and lodging 6 tax returns out of 1200 without signatures.I am really hoping that your office can overrule this decision based on the fact that I have done nothing majorly wrong.I applied taxation rules in my tax ration my opinion and was hit with a $300k tax debt of which I have Mostly paid.I am on a small monthly repayment as we have pay my mortgage but I will pay the debt if I can trade in July.I am writing this email in good faith.[17]I need to stay (sic) as I have a close knit family and pets (2 dogs and a 3 cats) and we have a mortgage and will lose everything should we not trade (especially in July and August). I am also paying my car off so I need to stay. I have other expenses like insurances and food and will not be able to pay for those items in I don’t trade (sic)It is in the public interest I stay as I will be lodging BAS and clients will be paying GST and also lodging tax returns and clients will be paying taxes. It is also of note that I have a tax bill with my personal and company affairs and I will need to trade to pay those debts off. This is in the public interest that I pay my tax bills. I will not be able to it if become deregistered and I will have no income.Please note that it has been a very rough few months for me and the deregistration form the TPB have had a huge impact on me emotionally. Who wants to lose their successful business?I will reinterate that I have not done much wrong, ie lodge 6 clients (out of 1200) without signature, and did not pass a course (which I am now doing). I have never committed fraud during my 26 year career (which is generally why Agents get de-registered).I would like the Commissioner to know that I will do everything right and comply with the TASA Act and am remorseful for some of the things that I have done to get me deregistered. I apologise profusely for the minor things that I have done and will rectify my actions should I stay.[18] [17] Email/submission dated 28 March 2024[18] Email/submissions dated 10 April 2024SHOULD THE DECISION BE STAYED?

Ratio Decidendi

Legal Principle Established

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