Cross and Tax Practitioners Board (Taxation) - [2020] AATA 1471

Cross and Tax Practitioners Board (Taxation) [2020] AATA 1471 (18 May 2020)
Division:GENERAL DIVISION
File Number(s): 2020/2356, 2020/2357
Re:Ashley Cross
FIRST APPLICANT
M Adamson & A Cross
SECOND APPLICANT

AndTax Practitioners Board
RESPONDENT

DECISION
Tribunal:Deputy President Boyle
Date:18 May 2020
Place:Perth

The Applicants’ requests for stays of the operation or implementation of the Decisions are refused.
................................[sgd]....................................
Deputy President Boyle
CATCHWORDS
PRACTICE AND PROCEDURE – interlocutory application – application for stay of decision – prospects of success – consequences of refusing stay – public interest – whether the applications for review would be rendered nugatory if stays not granted – requests for stay refused
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) – ss 41, 41(2)
Tax Agent Services Act 2009 (Cth) – ss 20-5, 20-15, 20-5(1)(a), 20-5(1)(a)(ii), 30-10, 30-10(7), 30-15, 30-10(1), 30-10(14), 40-5(1)(a), 40-5(1)(b), 40-10(1)(a), 40-25, 40-25(1), 41(2), Subdivision 60-E
Partnership Act 1895 (WA) – ss 45
CASES
Birdseye and Tax Practitioners Board [2020] AATA 1250
Burnett and Tax Practitioners Board [2014] AATA 87
Carter and Australian Securities and Investments Commission [2020] AATA 809
Dart and Director-General of Social Services (1982) 4 ALD 553
Dekanic v Tax Agents' Board of New South Wales (1982) 62 FLR 154
Gould and Tax Practitioners Board [2019] AATA 1056
Hopfner and Tax Practitioners Board [2019] AATA 851
Menzies Institute of Technology and Australian Skills Quality Authority [2019] AATA 343
Norman and Tax Practitioners Board [2020] AATA 640
Poidevin and Australian Securities and Investments Commission [2018] AATA 124
Scott and Australian Securities and Investments Commission [2009] AATA 798
Stasos v Tax Agents’ Board of New South Wales [1990] FCA 379
Stirling Skills Training (Inc) and Australian Skills Quality Authority [2019] AATA 1721
Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047
Van Dieren and Australian Securities and Investments Commission [2019] AATA 4777
REASONS FOR DECISION
Deputy President Boyle
18 May 2020
THE APPLICATIONS

On 2 April 2020, the Respondent (Board) made the following decisions:
(a)
to terminate the First Applicant’s tax agent registration pursuant to paragraph

40-5(1)(b) of the Tax Agent Services Act 2009 (the TASA);
(b)to determine that the First Applicant may not apply for registration for a period of two years from the date the termination of his tax agent registration takes effect, pursuant to subsection 40-25(1) of the TASA; and
(c)to terminate the Second Applicant’s tax agent registration pursuant to subsection 40- 10(1)(a) of the TASA.
(collectively referred to as the Decisions)
Applications for review of the above decisions were lodged with the Tribunal on
23 April 2020.
On 23 April 2020 requests were made by the Applicants for stays under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) of the operation or implementation of the Decisions. It is those requests for stays that are the subject of these reasons for decision.
The Applicants’ requests for stays of the operation or implementation of the Decisions were heard on 14 May 2020. Due to COVID-19 restrictions, the hearing was conducted by telephone. The Applicants were represented by Mr R Sceales of Sceales Lawyers and the Board was represented by Mr MGS Crowley of the independent bar. Written submissions were provided by both parties.
THE DECISIONS
The bases of the Decisions were:
First Applicant
The Board was not satisfied that the First Applicant met the tax practitioner registration requirement under s 20-5(1)(a) of the TASA that he be a fit and proper person because of breaches of subsections 30-10(1) and 30-10(7) of the Code of Professional Conduct in the TASA (the Code).
Second Applicant
The Board was not satisfied that the Second Applicant met the tax practitioner registration requirement under s 20-5(2)(a)(ii) of the TASA that each individual partner is a fit and proper person because the Board was not satisfied that the First Applicant was a fit and proper person.
BACKGROUND
On 1 March 2010 the First Applicant was registered as an individual tax agent with registration number 0607006.[1]
[1] T3/21.
On 18 July 1991, the Second Applicant was registered as a partnership tax agent with registration number 53383007.[2] The Second Applicant has two partners being the First Applicant and Ms Margaret Adamson. Ms Adamson is also a registered tax agent.
[2] T3/24.
On 25 September 2019 the Board received a referral from the Australian Taxation Office (ATO) acting on behalf of the Commissioner of Taxation (the Commissioner) concerning the conduct of the First Applicant. The ATO alleged that:[3]
(i)The First Applicant had lodged 19 self-managed super fund annual returns (SAR) on behalf of the Second Applicant listing the auditor as Ms Gardner of audit firm Butler Settineri when she had not completed an audit;
(ii)The First Applicant had admitted the he had lodged SARs prior to audit;
(iii)The issue of lodging unaudited SARs may not be limited to the 2017 financial year
[3] Taken from T3/25 in application 2020/2356 and T3/29 in application 2020/2357.
According to the Board, further enquiries by the Board of Ms Gardner identified that:
(i)At least 125 SARs were lodged prior to audit;
(ii)Eight funds had not been audited for 10 years or more.
On 19 December 2019 the Board commenced an investigation under Subdivision 60-E of the TASA into the conduct of the First Applicant.
By letters dated 17 March 2020[4] notices were provided to each of the Applicants setting out the allegations that had been made and advising that the conduct described in the allegations may be a breach of TASA. In each case the letter attached details of the allegations made against the Applicant and the evidence upon which the allegations were based. In the case of the First Applicant the attachments to the letter totalled 883 pages[5] and, in the case of the Second Applicant, that attachments to the letter totalled 884 pages.[6]
[4] T3 in the s 37 Documents in both applications.
[5] T3/19-902.
[6] T3/22-906.
The letters advised that the relevant Applicant was to provide a written response pursuant to s 30-10(14) of TASA as to whether the Applicant admitted the allegations or if they contested the allegations and, if they did, the reasons for contesting the allegations.

The letter further advised that as the outcome of the Board’s investigation may affect the relevant Applicant’s registration they may wish to seek legal advice.
By responses dated 31 March 2020[7] each of the Applicants responded to the Board’s letters of 17 March 2020. The same letter, signed by the First Applicant, was sent by both Applicants. This is not surprising given that the allegations against the Second Applicant relate to the conduct of the First Applicant as a partner of the Second Applicant.
[7] T4 in each application bundle.
In his letter of 31 March 2020, the First Applicant contested the allegations:[8]
(i)that he had not acted competently;
(ii)that he had not acted honestly and with integrity; and
(iii)that he is not a fit and proper person
[8] T4/903.
In so doing the Fist Applicant contended[9] that the auditors had by then completed the audit of 76 of the 125 SARs and had confirmed ‘in every instance that the financial statements and income tax returns lodged were true and correct and that the SMSF’s [sic] had complied with all of the SIS regulations applying to SMSF’s [sic]’. He contended that because of this ‘he had not undermined the integrity of the taxation system’.
[9] T4/903.
At page 5 of his letter the First Applicant states:[10]
In summary, the fact that the auditors have confirmed income tax returns of the funds are correct and the funds have complied with all SIS Legislation confirms

I am competent.
[10] T4/907.
The letter repeatedly emphasised that the audits, once carried out, confirmed the correctness of the financial statements that had been included in the SARs. The letter also sought to explain, by reference to previous letters sent to the Board in November 2019,[11] December 2019[12] and January 2020,[13] why the audits of the SMSFs had been delayed.
[11] T3/782.
[12] T3/789.
[13] T3/793.

The First Applicant answers the allegation that he is not fit and proper as follows:[14]
[14] T4/908-909.
It is alleged that I may not be a fit and proper person, particularly as my response to the Board was that the only issue was the incorrect date on the return.
I do understand it is significant to have had the incorrect date on the returns and have advised that it will not occur again and have taken a significant step in 2019 to change auditors which has already made a huge difference in reducing the time to have audits completed and consequently resolve a significant problem I had.
In respect of the comment that I misled clients to believe audits had been completed, I totally reject this and refer to my earlier comments. In respect of my concerns for clients, I have always put absolute priority on ensuring their income tax returns and associated tax liability are calculated correctly and in accordance with the taxation laws. I have also placed heavy emphasis with clients on the conduct of their funds to ensure they comply with all of the requirements of the SIS Act.
…
The Australian Taxation Office in their referral to the Board confirms their main concern is that if not audited, the SMSF may have committed fraud or significant contraventions of the taxation or superannuation legislation.
The independent auditors on all of the audits completed to date have confirmed every fund in every year has complied with all taxation and superannuation legislation.
There has been no problem with the conduct of the funds.
I believe this confirms I have maintained the integrity of the taxation system as all income tax returns lodged have been verifies by the auditors to be true and correct for all audits they have completed.
As noted above, by letters dated 14 April 2020[15] the Board advised that it had decided that the First Applicant no longer met the requirement for registration under s 20-5(1)(a) of the TASA that he be a fit and proper person. As a result, the registration of the

Fist Applicant was terminated under s 40-5(1)(b) of the TASA and the registration of the Second Applicant was terminated under s 40-10(1)(a) of the TASA. Under the terms of the relevant Decisions of the Board, both terminations are to take effect from 19 May 2020.

In addition, the Board decided, pursuant to s 40-25 of the TASA, that the First Applicant may not apply for registration for a period of two years from the effective date of the termination.
[15] T7.
THE LEGISLAITON
Section 2-5 of TASA provides:
Object
The object of this Act is to ensure that *tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct. This is to be achieved by (among other things):
(a)   establishing a national Board to register tax agents, BAS agents and tax (financial) advisers; and
(b)   introducing a *Code of Professional Conduct for *registered tax agents, BAS agents and tax (financial) advisers; and
(c)   providing for sanctions to discipline registered tax agents, BAS agents and tax (financial) advisers.
Subdivision 60-E of the TASA empowers the Board to commence an investigation into, amongst other things, any conduct that may breach the TASA.
Section 60-125(2) of TASA relevantly provides:
If the Board investigates conduct under section 60-95 and finds that the conduct breaches this Act, the Board must either:
(a)   make a decision that no further action will be taken; or
(b)   do one or more of the following:
(i)    impose one or more sanctions under Subdivision 30-B;
(ii)   terminate an entity's registration under Subdivision 40-A;
(iii) apply to the *Federal Court for an order for payment of a pecuniary penalty under Subdivision 50-C;
(iv) ...
Section 20-5 of TASA relevantly provides:
Eligibility for registration as registered tax agent, BAS agent or tax (financial) adviser
Individuals
(1)An individual, aged 18 years or more, is eligible for registration as a *registered tax agent, BAS agent or tax (financial) adviser if the Board is satisfied that:
(a)   the individual is a fit and proper person; and
(b)   …
…
(2)A partnership is eligible for registration as a *registered tax agent, BAS agent or tax (financial) adviser if the Board is satisfied that:
(a)   each partner who is an individual is:
(i)    aged 18 years or more; and
(ii)   a fit and proper person; and
(iii) …
Section 20-15 of TASA sets out the criteria for determining whether a person is a fit and proper person and, relevantly provides:
In deciding whether it is satisfied that an individual is a fit and proper person, the Board must have regard to:
(a) whether the individual is of good fame, integrity and character
(b) …
Section 40-5(1)(b) of TASA provides:
Termination of registration--individuals
(1)If you are a * registered tax agent, BAS agent or tax (financial) adviser and an individual, the Board may terminate your registration if:
(a)   an event affecting your continued registration, as described in section 20-45, occurs; or
(b)   you cease to meet one of the * tax practitioner registration requirements; or
(c)   …
Section 40-10(1)(a) of TASA relevantly provides:
Termination of registration--partnerships
(1)If you are a *registered tax agent, BAS agent or tax (financial) adviser and a partnership, the Board may terminate your registration if:
(a) you cease to meet one of the * tax practitioner registration requirements; or
(b) …
Part 3 of TASA contains the code which applies to all registered tax agents. Section 30-10 relevantly provides:
The Code of Professional Conduct
Honesty and integrity
(1)You must act honestly and with integrity.
…
Competence
(7)You must ensure that a *tax agent service that you provide, or that is provided on your behalf, is provided competently.
Section 30-15 of TASA provides:
Sanctions for failure to comply with the Code of Professional Conduct
(1)This Subdivision applies if the Board is satisfied, after conducting an investigation under Subdivision 60-E, that you have failed to comply with the *Code of Professional Conduct.
(2)The Board may do one or more of the following:
(a)   give you a written caution;
(b)   give you an order under section 30-20;
(c)   suspend your registration under section 30- 25;
(d)   terminate your registration under section 30-30.
Section 40-25(1) of TASA provides:
(1)If the Board terminates your registration, the Board may also determine a period, of not more than 5 years, during which you may not apply for registration.
Section 41 of the AAT Act provides:
(1)Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.
(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
CONSIDERATION
It is generally accepted that the relevant considerations for the grant of a stay are those identified by President Downes J in Scott and Australian Securities and Investments Commission[16] (Scott). As I noted in Stirling Skills Training (Inc) and Australian Skills Quality Authority[17] at [35]-[36] and in Construction Industry Training Australia Pty Ltd and Australian Skills Quality Authority[18] at [35], a useful restatement of those considerations appears in Member Parker’s decision in Menzies Institute of Technology and Australian Skills Quality Authority[19] (Menzies) (at [16]):
16.President Downes J, in Re Scott and Australian Securities and Investments Commission [2009] AATA 798 (Re Scott) set out a number of factors to be considered in determining whether to grant a stay under subsection 41(2) of the AAT Act, as follows:
1. The prospects of success;
2. The consequence for the applicant of the refusal of the stay;
3. The public interest;
4. The consequences for the respondent in carrying out its functions, depending on whether a stay is granted or not;
5. Whether the application for review would be rendered nugatory if a stay were not granted;...
[16] [2009] AATA 798.
[17] [2019] AATA 1721.
[18] [2019] AATA 2219.
[19] [2019] AATA 343.
The parties’ respective submissions largely address the considerations identified in Scott.
[20] [2020] AATA 640.
[21] (1982) 62 FLR 154.
Both parties cited numerous cases dealing with requests for stays under s 41(2) of the AAT Act. The Applicants referred to Deputy President McDermott’s decision in

Norman and Tax Practitioners Board[20] (Norman), in which, on the Applicants’ submission (Applicants’ submissions para. 4.1.6), the Deputy President reaffirmed the continuing status of Dekanic v Tax Agents' Board of New South Wale[21] (Dekanic), in particular the statement in Dekanic ‘that it is the ordinary practice of the Tribunal in the review of a cancellation of a tax agent's registration to grant a stay until the hearing and the determination of the review’.
The Applicants submit (para. 4.1.8) that ‘it is the ordinary practice of the Tribunal in the review of a cancellation of a tax agent's registration to grant a stay until the hearing and the determination of the review’. That submission follows immediately on from the Applicants referring (para. 4.1.7) to Gould and Tax Practitioners Board[22] (Gould) and Hopfner and Tax Practitioners Board[23] (Hopfner). I note that in both Gould and Hopfner the Tribunals did not grant a stay.
[22] [2019] AATA 1056.
[23] [2019] AATA 851.
As the Applicants note, Deputy President McDermott in Norman at [17] commented that Dekanic had been applied in recent decisions of the Tribunal. In making that comment, however, Deputy President McDermott was not saying that the proposition in Dekanic which the Applicants rely on, namely, that it is the ordinary practice to grant a stay, had been applied in recent decisions. What Deputy President McDermott said was:
However, Downes J in Re Scott certainly did not regard the decision in Dekanic as no longer being relevant and this Tribunal has in recent decisions applied the considerations which are outlined in Dekanic (footnote)
(Emphasis added.)
The footnote to that statement refers to Hopfner and Gould. As noted above, in both of those cases a stay was not granted. Further, the only reference in Hopfner to Dekanic was in a footnote comparing Dekanic to another decision of the Tribunal, Burnett and Tax Practitioners Board[24] (Burnett), in the way in which those two cases considered the effect on the livelihood of an applicant that granting, or not granting, a stay would have (Hopfner at [17]). The full text of the relevant footnote was:
Compare Re Dekanic and Tax Agents Board of NSW (1982) 6 ALD, page 242; and Burnett and Tax Practitioners Board [2014] AATA 87 [43]
[24] [2014] AATA 87.
Similarly, the only reference in Gould (at [33]) to Dekanic, again in a footnote, was as a comparison to Burnett on the consideration of the effect of the livelihood of the applicant that granting a stay or not granting a stay would have. The reference in Gould at [33] is:
I accept there will be inconvenience and unspecified expenses incurred if a stay is not granted. But it is not contended that the Applicant’s livelihood will suffer as in some cases (footnote).

The relevant footnote in Gould was exactly the same as that in Hopfner as reproduced at [35] above.
Accordingly, while Deputy President McDermott referred to Dekanic, it was not for the purpose of applying, or even commenting on, the statement in Dekanic that ‘it is the ordinary practice of the Tribunal in the review of a cancellation of a tax agent's registration to grant a stay until the hearing and the determination of the review’.
What Deputy President McDermott was saying in Norman, quite correctly, was that,

in deciding whether or not to grant a stay, recent Tribunal decisions had applied the considerations taken into account by the Tribunal in Dekanic, in particular the effect on the livelihood of an applicant that granting, or not granting, a stay would have. That same consideration is one identified in Scott and one which is obviously relevant and invariably considered by tribunals and courts in determining whether a stay should be granted.
The statement made by President Davies J in the oral ex-tempore reasons in Dekanic cited at [32] above must also be seen in the context of the legislation and the administrative process that was being considered in Dekanic. As President Davies J sets out at 156:
…It follows that a review by this Tribunal completes the process by which a valid decision for the cancellation of a tax agent's registration may be made. By the provision of the right to be heard before this Tribunal, the tax agent, whether he takes advantage of the opportunity of review or not, is given the opportunity to put his case and therefore the rules of natural justice are complied with.
Thus, I am not now dealing with a case in which I am reviewing a decision in relation to which, prior to the making of the decision, the applicant was given a full opportunity to put forward whatever matters he wished to put against the making of the decision the subject of the review. I am dealing with a matter involving the cancellation of a tax agent's licence in the circumstance that the applicant has not yet been heard and has not yet had an opportunity fully to put forward the facts and reasons why his registration should not be cancelled.
(Emphasis added.)
That, of course, is not the case in the present applications. The Applicants were, prior to coming to the Tribunal, afforded extensive opportunity to put their cases and in fact did so (see [10]-[17] above).
It is, accordingly, understandable that at the time of and in the factual and statutory context in which the Tribunal was operating in Dekanic that a stay was appropriate, and would generally be appropriate in such cases, to allow compliance with the rules of natural justice.
I do not accept the Applicants’ contention that ‘it is the ordinary practice of the Tribunal in the review of a cancellation of a tax agent's registration to grant a stay until the hearing and the determination of the review’. That statement is not borne out by a review of the recent cases on point. Even if we look at the cases that the parties have referred to in their submissions, in the majority of those cases a stay was not granted.
As noted above, the recent practice of the Tribunal, at least since the Scott case,

has been to apply the considerations identified in that case (see [30] above). It is not the case, as suggested by the Applicants, that there is any pre-disposition to the granting of a stay, either in cases involving the termination of tax agents registration or more generally.

The cases identified by the Applicants, Gould and Hopfner, are prime examples of that approach.
Prospects of success
The Applicants admit[25] that ‘the lodgement of the superannuation fund income tax returns under certificate that these had been audited prior to lodgement was false’. It would clearly be pointless to deny that fact. The Applicants have therefore admitted that the First Applicant made false declarations in the relevant SARs. It also seems not to be disputed, although it is not directly admitted by the Applicants, that the First Applicant made the false declaration as to the SMSFs being audited on 125 occasions.
[25] Para. 6.1 of submissions.
Obviously a tax agent making a false declaration is a serious breach of the Code.

What then is the basis of the Applicants’ cases in the respective applications? It seems that the Applicants’ argument is that the penalty imposed, that is the termination of the First Applicant’s registration, with the consequence that the Second Applicant’s registration was terminated, was too harsh and, presumably, that the determination that the First Applicant may not apply for registration for a period of two years was also too harsh. Presumably, because the Applicants are seeking a stay of implementation or operation of the decision to terminate their registrations, the relevant decisions are those relating to termination of registration rather than the determination that the Fist Applicant may not apply for registration for two years.
The reasons stated by the Applicants in their respective applications to the Tribunal for review were:
1.The decision of the Tax Practitioners Board on 2 April 2020, notified by letter dated 14 April 2020, to terminate the Applicant’s registration as a tax agent under s 40-5(1)(b) of the TASA is wrong, constitutes a ruinous imposition on the Applicant, on his business partner and on employees of the partnership Adamson Cross, and should be set aside by reason of the following matters:
1.1.The lodgement of income tax returns prior to completion of annual audit occurred in a miniscule number of cases, representing less than between 1.2% and 3.1% of the total number of returns lodged annually by the partnership;
1.2.Such income tax returns were lodged in that way, because if they had not been lodged before due date the Funds would be treated as non-complying from 2018 onwards, so forfeiting their status as complying superannuation funds, with calamitous outcomes for members and trustees of such Funds, and in prior years would have attracted liabilities to penalties to the financial detriment of such Funds;
1.3.None of the income tax returns so lodged required adjustment or amendment, and tax as returned and assessed was paid by due date;
1.4.An ongoing delay in obtaining audit reports (since resolved by appointing other auditors) necessitated lodgement of the income tax returns prior to completion of audit;
1.5.The Applicant acknowledges and has always acknowledged that lodging that small group of income tax returns prior to completion of audit was contrary to the law, and has expressed his remorse for so doing;
1.6.In so doing the Applicant has appointed other auditors and altered office systems to prevent a possible recurrence of the circumstances which led to this occurring;
The Applicants then set out various matters that they say the Board failed to take into account in making the decisions including:
(a)the loss of employment of staff;
(b)personal loss of income by the First Applicant who has no training other than as an accountant;
(c)inability of the first Applicant, who is 64, to obtain employment, particularly in the time of COVID -19;
(d)inability of First Applicant to sell his interest in the business;
(e)the termination of the partnership comprising the Second Applicant with consequential financial repercussions; and
(f)the Board failing to take into account the First Applicant’s acceptance of what he had done as being wrong.
A number of the matters raised by the Applicants are in effect, or are at least expressed to be, complaints about the process undertaken by the Board or how the Decisions were in error. Such complaints are not relevant to the task that the Tribunal undertakes on review. As I stated in Carter and Australian Securities and Investments Commission,[26] having gone through relevant authorities ([48]-[50]):
51.The above authorities make it clear that the role of the Tribunal is to do over again that which the original decision maker did and, on the evidence before the Tribunal at the time that it makes its decision, exercising the same discretions that the original decision maker had, make what it considers to be the correct or preferable decision. That is not, as asserted by the Applicant, an exercise in considering what errors the delegate made. It will be an exercise in considering the evidence that was presented to the delegate, and any further evidence put to the Tribunal by the parties, and forming its own view as to what the correct or preferable decision is.
[26] [2020] AATA 809.
Accordingly, statements as to errors made by the Board or the Applicants’ treatment by the Board are not relevant to the merit of the substantive applications for review.

However, insofar as those ‘complaints’ made by the Applicants identify relevant considerations or information that would be relevant to the Tribunal making its own decision ‘as to what the correct or preferable decision’ is under the relevant provisions of the TASA, then I take them into account in considering the merit of the Applicants’ applications.
As to the prospects of success, the Board submits:
(a)The conduct which actuated the Decisions was the First Applicant’s 125 false declarations, over a span of almost nine years, made to a public official, from a position of trust.
(b)
In addition to this, the Second Applicant has previously been sanctioned under the TASA because of the First Applicant’s conduct. A written caution was issued on

17 February 2016 under paragraph 30-15(2) for failing to comply with subsection 30-10(7) of the Code (services not competently provided).
(c)The First Applicant failed to lodge on time the tax returns of the Total Life Superannuation Fund for five consecutive years, and failed to respond to the complainant’s queries, and failed to forward correspondence from the ATO to the client.
(d)
This caution should have served as a wake-up call for the First Applicant to ensure that he provided tax agent services in a competent and diligent manner.

Despite this prior intervention by the Board, the First Applicant continued to cause serious breaches of the Code, subject of the current matters.
(e)The reasons put forward by the Applicants as to why the Board’s decisions are wrong have the flavour of self-justification. Little comfort can be drawn from this that some sanction other than termination will adequately protect and vindicate the public, the Second Applicant’s clients, and ensuring that dishonesty is not permitted to corrode the proper functioning of the revenue authorities.
(f)The Tax Commissioner must have confidence that tax agents will act with honesty and integrity. In Stasos v Tax Agents’ Board of New South Wales,[27] Hill J stated at [50]:
In addition to the tax agent dealing with his client, he will, almost invariably have dealings with officers of the Australian Taxation Office and perhaps the boards or tribunals to which I have referred. Those dealings must be able to be carried on in an atmosphere of mutual trust. The commissioner and his officers must be able to accept that, to the best of the ability of the tax agent, returns have been prepared which are true and accurate. This is particularly so now that the commissioner has proceeded to a system of self-assessment, with inaccuracies only coming to light in case of random audit or, presumably other information coming to the hands of the commissioner.
(g)Reasons such as the false lodgements representing a small proportion of all lodgements made by the Second Applicant, that penalties would be imposed for late lodgements, and that none of the returns required amendments after the audits were actually completed do not mitigate the seriousness of intentionally making false representations to the Commissioner.
(h)Whether there were delays in obtaining audit reports from Ms Gardner is not supported by evidence and contrary to responses Ms Gardner gave to the Board during the investigation.
(i)In the circumstances, the Applicants have weak prospects of success. Noting that the maximum banning period that can be imposed under the TASA is five years, the termination of the First Applicant’s tax agent registration and the two-year non-application period is appropriate given the seriousness of the breaches found by the Respondent, particularly those relating to the First Applicant’s dishonesty.
[27] [1990] FCA 379.
What then is the process, for the present purposes of considering whether a stay should be granted, that I am to undertake to determine the prospects of the Applicants being successful? The approach to be taken was summarised by Deputy President Redfern in Poidevin and Australian Securities and Investments Commission[28] (Poidevin) at [39]-[40]:
39....Clearly, it is not the role of the Tribunal in an interlocutory application of this nature to conduct a review of the merits or strength of the arguments, even on a preliminary basis, because such an undertaking would not only be lengthy but it would be unlikely to take into account the possibility of further evidence and submissions that may be more appropriately advanced at the substantive hearing...
40.The Tribunal is, however, at least obliged to determine whether there are facts or circumstances or points of law that may be argued at a substantive hearing which may lead to a different result (see Zarfati v Australian and Securities Investments Commission [2008] AATA 989; (2008) 106 ALD 225). The Tribunal is not bound by the findings of the delegate but the decision nonetheless provides a sound basis for this assessment, particularly, as in this case, where the decision is detailed and discloses the evidence relied on, the findings of fact made and the reasoning process that led to the conclusions reached by the delegate. If the reviewable decision discloses findings and reasoning that an applicant cannot or does not challenge,

this would be critical to the issue of prospects and would be a significant factor that would weigh against the granting of a stay. It is incumbent on the applicant for a stay to establish the existence of such facts and circumstances or the possibility of legal error that may lead to a different result, through new evidence or submissions that were not raised before the delegate or by contesting findings of fact or conclusions of law (or a combination of both) that are open to challenge.
[28] [2018] AATA 124.
In Van Dieren and Australian Securities and Investments Commission[29] (Van Dieren) at [28]-[31] I summarised the law as to the level of possible or likely success in the substantive application that an applicant would need to establish for the purposes of this consideration in a stay application. I refer in that case (at [28]) to Senior Member Cameron’s statement of the required level of satisfaction in Technical Education Australia Pty Ltd and Australian Skills Quality Authority[30] and (at [30]) to President Davies J’s finding in Dart and Director-General of Social Services[31] at 555.
[29] [2019] AATA 4777.
[30] [2018] AATA 3047.
[31] (1982) 4 ALD 553.
At [38] of Van Dieren, pulling the various tests laid out in the cases to which I referred,

I concluded that:
…The prospects of success have, in my view, reached the level described by Senior Member Cameron in Technical Education Australia; “whether there exists facts and circumstances which would provide some basis for success”, and the level identified by Deputy President Redfern in Poidevin (see [22(e)] above) that “there are facts or circumstances or points of law that may be argued at a substantive hearing which may lead to a different result”.
In the present case, while the stay is sought in respect of all of the Decisions,

the imperative as far as the Applicants are concerned, is to stay the operation of the suspension of registration decisions. That being the case, the relevant question is whether there exist facts and circumstances, if accepted, which would provide some prospect of a result other than a suspension decision. The First Applicant has on 125 occasions,

over a number of years, made false statements knowing them to be false. Irrespective of the commercial reasons for him making that choice, while it is not impossible, on the basis of the material presently before me, it is unlikely that anything other than a suspension of registration would be appropriate.
Accordingly, I find myself in the same position as Senior Member R J Olding did in Birdseye and Tax Practitioners Board[32] at [105], namely:
105.…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…
[32] [2020] AATA 1250.
This consideration therefore weighs against the grant of stays.
Consequence for the Applicants of refusing the stays
The consequences to the Applicants if the termination decisions are not stayed,

and presumably on the substantive hearing, set aside, are set out in their submissions and in the substantive applications (see [47] above). The Applicants’ submissions also claim that 350 clients will have to obtain new representation and that Ms Adamson will suffer a substantial loss of income for the next six or seven years of her working life and a loss of the value to her of her goodwill in the Second Applicant with her share being estimated to be worth $500,000.
The Applicants also contend that the termination of the partnership, which the Applicants say will, by operation of s 45 of the Partnership Act1895 (WA), be the automatic and unavoidable consequence of the registrations being terminated, will give rise to significant personal tax liabilities on the part of the First Applicant and Ms Adamson. Termination of the partnership comprising the Second Applicant would also, obviously, have terminal consequences for the Second Applicant. For present purposes only, I am prepared to accept that would be the case.
There was discussion at the hearing of the possibility of Ms Adamson taking over the clients of the Second Applicant, a partnership of which she is a partner. Mr Sceales agreed that while various steps would have to be put into place, including the clients agreeing to that move, there was legally no reason why that could not happen.
The Board submits that the financial and other consequences identified by the Applicants as flowing from a refusal of stays will only occur, or have the dire consequences described by the Applicants, if the Applicants, in particular the Second Applicant, have done nothing in anticipation of a refusal of stay. The business is simply an asset of the Second Applicant. Presumably, the clients of the business are not exclusively contracted to the Second Applicant.
The Board in its submissions concedes that:
43.…if the stay were refused the business will immediately cease as operated by the Partnership [Second Applicant] and that in such a case weighs in favour of a stay. But it does not follow that the business must cease, that the employees will all be terminated, nor that Mr Cross will be financially ‘ruined.’
however, submits:
44.The Applicants have been on notice in writing since at least 17 March 2020 that the outcome of the investigation could result in the termination of their registrations. By a ‘Notice to the Practitioner of possible outcomes’ annexed to the Respondent’s letter of 17 March 2020, it was explained that the Respondent must either do nothing or impose a caution, impose a supervision requirement, suspend registration, or terminate registration. Morevoer, the conduct began almost a decade ago. Mr Cross must have known that the possible consequence of that conduct many years previously might come to light and result in termination.

There is some merit to the Board’s submission. It does appear that the Applicants have been proceeding with business on the assumption that there will be stays and, presumably that the terminating decisions will be set aside. That, I think, may have been an overly optomistic assumption.
I accept that not granting stays will have very significant financial impacts on both Applicants, Ms Adamson, the employees of the business and the clients of the business. As was noted by Senior Member R J Olding in Birdseye at [107]:
107.These are, of course, inevitable consequences of the terminations, especially since the Applicants are prohibited from re-applying for registration for the maximum period of five years. However, persons who enjoy the benefits of regulated occupations but fail to observe the requirements of registration do so at their peril. Nevertheless, these factors weigh to some extent in favour of granting the stays.
The same consideration applies in the present case. On balance, this factor weighs in favour of granting the stays sought.
Public interest
The Board submits that (footnotes omitted):
47.The Respondent is a statutory body tasked with administering the TASA.

The purpose of the TASA is to ensure that tax agent services are provided

‘in accordance with appropriate standards of professional and ethical conduct’. The public interest in refusing this application is underpinned by the importance of maintaining appropriate standards of professional and ethical conduct within the tax profession.
48. The preservation of the general community’s confidence in tax agents is of fundamental concern. In Evans and Tax Practitioners Board, Senior Member Furnell held that the standing of the profession in the eyes of the public is a public interest risk to be considered.
49. The Applicants’ breaches of the TASA are a serious breach of the standards of professional and ethical conduct expected of those within the tax profession. Mr Cross’ conduct endured for almost a decade. Making false representations to the Commissioner on behalf of clients is a very serious breach of the Code, and represents a significant consumer protection risk.

A stay might tend to diminish the Respondent’s ability to fulfil its duty to maintain appropriate standards of professional and ethical conduct within the tax profession.
50. Furthermore, the number and frequency of the false declarations over almost a decade cannot give the Tribunal much comfort that there would be compliance in the future. It is also noted that the imposition of a previous written caution for breaching the same item of the Code has not been effective. The multiple breaches of ethical and professional obligations suggest a tangible and real risk to consumers of tax agent services.

The Applicants’ conduct demonstrates that they fall short of the professional standard of behaviour set by the TASA and expected from the public.
The Applicants’ submission is:
6.7.It is submitted that insofar as public interest is concerned, the correct amount of income tax has been returned, assessed and paid by each of the Funds in question. Subsequent audit of the superannuation Funds has confirmed that the correct amount of income tax has been assessed and that the funds have complied with the SIS Requirements.
6.8.The Applicants have, in any event, and prior to these proceedings being commenced, undertaken that no income tax returns for a self-managed superannuation fund will be lodged in future before audits are completed. In addition, the Partnership has engaged another firm of auditors who undertake and complete the audits within two weeks. It is submitted, accordingly, that there is no risk to public interest in respect of the future preparation and lodgement of complying returns.
6.9.It is accordingly submitted that if a stay is granted pending the hearing of the merits review, the Respondent would not be disadvantaged, because the Applicants have undertaken not to lodge income tax returns prior to completion of audit.
The above submission by the Applicants is not the only place where they point out that all of the tax that was payable by the SMSFs was paid. That submission, with respect, misses the point. The conduct which gave rise to the suspensions was the First Applicant, on 125 occasions, making false declarations that the SMSFs had been audited. The fact that subsequent audits disclosed that the correct tax had been paid by the SMSFs and that they were not in breach of the law, does not diminish the seriousness of a tax agent,

upon whose honesty the process of lodging self-assessed tax returns depends,

making false declarations.
The public interest is served in tax agents, upon whose honesty the system of lodgement of tax returns depends, being held to, and being seen to be held to, the highest standard of professional and ethical conduct. I therefore do not think that stays are in the public interest in the present case.
This consideration weighs against the granting of stays.
Consequences for the Board in carrying out its functions
It is difficult to see how in this case the granting of stays would interfere with Board carrying out its functions and I note that the Board makes no submission in this regard. This consideration therefore does not weigh against the granting of stays.
Whether the applications for review would be rendered nugatory if stays are not granted
The relevant test is that identified by President Downes J in Scott, at [12], namely;
12....that the review application, if successful, would be rendered less useful, potentially, than if a stay was granted. However, having said that, it seems to me that it certainly would not be rendered nugatory or pointless and given the length of time that has already passed and the short period of time before the application will be heard, it does not seem to me that the prejudice that will be suffered by failing to grant a stay, would be substantial.
The Second Applicant argues that when the termination decision comes into effect it will, effectively, cease to exist by operation of s 45 of the Partnership Act1895 (WA) (see [58] above). If that is the case, then I accept that, insofar as the Second Applicant is concerned, the substantive application would be rendered nugatory.
In relation to the First Applicant, while I accept that he will suffer financial loss if the stay is not granted, it is not the case that the substantive application would be rendered nugatory or pointless. He will still be facing a two year prohibition on applying for registration which, if he wants to practice as a tax agent before the expiry of that period would prevent him from making an application for registration, so there will still be obvious utility in his seeking an overturning of that decision or reduction in the prohibition period.
Presumably, given the nature of the Board’s finding that the First Applicant is not a fit and proper person, the Fist Applicant would want to go to a hearing of the substantive application to clear his name. The only thing that will restore the First Applicant’s reputation is the overturning of the Decisions.
I do not accept that a refusal of a stay would render the Fist Applicant’s substantive application nugatory.
CONCLUSION
I accept that the Applicants, and others, will suffer financial loss as a result of the Decisions coming into effect and that this weighs in favour of the grant of the stays as does the possibility of the Second Applicant’s substantive application being rendered nugatory for the reasons set out in [72] above. I am not persuaded, however, on the material presently before me, that the Applicants’ prospects of success in their substantive applications are sufficient to justify the granting of the stays (see [44]-[55] above). I am also of the view that the public interest weighs against the grant of the stays for the reasons set out in [65]-[68] above.
Having considered all of the factors weighing in favour of the grant of the stays and those weighing against the grant of the stays, I find that the factors weighing against the grant of the stays outweigh those in favour.
DECISION
The Applicants’ requests for stays of the operation or implementation of the Decisions are refused.

I certify that the preceding 78 (seventy-eight) paragraphs are a true copy of the reasons for the decision herein of Deputy President Boyle

.................................[sgd]....................................
Associate
Dated: 18 May 2020

Date(s) of hearing:

Counsel for the Applicant: Mr R Sceales

Solicitors for the Applicant: Sceales Lawyers

Counsel for the Respondent: Mr MGS Crowley

Date(s) of hearing:
Counsel for the Applicant:	Mr R Sceales
Solicitors for the Applicant:	Sceales Lawyers
Counsel for the Respondent:	Mr MGS Crowley