Dadwal and Tax Practitioners Board [2018] AATA 2878 (14 August 2018)
Division:TAXATION & COMMERCIAL DIVISION
File Number(s): 2016/4295
Re:Ranjit Dadwal
APPLICANT
AndTax Practitioners Board
RESPONDENT
DECISION
Tribunal:Member K Parker
Date:14 August 2018
Place:Melbourne
The Tribunal affirms the decision under review. The effect of this decision is that Mr Ranjit Dadwal’s registration as a tax agent under the Tax Agent Services Act 2009 (Cth) (TASA) will terminate effective on 18 September 2018 and he may not apply for registration as a tax agent under the TASA until on or after 18 September 2020.
[sgd]........................................................................
Member K Parker
Catchwords – termination of tax agent’s registration – applicant convicted of three offences of indecent assault – applicant placed on Register of Sex Offenders for 15 years – assessed low to moderate risk of applicant reoffending – offending behaviour occurred as an isolated event – degree to which the applicant conveyed contrition for offending behaviour – subsequent non-disclosure of convictions and false and misleading statements to statutory bodies, professional bodies and this Tribunal – whether applicant fit and proper person under the Tax Agents Services Act 2009 (Cth) – consideration of the role of a tax agent – criminal misconduct that took place outside of professional context – consideration of significance of subsequent non-disclosures and false and misleading statements – lack of honesty, candour and integrity – decision affirmed – applicant’s registration terminated – applicant may not reapply for registration as a tax agent for a period of two years
Legislation
Sex Offenders Registration Act 2004 (Vic) s 62
Tax Agents Services Act 2009 (Cth) ss 2-5, 20-5, 20-15, 30-10, 30-35, 40-5, 40-25, 90-1Cases
A Solicitor v Council of the Law Society of NSW (2004) 216 CLR 253
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Kerin and Tax Agents’ Board of South Australia [2009] AATA 974
Law Society of South Australia v Rodda (2002) 83 SASR 541
Legal Practitioners Complaint Committee v McKerlie [2007] WASC 119
Legal Practitioners Conduct Board v Power [2013] SASCFC 118
Legal Services Board v Francis McGrath [2010] VSC 332
New South Wales Bar Association v Cummins (2001) 52 NSWLR 279
Re Davis (1947) 75 CLR 409, 416
Re Drake and Minister for Immigration and Ethnic Affairs (No.2)(1979) 2 ALD 634
Re Su and Tax Agents’ Board SA (1982) 13 ATR 192
Sargent and Tax Agents’ Board of Victoria [2009] AATA 219
Stasos v Tax Agents’ Board (1990) 21 ATR 974Ziems v Prothonotary of the Supreme Court (NSW) (1957) 97 CLR 279, 290
Secondary Materials
TPB(EP) 02/2010 – Explanatory Paper
REASONS FOR DECISION
Member K Parker
14 August 2018
Mr Ranjit Dadwal was registered as a tax agent under s 20-25 of the Tax Agents Services Act 2009 (Cth) (TASA) on 7 March 2011. Mr Dadwal was previously a member of the professional accounting body, CPA Australia, until his membership was forfeited on 9 August 2016.[1] Mr Dadwal is registered with the Australian Securities and Investment Commission (ASIC) as a self-managed superannuation fund (SMSF) auditor.[2] More recently, Mr Dadwal applied for and was granted membership of the Institute of Public Accountants (IPA).
[1] Mr Dadwal joined as a member of the CPA on 14 January 2008 – refer T-Documents ST17/288.
[2] Mr Dadwal renewed his registration as a SMSF auditor on 17 January 2017 – see Affidavit of Mr Dadwal sworn 8 February 2017 – Exhibit “A13”.
In March 2016, Mr Dadwal was convicted of three criminal offences of indecent assault including with a child under the age of 16. The Tax Practitioners Board (TPB) made a decision to terminate Mr Dadwal’s registration as a tax agent under the TASA. It also decided that he was not able to apply for registration until two years after the date of termination of his registration.
Mr Dadwal seeks review by this Tribunal of the decision to terminate his registration. By consent of the parties, a stay order was made by this Tribunal, differently constituted, which, in effect, has permitted Mr Dadwal to continue practicing as a tax agent pending the finalisation of this application on condition that he not engage any new clients.
A key issue to be decided in this application is whether Mr Dadwal meets the fit and proper person requirements under the TASA, in light of:
(a)the three criminal convictions entered against Mr Dadwal in March 2016;
(b)the conduct that took place on 10 March 2015 upon which those convictions were based; and
(c)a range of other conduct by Mr Dadwal in the form of non-disclosures and statements that the TPB contends are false and misleading. Some of that conduct was not revealed until the cross-examination of Mr Dadwal at the hearing of this application. The parties were both provided with an opportunity at the hearing and subsequently, by their respective written closing submissions, to address the additional bases identified upon which the TPB contended that Mr Dadwal’s registration as a tax agent should be terminated.
For the reasons set out below, the Tribunal is satisfied that Mr Dadwal does not meet the fit and proper person requirements for registration as a tax agent under the TASA. The Tribunal considers that the TPB properly exercised its discretion to terminate Mr Dadwal’s registration and to order that Mr Dadwal not be permitted to make an application for registration as a tax agent under the TASA for a period of two years. Accordingly, the Tribunal affirms the decision under review. The Tribunal considers it appropriate for the termination to take effect after a period of five weeks from the date of this decision. This means that Mr Dadwal’s registration will terminate effective 18 September 2018 and that he may not make an application for registration as a tax agent under the TASA until on or after 18 September 2020.
BACKGROUND
Mr Dadwal is a 39 year old married man with two young children. His second child was born in February 2016.[3]
[3] The TPB lodged a set of documents and supplementary documents with the Tribunal in accordance with its obligations under s 37 of the Administrative Appeals Tribunal Act 1993 (Cth) (referred to collectively as the T-Documents). Refer T-Documents ST18/351.
Prior to June 2014, Mr Dadwal worked for Aperio Taxation and Business Services (Aperio). At that time, Aperio was owned by Mr Dadwal (25% shareholding) and Mr Alex Gulabovski (75% shareholding).
After resigning from Aperio on 30 June 2014, Mr Dadwal started his own business through the entity Dadwal Investments Pty Ltd. Mr Dadwal said that approximately 50 or 60 clients had followed him from Aperio to his new business. At the hearing, Mr Dadwal gave evidence that a number of former employees of Aperio now work in his new business. He said they left Aperio of their own accord.
Aperio commenced litigation against Mr Dadwal in August 2014 alleging that Mr Dadwal had breached his duties as an employee and director of Aperio. A settlement was reached two years later in August 2016 requiring Mr Dadwal to make a payment to Mr Gulabovski. Mr Dadwal gave evidence that he found the litigation extremely stressful.
In late December 2014, Mr Dadwal commenced a due diligence process in relation to the purchase of an accounting practice trading as Ralph Mare & Co in Mordialloc. This process lasted for about three or four months. During this time Mr Dadwal said he would travel to Ralph Mare & Co’s offices approximately three or four days a week, generally within the hours of 9am and 10am to 5pm and 6pm. He said that on some days he travelled to both offices, Ralph Mare & Co in Mordialloc and Dadwal Investments in Moonee Ponds. Mr Dadwal eventually purchased the business of Ralph Mare & Co on 20 March 2015. By the end of 2015, Mr Dadwal said that Ralph Mare & Co had about 500 or so clients. Mr Dadwal informed CPA Australia that his business was “accounting”.[4]
[4] Refer T-Documents ST17/299.
Mr Dadwal said he travelled to India with his family in February 2015 for a holiday for three to four weeks. He said that while he was on this trip, he was involved in the process of acquiring Ralph Mare & Co and was also assisting with familial duties as his father had passed away. Mr Dadwal said he returned to Australia on about 4 March 2015.
Criminal convictions of indecent assault including with a child under the age of 16
On 2 March 2016, Mr Dadwal was convicted of three offences of indecent assault of three females aged 12, 17 and 25. The offences took place while Mr Dadwal was in a supermarket at South Morang, Victoria, on 10 March 2015, six days after returning from India. Those incidents happened at 7.23pm over the space of 20-25 minutes.[5] Two of the complainants were customers shopping at the supermarket and the third was an employee who was stacking shelves.
[5] Refer paragraph [3] of Mr Dadwal’s Closing Submissions in Reply dated 15 September 2016 and T-Documents ST17/301.
The three complainants were not known to each other or to Mr Dadwal. Mr Dadwal in his evidence at the hearing sought to give the impression that he had seen before and was familiar with the 17-year old complainant who worked at the supermarket. However, I note from the complainant’s record of interview with the Police that the 17-year old had not seen Mr Dadwal before.[6]
[6] Refer T-Documents ST10/240.
The complainants alleged as follows:
(a)the 12-year old complainant was a customer in the supermarket shopping with her mother. She said Mr Dadwal pulled her toward him with his left hand, put his arm around her waist, reached down and pinched her bottom. She said she saw him again in the next aisle, and he pinched her again and whispered something to her (she did not know what he had whispered to her);[7]
(b)the 17-year old complainant was an employee at the supermarket. She said he told her that she had some dirt on her bottom and asked if she would like a hand to wipe it off, to which she answered, “No, I’ve got it, thanks”. She said he walked past and brushed his hand against her bottom;[8] and
(c)the 25-year old complainant was a customer in the supermarket. She said she felt a firm grab on her left bottom cheek by Mr Dadwal and that Mr Dadwal followed her to two other areas in the supermarket.[9]
[7] Refer transcript of Police interview with complainant at T-Documents ST8/163-169.
[8] Refer transcript of Police interview with complainant at T-Documents ST10/236-238.
[9] Refer witness statement by complainant at T-Documents ST5/147&148.
Police interview on 13 March 2015
When Mr Dadwal was arrested, he agreed to be interviewed by the Police. The interview took place on 13 March 2015. Before the interview commenced, Mr Dadwal was informed about his right not to say anything and his right to make contact with a lawyer. Mr Dadwal decided to proceed with the interview.
Mr Dadwal admitted that he had been at the supermarket on the night in question but he denied the allegations made by the three complainants.[10] He told Police that he had commenced work on 10 March 2015 at Dadwal Investments’ offices in Moonee Ponds at 6.30am and finished work at about 4.30pm. Mr Dadwal gave evidence at the hearing before this Tribunal that he felt stressed at the time of the incidents due to the ongoing litigation with Aperio. He accepted that he had not been overly busy on the day that those incidents took place but maintained that he was stressed due to the litigation.
[10] Refer T-Documents ST9/186.
At the Police interview, when Mr Dadwal was asked whether he spoke to anyone at the supermarket, he said he spoke to “one of the girls who works there”.[11] Mr Dadwal was asked whether he had any interaction with any of the customers in the store, to which he responded:[12]
[11] Refer T-Documents ST9/196.
[12] Refer T-Documents ST9/196-202.
Mr Dadwal: Not really, I think there was one customer, I think a girl and her mum.
Police interviewer: Mm’hm.
Mr Dadwal: I think I went past them and I – just looking for – around and just bumped into either - I think I bumped into one of them.
Police interviewer: Mm’hm.
Mr Dadwal: And apart from that, no, no, I didn’t have any other conversation. I don’t recall anything else.
Police interviewer: O.K. So tell me about that – you say you bumped into somebody, tell me about that.
Mr Dadwal: As I was walking past them – so they were walking, you know, probably right in the middle, I – I was going to walk past and I think I was not sure, you know, which way to go so I just – you know, I wanted to go that part and the girl came here and I then walked right in the middle and then she came back here I just bumped very briefly into her.
Police interviewer: Mm’hm.
Mr Dadwal: But apart from that, no.
Police interviewer: O.K. Describe the bump to me?
Mr Dadwal: It happened so quickly because I was walking there and she went left first then right so - so accidentally I didn’t mean to do that but I went right in the middle…between them and as I was walking past I just, you know, tried to get her on the right side of me. That was about it. I think it was very brief probably…A second or so – probably a couple of seconds.
…
Police interviewer: Yeah. But which part – which part of you touched or which part bumped?
Mr Dadwal: No, I just – I just happened to, you know, in a – as – I wasn’t sure it happened so quickly I was just trying to get her on this side so just probably my hand touched her.
Police interviewer: Yeah.
Mr Dadwal: But that – that was about it.
…
Police interviewer: And you’ve – you’ve used your hand.
Mr Dadwal: …shoulders but I was trying to – I’m not sure, probably it was my hand and I - as far as I could remember it was probably my left hand because I was going that part and she was on my left when we happen to cross each other. So, yeah, it was probably my left hand but I’m not sure…
…
Mr Dadwal … so I just – accidentally I think probably my hand or my shoulder touched her very briefly.
Mr Dadwal describes the girl to be a “kid” who he guessed to be about the age of “probably 10, 12”.[13] This girl was shopping with her mother. Mr Dadwal said in the Police interview that he walked past them once more after the interaction described in the paragraph above.[14]
[13] Refer T-Documents ST9/204&205.
[14] Refer T-Documents ST9/205&206.
The Police interviewer explained to Mr Dadwal that it had been alleged that he had bumped into the girl, put one hand on her shoulder and put the other hand on the cheek of her bottom and that he had grabbed or squeezed her bottom. Mr Dadwal responded, “No, I definitely did not, absolutely not” and that he was “hundred per cent sure” that he did not walk past the girl again, whisper something to her and grab her bottom again.[15] Mr Dadwal stated:[16]
…So I walked past and bumped into each other, I didn’t feel anything then and then I was shopping around and the mum went past me and, you know, looked at me angrily and I thought, you know, probably that - you know, they felt that it was something that – when – at that point I realised that probably she felt that I – I’ve – I’ve done that – you know, done something wrong deliberately so I definitely did not walk past them second time.
[15] Refer T-Documents ST9/225&226.
[16] Refer T-Documents ST9/227.
Mr Dadwal also made the following statement:[17]
…And I’m – I’m – and to be frank, you know, even being a partner in the previous practice and, you know, being here I’ve got, like I said, you know, I’ve been mentoring…you know, girls from 17 to, you know, someone who is still working with me, you know, is now 22, 23, you know, seriously I mean, I’ve worked at, you know, four or five different and big places, the reputation that I’ve got it – you know, I know that does not come into play when are looking at a specific case probably but – but the reputation that I’ve got is like, you know, definitely far away from someone of that kind.
[17] Refer T-Documents ST9/225.
In relation to the second incident, Mr Dadwal was asked about his interaction with a staff member at the supermarket. Mr Dadwal made the following statement during the Police interview:[18]
[18] Refer T-Documents ST9/206-210&213
Mr Dadwal: Yeah, nothing really. I mean, she’s a funny girl I’ve seen her, you know, a couple of times before…Just was in a lane doing her work and I just walked past her…I think she was doing stocktake, she was putting things on shelves…
Police interviewer: Yeah. And you – you said you had a conversation with her?
Mr Dadwal: Yeah, briefly just funny as always, you know, just walked past and ---
Police interviewer: Mm’hm. So what – what did you say?
Mr Dadwal: Yeah, that was supposed to be funny but if – I mean, if you concentrate it does – it wasn’t as – it doesn’t – it won’t look good on me talking about that but it’s just normal stuff. Like, we, you know, it’s – she was I think sitting down and had white thing all over her – her black pants, so just in a funny way I said, “You’ve got white all over your pants”. That’s about it.
…
Police interviewer: Yeah. So sorry – sorry what did you say to her?
Mr Dadwal: Yeah, that’s – that is a bit negative but she had white I think flour or something all over her pants and I said, “There’s white all over your pants”.
Police interviewer: Mm’hm.
Mr Dadwal: I said – and she – I said, “Do you want me to brush it off?”…And that was just a fun part of it I didn’t mean it…in that way… And I just walked past and she just smiled and laughed back and, you know, as usual and then I walked past I didn’t - - -
Police interviewer: O.K. So she’s – did she say anything?
Mr Dadwal: No, no, she just smiled, she said, “No, no, I’ll do it”….She said, “Oh, I can do it myself”, and she smiled and – and, you know, just normal, I walked past and went straight to the counter after that.
…
Police interviewer: Did any part of … you bump into her?
Mr Dadwal: Definitely not, 100 per cent sure.
Mr Dadwal estimated that the employee was “probably 19, 20” years of age.[19] Mr Dadwal was asked during the Police interview whether he walked up closely behind the staff member and whether the back of his hand brushed up against her bottom, to which he denied doing so.[20]
[19] Refer T-Documents ST9/214.
[20] Refer T-Documents ST9/229.
In relation to the third incident, it was put to Mr Dadwal that the 25-year old complainant had alleged that Mr Dadwal had approached her from behind in the bakery section, walked past her and quickly grabbed her bottom cheek and squeezed it and continued to walk past. Mr Dadwal’s response in the Police interview was as follows:[21]
Seriously I do not recall any of that. I’m – I’m being truthful, I’m – I’ve – I’ve explained to you exactly about the two incidents, I seriously do not recall anything else…apart from those two.
[21] Refer T-Documents ST9/229.
Risk assessment by psychologist on 21 November 2015
In preparation for the Magistrates’ Court plea hearing, Mr Patrick Newton, forensic and clinical psychologist, assessed Mr Dadwal on 17 November 2015 and prepared a report dated 21 November 2015.[22] The report indicated that at the time Mr Dadwal was assessed, he had not entered a plea in relation to the charges against him and did not wish to comment on the specific allegations. Mr Newton assessed Mr Dadwal to be at low to moderate risk of recidivism and that he expected him to trend toward the low-risk range over the medium term if he actively participated in offence-specific treatment.[23]
[22] Refer T-Documents ST18/364.
[23] Refer T-Documents ST18/369.
Magistrates’ Court plea hearing on 23 November 2015
The transcript of the criminal proceedings in the Magistrates’ Court on 23 November 2015 in relation to these incidents forms part of the T-Documents.[24] There were five charges laid against Mr Dadwal. The prosecutor withdrew the fifth charge of “Stalking (Following Person)” and agreed that the conduct forming the basis of second charge would be rolled up into the conduct forming the basis of first charge. The conduct for the first charge was amended to “Grabbing her bottom over clothing with his hand twice”. Mr Dadwal pleaded guilty to the amended first charge and the third and fourth charges. The Magistrate found those three charges to be proven. The first charge was for the offence of “Indecent Assault With Child Under 16” and the third and fourth charges were both offences of “Indecent Assault”.[25]
[24] Refer T-Documents ST11/243-256.
[25] Refer T-Documents ST12/257, 259 & 260.
In the transcript, the Tribunal notes the following observation of Mr Dadwal’s counsel and the Magistrate:[26]
[Mr Dadwal’s counsel]: And the lateness in the plea is really reflected in his unwillingness at this stage, but we hope in the future will change, that to really grasp the nettle about what had happened and how it is to be prevented in the future.
Her Honour: That is what concerns me and that’s why I am labouring the point now.
[26] Refer T-Documents ST11/253.
Magistrate Hawkins made orders to place Mr Dadwal on the Register of Sex Offenders for a period of 15 years under s 62 of the Sex Offenders Registration Act 2004 (Vic).[27]
[27] Refer T-Documents ST11/255.
Psychologists issued a report on 24 February 2016
In preparation for the sentencing hearing, Mr Patrick Newton (and Mr Peter Haley, provisional psychologist) issued a report dated 24 February 2016 following on from eight counselling sessions that were conducted with Mr Dadwal as part of his participation in the sex offenders treatment program.[28]
[28] Refer T-Documents ST13 and Exhibit “A21”.
Mr Newton stated that Mr Dadwal had only made limited progress in his treatment with Mr Hanley and that Mr Dadwal’s difficulty discussing the details of his offending and tendency to downplay the significance of his behaviour, had posed substantial challenges to Mr Dadwal’s therapeutic progress. Mr Newton stated that while Mr Dadwal’s insight was considered to have remained at “an incipient level”, he considered that Mr Dadwal had nevertheless made some clear behavioural gains. Both psychologists identified the need for further specialised treatment of Mr Dadwal which Magistrate Hawkins ordered that Mr Dadwal continue.
In this report dated 24 February 2016, it was observed by the psychologists that Mr Dadwal’s empathy toward the complainants was “still in the formative stages of development”.[29]
[29] Ibid at paragraph [9].
It was contended by the TPB that Mr Dadwal’s omission to provide a copy of this report to the Tribunal or to the TBP, was misleading conduct. There is some overlap between the opinions expressed by the psychologists in this report and the other reports issued by Mr Newton at different times, which were produced to this Tribunal and the TBP. I am inclined to give Mr Dadwal the benefit of the doubt and to find that this was not a deliberate omission on the part of the Mr Dadwal and his lawyers.
Magistrates’ Court sentencing hearing on 2 March 2016
On 2 March 2016, Magistrate Hawkins sentenced Mr Dadwal by placing him on a Community Corrections Order for a period of 18 months which included 100 hours of unpaid community work and participation in the Specialised Offender and Assessment and Treatment Service (SOATS) as directed by Corrections.[30] The Tribunal notes that Mr Dadwal has completed the SOATS program.[31]
[30] Refer T-Documents ST14/279.
[31] Refer Exhibit “A6” – confirmation by Department of Justice and Regulation on 1 August 2017 that Mr Dadwal has completed the program.
Magistrate Hawkins referred to the seriousness of the offences but did not impose a term of imprisonment because it was Mr Dadwal’s first offence and the risk of him re-offending had been assessed as low to moderate. The Magistrate noted the protective factors which were hoped to prevent Mr Dadwal from offending again but made it clear that if he did it again, he would be imprisoned.[32]
[32] Refer T-Documents ST14/278 & 281.
Submission of annual declaration to TPB in April 2016
On about 1 April 2016, Mr Dadwal made an annual declaration to the TPB in his capacity as an individual tax agent.[33] In doing so, Mr Dadwal declared that in the last five years there were no matters that might affect his good fame, integrity and character.[34]
[33] Refer T-Documents ST25/461.
[34] Refer T-Documents ST25/462.
When it was put to Mr Dadwal by the TPB that he had failed to make a disclosure by answering “no” to this question, his lawyers provided a response dated 12 April 2016 asserting that:[35]
…When this question is asked in isolation it would seem natural that Mr Dadwal should provide details of a conviction for 3 charges in March 2016. However…
…When presented with such an example, the requirement does not seem to have application to Mr Dadwal’s circumstances. Accordingly, he concluded in good faith that he was able to make the Annual Declaration that he made in the belief that the criminal convictions only required disclosure where a sentence of imprisonment had been imposed. He now acknowledges that he was in error in reaching this conclusion and that he should have notified the Board of the conviction and the conduct leading to it. He apologises unreservedly for this.
[35] Refer T-Documents ST25/483.
The example that was referred to followed on from the question and inquired whether the person making the disclosure had been subjected to any disciplinary action by a regulator or professional association. In his affidavit sworn on 18 November 2016, Mr Dadwal stated that he was not sure if he was required to disclose the conviction and that after he read the section of TPB’s website regarding the fit and proper person requirements, he formed a belief that he did not need to disclose it. He stated that it appeared to him that only convictions involving tax offences or fraud or dishonesty, or that had resulted in a sentence of imprisonment needed to be disclosed and that did not apply to him.[36] He also stated that the TPB was already aware of the convictions before he made the declaration due to a complaint made by Mr Gulabovski.[37] However, Mr Dadwal stated that he has accepted the view of the TPB that he should have disclosed the convictions in his annual declaration.[38]
[36] Refer to paragraph [40] of the Affidavit of Mr Dadwal sworn 18 November 2016 – Exhibit “A1”.
[37] Ibid at paragraph [41].
[38] Ibid at paragraph [42].
Further psychological assessment in June 2016
Mr Newton was requested to provide a report in relation to a further assessment of Mr Dadwal undertaken on 10 June 2016.[39] Mr Newton stated that he assessed Mr Dadwal’s risk of recidivism as unchanged (i.e. he posed a low to moderate risk) based on a consideration of the nature of his offending and because the risk factors and the protective factors extant in Mr Dadwal’s case remained unchanged. He confirmed that the level of risk should trend to the low-risk range over the medium term.
[39] Refer report dated 14 June 2016 at T-Documents T3/83.
TPB terminated Mr Dadwal’s registration as a tax agent in July 2016
On 16 March 2016, the TPB was first notified about the convictions entered against Mr Dadwal by Mr Gulabovski.[40] Prior to this time Mr Dadwal had not provided any notice to the TPB about the incidents on 10 March 2015 or the resulting convictions entered on 2 March 2016.
[40] Refer T-Documents T3/32-33.
On 20 July 2016, the TPB gave notice to Mr Dadwal that on 7 July 2016 it made a decision to terminate his registration as a tax agent under the TASA, and that his registration would cease on 24 August 2016.[41] This equates to the provision of five weeks’ notice to Mr Dadwal before the termination took effect. Mr Dadwal was advised that he was not permitted to apply for registration as a tax agent for a period of two years from the date the termination of his registration took effect.
[41] Refer T-Documents T1/7-10.
CPA Australia disciplinary hearing in August 2016
On 9 August 2016, Mr Dadwal appeared before CPA Australia’s Disciplinary Tribunal.[42] At the hearing, Mr Dadwal admitted to the following:[43]
…on 10 March 2015 at 7.23pm at the Coles Supermarket during normal commercial trading hours Mr Dadwal indecently assaulted three separate complainants by touching them on the outside of their clothing but in the presence of their guardian or other persons in the aisle area of that supermarket.
[42] Refer T-Documents ST17.
[43] Refer T-Documents ST17/301.
When Mr Dadwal was invited at the Disciplinary Tribunal hearing to elaborate on what had happened, Mr Dadwal gave the following account:[44]
Mr Dadwal: Yes, it was just a bump in the veggie section of the market and I can talk about the events surrounding it because I worked really late, it was 7.30 or close to 7.45 and I was just driving back home the day and I had a call from my wife and, you know, I have it, I can produce a copy of that call for the same day and she said there were a few things that you need to bring from the supermarket because we have a young family, so I went to buy that and I was just in a hurry and bumped into someone and I got back home, I don’t remember most of it, and I simply went there, it was a matter of 23 or 24 minutes, it might be in there, and I got home and I found out three days later that I was charged.
[CPA Australia investigating case manager]: So you’re saying you just bumped - - -
Mr Dadwal: That’s all I remember.
[case manager]: That’s all you remember?
Mr Dadwal: That’s all I remember. I remember one event being bumping someone.
[44] Refer T-Documents ST17/302.
Mr Dadwal was asked why he did not appeal the charges to which he said that it was the word of three people against one and that his decision was based on legal advice, that he would be able to protect his tax practitioner’s licence if he showed remorse.[45] Mr Dadwal indicated at the hearing that he had someone in his practice who would be “coming up to CA or tax agent status” in about eight months (i.e. by the end of April 2018).[46]
[45] Refer T-Documents ST17/303.
[46] Refer T-Documents ST17/305.
CPA Australia indicated its concern as part of the disciplinary hearing that “it was a risk to the brand to have a member of the CPA Australia on the sex offender’s register for 15 years” and that it did not wish to have one of its members turning up to a discussion group with his fellow members to find out they were sitting next to a person on the Register of Sex Offenders, in particular where one of the offences was against a child, without explanation.
The Disciplinary Tribunal made a determination on 9 August 2016 that Mr Dadwal had breached a provision of CPA Australia’s Constitution and as a consequence, the Disciplinary Tribunal forfeited Mr Dadwal’s membership for a period of four years. CPA Australia granted Mr Dadwal’s request not to be named personally when it published its determination.[47]
[47] Refer T-Documents ST18.
Application for membership to IPA in April 2017
Mr Dadwal said he applied for membership of the Institute of Public Accountants (IPA) in April 2017. He said he disclosed the convictions and after providing the IPA with some information, membership was granted to him and was to take effect after his sentence had concluded (i.e. on 1 September 2017).
Further psychologist’s reports dated 12 November 2016 and 28 July 2017
Mr Newton issued further reports dated 12 November 2016 and 28 July 2017.[48] In the later report, Mr Newton stated that 24 consultations with Mr Dadwal had taken place between 2 December 2015 and 26 July 2017. Mr Newton stated:[49]
Overall, Mr Dadwal’s reluctance to discuss the thoughts and feelings involved in his offending behaviour has limited the effectiveness of the SOTP in developing Mr Dadwal’s insight. His insight into the emotions and cognitions that were involved in his offending behaviour remain limited.
…Mr Dadwal has nevertheless made good progress in developing his general awareness and communication of this thoughts and feelings, and has made significant progress in the implementation of stress management. Furthermore, Mr Dadwal has implemented behavioural relapse prevention strategies that aim to reduce his risk of recidivism.
[48] Refer Exhibis “A21” and Exhibit PH-1 of the Affidavit of Mr Hanley sworn 11 February 2017 forming Exhibit “A22” respectively.
[49] Refer Exhibit “A22”.
ISSUES
The issues to decided in the application are:
(a)whether Mr Dadwal meets the fit and proper person requirements under s 20-5(1)(a) of the TASA, in conjunction with s 20-15;
(b)if not, whether discretion under 40-5(1) of the TASA to terminate Mr Dadwal’s registration as a tax agent should be exercised; and
(c)if so, whether discretion under s 40-25 of the TASA to order that Mr Dadwal not make an application for registration as a tax agent for a specific period immediately following the termination of his registration should be exercised and if so, for what period.
LEGISLATIVE REGIME
Section 2-5 of the TASA provides as follows:
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.
Section 40-5(1) of the TASA provides as follows:
(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) you breach a condition of your registration.
Note: The Board may also terminate your registration for breach of the Code of Professional Conduct: see Subdivision 30‑B.
Section 40-25 of the TASA provides as follows:
(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.
(2) Subsection (1) does not apply if your registration was terminated because:
(a) you surrendered your registration; or
(b) you became an undischarged bankrupt; or
(c) you went into external administration.
Section 90-1 of the TASA defines “tax practitioner registration requirements” as follows:
tax practitioner registration requirements means the matters about which the Board must, under Subdivision 20 A, be satisfied before the Board is obliged to grant an application for registration under this Act.
Section 20-5(1)(a) of the TASA provides as follows:
(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…
Section 20-15 of the TASA prescribes non-exhaustive criteria for deciding whether an individual is a fit and proper person, as follows:
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; and
(b) without limiting paragraph (a):
(i)whether an event described in section 20‑45 has occurred during the previous 5 years; and
(ii)whether the individual had the status of an undischarged bankrupt at any time during the previous 5 years; and
(iii)whether the individual served a term of imprisonment, in whole or in part, at any time during the previous 5 years.
Section 30-35 of the TASA provides as follows:
Individuals
(1)If you are a *registered tax agent, BAS agent or tax (financial) adviser and an individual, you must notify the Board in writing whenever:
(a)you cease to meet one of the *tax practitioner registration requirements; or
(b)an event affecting your continued registration, as described in section 20 45, occurs; or
(c)there is a change in your business or email address or of any other circumstances relevant to your registration.
…
Companies
(3)If you are a *registered tax agent, BAS agent or tax (financial) adviser and a company, you must notify the Board in writing whenever:
(a)you cease to meet one of the *tax practitioner registration requirements; or
(b)an event affecting your continued registration, as described in section 20 45, occurs in respect of a director of the company; or
(c)an individual becomes, or ceases to be, a director of the company; or
(d)there is a change in your business or email address or of any other circumstances relevant to your registration.
When notice must be given
(4)You must give the notice within 30 days of the day on which you become, or ought to have become, aware that the event occurred.
Note: A breach of this subsection is a breach of section 8C of the Taxation Administration Act 1953 and of subsection 30-10(2) of this Act.
Section 30-10 sets out The Code of Professional Conduct for tax agents. Relevantly, subparagraphs (1), (2) and (3) of this provision are set out below:
Honesty and integrity
(1) You must act honestly and with integrity.
(2)You must comply with the *taxation laws in the conduct of your personal affairs.
(3) If:
(a)you receive money or other property from or on behalf of a client; and
(b) you hold the money or other property on trust;
you must account to your client for the money or other property.
TPB Explanatory Paper on the fit and proper person requirements
The TPB issued an explanatory paper TPB(EP) 02/2010 (Explanatory Paper) setting out the TPB’s interpretation of the fit and proper person requirements in subdivision 20-A of the TASA. This instrument does not have the force of law. However, it represents the current policy of a statutory body. For this reason, the Tribunal considers it appropriate to consider those Guidelines and act consistently with them, unless there are good reasons not to or unless the Tribunal considers them to be inconsistent with the legislative regime, which the Tribunal considers does not apply.[50]
[50] Refer Re Drake and Minister for Immigration and Ethnic Affairs (No.2)(1979) 2 ALD 634
CONSIDERATION
There were a number of bases upon which the TPB contended that Mr Dadwal did not meet the fit and proper person requirement under s 20-5(1)(a) of the TASA and why his registration as a tax agent should be terminated, and why he should be banned from re-applying for registration for two years, including:[51]
(a)the seriousness of Mr Dadwal’s conduct at the supermarket on 10 March 2015;
(b)the seriousness of Mr Dadwal’s three criminal convictions for the offences of indecent assault, including one with a person under the age of 16;
(c)the seriousness of Mr Dadwal being a person placed on the Register of Sex Offenders for a period of 15 years;
(d)Mr Dadwal’s limited insight into his emotions and cognitions that were involved in his offending behaviour and lack of contrition (and late guilty plea);
(e)the lack of evidence that Mr Dadwal’s recidivism risk had improved beyond the previously assessed “moderate-low” level;
(f)Mr Dadwal’s repeated failure to make full and proper disclosure of relevant matters to the TPB in his annual declarations and renewal forms;
(g)Mr Dadwal’s misleading and untruthful statements to the Police, the TPB, the ATO, ASIC and CPA Australia; and
(h)Mr Dadwal’s reluctance to take responsibility for his lack of candour, honesty and integrity in his dealings with the Board and the Tribunal.
[51] Refer paragraph [223] of the TPB’s Closing Submissions.
Regarding the allegations that Mr Dadwal had failed to disclose matters to the TPB and had made misleading statements, Mr Dadwal conceded that “he could have done better”. Mr Dadwal contended that TPB was “eager to construe [Mr Dadwal’s] statements as misleading regardless of the circumstances” and that the Tribunal should be wary of accepting TPB’s construction of the facts. It was contended that the Tribunal should remain open to finding that not every statement that could have been better expressed by Mr Dadwal was intended by him to mislead.[52] It was also contended that Mr Dadwal ought to be granted some latitude where statements made by him concerned “technical legal concepts” of which he contended he could not be expected to be “aware of the nuances”.[53]
[52] Refer paragraph [87] of Mr Dadwal’s Closing Submissions in Reply dated 15 September 2016.
[53] Ibid at paragraph [10].
Mr Dadwal contended that it had been an extremely busy and stressful period since July 2014 with the criminal proceedings from March 2015 to March 2016; the commercial proceeding with Aperio from August 2014 to August 2016; the TPB proceeding since March 2016; his acquisition of Ralph Mare & Co in 2015 and the birth of his second child in February 2016. He contended that “some understanding of his position could be expected”.[54]
[54] Ibid at paragraph [88].
Mr Dadwal contended the main matters pertaining to the question of whether he met the fit and proper person requirements were the convictions that were recorded against him on 2 March 2016 and declarations made to the TPB since then.
In that regard, it was contended by Mr Dadwal that the Tribunal was bound to follow the High Court of Australia decision in A Solicitor v Council of the Law Society of NSW (2004) 216 CLR 253 (A Solicitor). This case involved a solicitor who had pled guilty to four counts of aggravated indecent assault and who also failed to disclose it to the Law Society of NSW until after he had appealed the conviction and had them quashed. The High Court found that the solicitor was not unfit to practice in light of him engaging in “more serious conduct”. Mr Dadwal contended that in light of that decision, the Tribunal should find that Mr Dadwal is and had been at all times a fit and proper person.[55]
The conduct at the supermarket on 10 March 2015, the resulting convictions, Mr Dadwal being placed on the Register of Sex Offenders, Mr Dadwal’s attitude to those matters and the assessed risk of recidivism
[55] Ibid at paragraph [89] and [90].
The Tribunal finds that on the evening of 10 March 2015, Mr Dadwal attended a supermarket in South Morang and within a space of 25 minutes:
(a)he pinched (twice) the bottom of a 12-year old girl going about her shopping and whispered into her ear;
(b)he grabbed once the bottom of a 25-year old woman going about her shopping; and
(c)he made a suggestive, uninvited and unwelcome comment to a 17-year old girl going about her work and brushed his hand against her bottom as he walked past her.
Mr Dadwal said he was enormously stressed at the time. He proffered no other explanation. I find that being stressed at the time was not an acceptable explanation for his conduct. Conduct of the kind engaged in by Mr Dadwal is intolerable irrespective of the stress level that any person is experiencing.
Mr Dadwal’s contention that his conduct was an aberration and an isolated occurrence ignores the seriousness of what he did to those innocent young women and girl shopping and working at the supermarket on that day. The crimes he committed carried a maximum penalty of 10 years as an indication of the seriousness of that type of offence. Mr Dadwal was not imprisoned for his offences in consideration of a number of things, but the Magistrate made it clear that if he re-offended, he would be imprisoned.
The seriousness of the offences Mr Dadwal committed was also reflected in that he was placed on the Register of Sex Offenders. Mr Dadwal sought to downplay this during the disciplinary hearing before CPA Australia, by saying that it was an “automatic thing” to be placed on the Register for 15 years. However, this ignores the fact that it is automatic for good reason - it is automatic as a consequence of the seriousness of his offences, and the need for the community to implement ongoing reporting measures to protect other members of the community from Mr Dadwal and his demonstrated propensity to engage in such conduct in times of stress.
I have little doubt that Mr Dadwal’s conduct as set out in paragraph [62] would offend a layman’s notion of whether he was a fit and proper person in the general sense of the phrase. His actions were criminal. However, in the application before me, I am required to make my decision in the specific context of the TASA. The phrase “fit and proper person” referred to in the TASA in not specifically defined. Non-exhaustive mandatory criteria are prescribed in s 20-15 of the TASA. This requires the Tribunal to have regard to whether Mr Dadwal is “of good fame, integrity and character”.
The TPB drew the Tribunal’s attention to the High Court of Australia decision in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 where Toohey and Gaudron JJ found that the expression “fit and proper person” carried no precise meaning and that it took its context from the activities in which the person is or would be engaged in and the ends to be served by those activities. At page 380 of this decision, their Honours observed:
…The concept of ‘fit and proper’ cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur. The list is not exhaustive but it does indicate that in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.
The question that arises in this application is what bearing the misconduct that took place outside of the realm of Mr Dadwal’s professional practice should have on the assessment of whether he meets the fit and proper person requirements under the TASA.
In A Solicitor, the High Court addressed the distinction between personal and professional misconduct. At paragraph [20], it was observed as follows:
20. …The dividing line between personal misconduct and professional misconduct is often unclear. Professional misconduct does not simply mean conduct by a professional person. At the same time, even though conduct is not engaged in directly in the course of professional practice, it may be so connected to such practice as to amount to professional misconduct. Furthermore, even where it does not involved professional misconduct, a person’s behaviour may demonstrate qualities of a kind that require a conclusion that a person is not a fit and proper person to practise…
The High Court in A Solicitor referred to the observations Kitto J in Ziems (1957) 97 CLR 279 as follows:
It is not difficult to see in some forms of conduct, or in convictions of some kinds of offences, instant demonstration of unfitness for the Bar. Conduct may show a defect of character incompatible with membership of a self-respecting profession; or, short of that, it may show unfitness to be joined with the Bench and the Bar in the daily co-operation which the satisfactory working of the courts demands. A conviction may of its own force carry such a stigma that judges and members of the profession may be expected to find it too much for their self-respect to share with the person convicted the kind and degree of association which membership of the Bar entails. But is will be generally agreed that there are many kinds of conduct deserving of disapproval, and many kinds of convictions of breaches of the law, which do not spell unfitness for the Bar; and to draw the dividing line is by no means always an easy task.
The TPB’s Explanatory Paper provides guidance to tax agent’s on this issue as follows (emphasis added):[56]
112. Consistent with the above, conduct need not occur directly in the course of professional practice to constitute misconduct or improper conduct for the purposes of assessing fitness and propriety for tax or BAS agent registration. Such conduct will impact adversely on fitness and propriety where it is “sufficiently closely connected with such practice,” undermines the reputation or standards of the profession or demonstrates the presence of qualities (such as dishonesty or deception) that are inconsistent with the standards and expectations to practise as a registered agent.
[56] Refer T-Documents T6/118.
In paragraph [112] of the Explanatory Paper, the TPB makes reference to the decisions of Kerin and Tax Agents’ Board of South Australia [20009] AATA 974 (Kerin) and Sargent and Tax Agents’ Board of Victoria [2009] AATA 219 (Sargent). In Kerin, the AAT affirmed a decision to refuse registration as a tax agent of a person who had been convicted of knowingly making a false statement to a customs officer; importing prohibited firearms parts; and for importing “Tier 2 goods” without approval. In Sargent, the AAT affirmed a decision to terminate the registration of a tax agent who had been convicted on a number of criminal charges involving stalking and child pornography for which he was imprisoned and ordered to pay a fine and to comply with other orders. The tax agent in Sargent contended that his conduct arose from his poor handling of a stressful series of events.
The TPB in its Closing Submissions cited three High Court of Australia decisions where it was recognised that conduct that had occurred outside of professional practice and did not involve professional misconduct, had nevertheless revealed character defects that resulted in a finding that the person was not a fit and proper person to practice.[57] Spigelman CJ in New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 at [56], elaborated on what was required (emphasis added):
…The authorities appear to me to suggest two kinds of relationships that justify applying the terminology in this broader way. First, acts may be sufficiently closely connected with actual practice, albeit not occurring in the course of such practice. Secondly, conduct outside the course of practice may manifest the presence or absence of qualities which are incompatible with, or essential for, the conduct of practice. In this second case, the terminology of ‘professional misconduct’ overlaps with and, usually it is not necessary to distinguish it from, the terminology of ‘good fame and character’ or ‘fit and proper person’.”
[57] Those cases included A Solicitor as referred to above, Re Davis (1947) 75 CLR 409, 416 and Ziems v Prothonotary of the Supreme Court (NSW) (1957) 97 CLR 279, 290.
In the Supreme Court of Western Australia case of Legal Practitioners Complaint Committee v McKerlie [2007] WASC 119 (McKerlie), Martin CJ held that conduct that was most likely to result in a lawyer being struck off the roll of practitioners was that which undermined the trustworthiness of the practitioner or which suggested a lack of integrity, so that he or she could not be trusted to deal fairly within the system in which he or she practised.
In Sargent, the AAT was satisfied that the principle arising from McKerlie in the context of the legal profession, applied equally to tax agents. I agree. The professional settings for legal practitioners bear close resemblance to the professional settings for tax agents: both operating within a highly regulated environment and requiring a regular interface with courts, tribunals and government officials who rely upon legal practitioners and tax agents to deal with them honestly, transparently and with integrity about the affairs of their clients.
The TPB referred the Tribunal to two more authorities. The first was the decision in Law Society of South Australia v Rodda (2002) 83 SASR 541 (Rodda) involving similar conduct to that engaged in by Mr Dadwal. Mr Rodda, a lawyer, had pleaded guilty (12 months after charges were laid against), to two counts of indecent assault with a minor. The conduct was said to be isolated and impulsive and involved kissing and touching a girl on the outside of her clothes. The Full Court of South Australia struck Mr Rodda off the roll of practitioners and held that the committal of the offences had indicated that the lawyer lacked the qualities necessary for the conduct of a legal practice and he could not be regarded as a person in whom clients, especially vulnerable ones, could place their complete trust and that it had damaged his ability to maintain professional relationship with other members of his profession. The Tribunal notes the following observation at [29]:
There is another factor. The reputation and standing of the legal profession in the public eye are important. Public confidence and trust in the legal profession is important to the effective functioning of the profession. That confidence and trust rest in part of the reputation and standing of the profession. The public could not view with respect, and have complete confidence in, a person with such serious and recent convictions. Were the court to continue to hold Mr Rodda out as a fit and proper person to remain a member of the profession, the standing of a profession which permitted a person who had recently committed such serious offences to remain one of its members.
The second was the decision in Legal Practitioners Conduct Board v Power [2013] SASCFC 118 in which the Full Court of South Australia struck a lawyer off the roll of practitioners who had pleaded guilty to five offences including the indecent filming of persons including minors and the possession of pornography. The filming took place at his house, his church and the toilet facilities at a church camp. The lawyer engaged in those activities as he was undertaking his role as a church youth group leader. The Court in that case held that to hold the lawyer out as a fit and proper person to remain a member of the profession would bring the profession into disrepute.[58]
[58] Refer paragraph [39] of this decision.
The Tribunal has also the considered the decision of Warren CJ of the Supreme Court of Victoria in Legal Services Board v Francis McGrath [2010] VSC 332 where a lawyer, who had pleaded guilty to child pornography offences, was struck off the roll. I consider the following observation has particular relevance to this application:
14. First, conviction for any serious breach of the law must call into question a practitioner’s willingness and ability to obey the law which is integral to the civic office which they perform and the trust reposed in them to properly perform that function…
Following a consideration of the guidance in the Explanatory Paper and the authorities referred to above, I turn now to the individual circumstances of Mr Dadwal’s case. I am satisfied that the seriousness of Mr Dadwal’s conduct toward the three complainants at the supermarket on 10 March 2015, his convictions and his placement on the Register of Sex Offenders for a period of 15 years, was such that his continued registration as a tax agent in the short term would be likely to bring his profession into disrepute.
Firstly, I am concerned about Mr Dadwal’s persistent failure to properly admit to, accept responsibility for or to show genuine concern for the three complainants involved in the offences. At certain times, Mr Dadwal admitted to engaging in the conduct and at other times, for instance after he had pleaded guilty and once the criminal proceedings were over, he reverted to a position of virtually denying that he ever intended to do wrong, except to admit that he accidently bumped the 12-year old girl and that what he said to the 17 year old was meant by him to be funny. Instead, right up until the hearing of this application Mr Dadwal seemed to be primarily focussed on his suspicions that he had been set up by his former business partner, Mr Gulabovski.
Mr Dadwal was asked whether he had read the reports of the pyschologists, Mr Newton and Mr Handley. After initially stating that he had not, when pressed, he said that he had read the reports dated 12 November 2016 and 28 July 2017 and that he did not consider the matters raised in them to be incorrect, aside from the conclusion. He said he had seen the report dated 14 June 2016 but he had not read it. He said he had not seen the other reports. When asked why he had not read the other reports he answered, “Because I’m discussing events with them every week or every fortnight---“. He also said he did not get a copy of his affidavits (to which two of those reports were attached), until the day before the first day of the hearing.
The Tribunal considers that Mr Dadwal’s lack of interest in obtaining from his lawyer and reading each of those psychologists’ reports is reflective of a person who had little interest in gaining insight about what he had done to the complainants. I do not accept his explanation that he did not feel the need to do so because he was discussing it with the psychologists, particularly in light of reports about his varying degrees of willingness to talk to them about what happened and his reasons for his offending behaviour.
When Mr Dadwal gave evidence at the hearing, it was notable that he did not, of his own volition, reflect upon or talk about the impact of his actions on the three complainants or to indicate that he was concerned about this. Nor did he acknowledge how he had infringed upon their basic right to go about the business of grocery shopping or work at the supermarket without being in fear of being subjected to indecent assault. Instead, his evidence sought to downplay the significance of those events and reflected that Mr Dadwal was more concerned about the previous conflict between him and Mr Gulabovski and how stressed this had made him feel at the time. This was an important point of distinction between the facts in this application and those existing in the case of A Solicitor.
I find that Mr Dadwal engaged in the conduct described in paragraph [62] at a time when he was neither under the influence of drugs or alcohol.[59] Mr Dadwal was asked at the hearing whether he had been drinking that evening to which he said he had not. He was later assessed by Mr Newton not to have been suffering from a mental health disorder.[60] Mr Newton also stated that he estimated Mr Dadwal’s intelligence to fall at the higher end of the normal range.[61] The Tribunal is satisfied that this is not a case of a person struggling to understand what the law was or what the consequences of breaking it might be.
[59] Refer paragraph [18] of Mr Newton’s report dated 21 November 2015.
[60] Ibid at paragraph [21] where Mr Newton stated there was no indication from Mr Dadwal’s reports to suggest that he was suffering any psychological disorder at the time of offending.
[61] Ibid at paragraph [22].
It is evident that Mr Dadwal engaged in the conduct on 10 March 2015 with the full knowledge of what he was doing and its criminal and abhorrent character. By doing so, it demonstrated that Mr Dadwal lacked both judgement and understanding when he committed those offences. His lack of judgement and understanding reflects poorly on Mr Dadwal with respect to his capacity to act with judgement and understanding when performing his professional functions as a member of the highly regulated profession of offering tax agent services to members of the public and the attendant dealings he is required to have with the ATO as part of fulfilling that role.
At the hearing, Mr Dadwal accepted that his role as a tax agent was to operate as a gatekeeper between tax payers and the Commissioner of Taxation and to ensure that his clients complied with the law. He also agreed that it was important that the ATO and the Commissioner could rely upon a tax agent’s competency and integrity. I am not satisfied that Mr Dadwal pays sufficient regard to acting in compliance with the legal system, in a personal or professional context, in situations where it is does not suit his immediate needs. This was demonstrated by Mr Dadwal in his decision to act in disregard of serious criminal laws including those involving a minor, as he did at the supermarket on the night of 10 March 2015.
I also share the concerns of CPA Australia that if Mr Dadwal remained as a registered tax agent, that he would be at liberty to attend CPA Australia’s discussion groups with other registered tax agents and the concern they may feel about being in the company of a person placed on the Register of Sex Offenders; who had a criminal record; and who is one step away from being imprisoned should he reoffend.
If Mr Dadwal’s registration is not terminated, I am also concerned in relation to the role that Mr Dadwal would continue to hold in his accounting practice as a registered tax agent where he may come into contact with young women and graduates both as employees of his firm or as clients of his practice. The evidence was that he had mentored young graduates in the past. The setting for those interactions as an employer would be one where he will hold a considerable degree of power. The setting for his interactions with clients as a registered tax agent would be one where he will hold a considerable degree of authority.
Over the period from November 2015 to July 2017, Mr Newton has not been prepared to downgrade his assessment of Mr Dadwal’s risk of recidivism. Mr Dadwal was assessed to remain at the low to moderate level. Given the nature of the offences concerned, this level of risk (albeit in the bottom half of the scale) does not leave the Tribunal with a great deal of comfort. While it is acknowledged that there continues to be protective factors in place in Mr Dadwal’s life that should act to contain the risk, it is still early days. The Tribunal takes this in to account in applying the sanctions in the TASA in a way that will protect the reputation of the profession, which the Tribunal considers extends to protecting those working within it and the clients receiving the services from those registered under the scheme. If employees or clients of tax agents were to come to harm, should Mr Dadwal experience another stressful period in his life and re-offend, I am satisfied that the profession would fall into disrepute.
Non-disclosures and statements made by Mr Dadwal to the TPB; The Tax Institute; CPA Australia; the Police; this Tribunal; the ASIC and the ATO
General principles arising from authorities
In the Explanatory Paper, the following guidance is provided by the TPB to registered tax agents as relevant to this issue:
88 Broadly, the cases highlight that a tax or BAS agent must properly maintain their relationships with the TPB and the Commissioner such that these agencies can rely on the agent to undertake their role honestly, competently and with integrity, and therefore with the level of fitness and propriety required to hold registration.
Relationship with the TPB
…
92 Furthermore, the making of false or misleading statements by an agent to the TPB (whether on an application form or otherwise in the course of providing information) could well be sufficient for a finding that the agent does not possess the competence, good fame, integrity and character, and therefore the fitness and propriety, for registration.
In the Administrative Appeals Tribunal decision in Re Su and Tax Agents’ Board SA (1982) 13 ATR 192, a tax agent failed to disclose particular tax convictions in three annual statements to the TPB’s predecessor. This was considered sufficient to warrant his removal from the register. In this case Davies J considered the notion of fit and proper person in the context of the functions of a tax agent and observed as follows (emphasis added):
The function of a tax agent is to prepare and lodge income tax returns for other person. A person is a fit and proper person to handle the affairs of a client if he is a person of good reputation, has a proper knowledge of taxation laws, is able to prepare income tax returns competently and is able to deal competently with any queries which may be raised by officers of the Taxation Department. He should be a person of such competence and integrity that others may entrust their taxation affairs to his care. He should be a person of such reputation and ability that officers of the Taxation Department may proceed upon the footing that the taxation returns lodge by the agent have been prepared by him honestly and competently.
Hill J in the decision of Stasos v Tax Agents’ Board (1990) 21 ATR 974 expanded upon the functions of a tax agent, stating that they extended to preparing objections and dealing with clients, officers of the TPB, the ATO and tribunals. The Tribunal was taken to the following paragraphs at page 985 of this decision (emphasis added):
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 Commission 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.
…
The Commissioner and his officers must be able, also, to accept the word of a tax agent when acting for a taxpayer in negotiations, and a fortiori in matters proceeding in a Board, the Administrative Appeals Tribunal or indeed a court it is imperative that the honesty and integrity of the tax agent not be called into doubt.
Non-disclosures and statements to the TPB (and The Tax Institute)
At the hearing, Mr Dadwal accepted as a general proposition that the TPB played an important role in supervising tax agents and that it was important as a tax agent to demonstrate that he had been frank and cooperative in his dealings with the TPB and did not mislead the TPB in any way.
Non-disclosure of convictions to the TPB
The TPB contended that Mr Dadwal should have notified it when the convictions were entered against him on 2 March 2016, in the same way that Mr Dadwal wrote to CPA Australia to advise it of the convictions. Counsel for TPB asked Mr Dadwal at the hearing whether he was aware of his continuing disclosure obligations under s 30-35 of the TASA. Mr Dadwal said he was not aware of those obligations. At first he said he had no reason to read the TASA before he was suspended. Mr Dadwal later changed his evidence and said he had read part of the TASA before that time and part of the TASA after the suspension. Mr Dadwal said he read the section dealing with the fit and proper person requirement before he made his annual declaration to the TPB but he did not read the Explanatory Paper. Mr Dadwal said he decided he would wait to disclose such matters when he submitted his annual declaration to the TPB. He also said he was dealing with a number of other issues at that time and he wanted to focus on CPA Australia.
Ignorance by Mr Dadwal of his obligations under s 30-35 of the TASA is no excuse. In fact, they raise an issue about whether Mr Dadwal, who had been a practising tax agent for some time, had the requisite level of knowledge about the obligations of a tax agent to be able to act competently as one under the TASA. Mr Dadwal conceded at the hearing that given the seriousness of the convictions that a prudent tax agent acting with integrity should have done more than what he did.
I have considered the precise wording of s 30-35 of the TASA and it appears to the Tribunal that the obligation of a tax agent to notify the TPB crystallises “whenever [the tax agent] ceases to meet one of the tax practitioner registration requirements”. In the case of the fit and proper person requirement, being non-specific as to when it will apply and ultimately dependent upon the individual circumstances in each case, I do not consider it fair to conclude that it must have been abundantly clear to Mr Dadwal that at the time the convictions had been entered, that he had ceased to meet the fit and proper person requirements. That was a matter yet to be determined and from Mr Dadwal’s point of view, even though the Magistrate had foreshadowed to Mr Dadwal that his conduct “had the potential to influence that question of good character”, it was by no means clear beyond doubt at that point. On this basis, I conclude that Mr Dadwal did not fall short of his continuing disclosure obligations under this provision at the time the convictions were entered, primarily on account of the high bar that I consider is set by the wording of the provision in s 30-35 of the TASA.
However, the Tribunal is satisfied that Mr Dadwal failed to disclose those convictions to the TPB when he was prompted and obligated to do so, when making his annual declaration in April 2016. On the declaration form, Mr Dadwal was asked the following question, “In deciding whether an individual is a fit and proper person, the TPB must consider whether the individual has: … had matters that may affect your good fame, integrity and character e.g. subject to any disciplinary action by a regulator or professional association. Have any of the above events happened to you in the last five years?” Mr Dadwal answered: “No”.[62]
[62] Refer T-Documents T3/49.
I do not accept the explanation given by Mr Dadwal that he misunderstood the question that was being asked of him on the declaration form on account of the examples that followed the description of the type of matters that were required to be disclosed. As the psychologists’ have stated, it appeared to them that Mr Dadwal intelligence was estimated to be at the higher end of the normal range. I am satisfied that Mr Dadwal had sufficient cognitive capability to understand that the reference to “e.g.” was a reference to “example” and that an example is just that – an example of what might fall within the description of things required to be disclosed, as distinct from it being a further definition or limitation of the matters intended to be caught by the description. I am also mindful of Mr Dadwal’s evidence that he did not disclose the convictions straight away because he considered that it could wait until he submitted the annual declaration.
I consider that it was clear to Mr Dadwal when he completed the form that his convictions were matters that fell within the stated description of matters that he was required to disclose in the annual declaration. Magistrate Hawkins warned Mr Dadwal about the potential for the convictions to influence the question of Mr Dadwal’s good character.[63]
[63] Refer ST14/279 where Magistrate Hawkins stated in open court, “It is not clear whether a conviction of itself will impact on your career because it is about a good character test. Clearly a conviction being recorded against you has the potential to influence that question of good character…”.
Mr Dadwal’s barrister also provided Mr Dadwal’s lawyers with the following advice on 19 November 2015:[64]
… Mr Dadwal must know that whatever penalty is imposed on him after a finding of guilt will likely have some bearing on his professional life. He will need to pass the fit and proper person test require by by-law 3.16 of the CPA rules. Necessarily that will involve consideration by them of both the conduct he has been found guilty of (or admitted) as well as the penalty imposed on him. The penalty will be lesser if he pleads guilty to it. We are more likely to be in a position to urge a more benign sentence be imposed on him on a plea. We are more likely to be able to to be pro-active in making successful representations of his professional bodies and contextualize the offending and explain it to them after a plea of guilty…
[64] Refer Exhibit “A4”.
Mr Dadwal’s barrister provided his lawyers with further advice on 23 November 2015 as follows:[65]
Professional consequences
The client should be encouraged to make enquiries of the CPA etc (or ask you to do so anonymously) to see what his reporting obligations are to them now that he has pleaded. What I have said in my previous memo on this point still applies.
[65] Refer Exhibit “A5”.
At the hearing, Mr Dadwal was asked the following question:
Ms Shand: So at the time you pleaded guilty it was front of mind to you, was it not, that your plea of guilty was going to impact on whether you were a fit and proper person for the purposes of your tax agent licence, was it not? Having receipt of this advice? And if you need me - - -?
Mr Dadwal: --- Yes, it was.
I consider that Mr Dadwal’s attempt to explain away why he did not make the disclosure also displayed a conscious attempt by him to keep the TPB spotlight away from his self-created predicament. He gave evidence that he did not seek legal advice about the issue at a time when he had regular contact with his lawyers and could have easily done so. I consider that he consciously decided not to seek that advice because it was better if the matter was not clarified for him, particularly in light of the previous advice that been given by his barrister as referred to in paragraphs [100] and [101].
Further, it was not an answer for Mr Dadwal to suggest the non-disclosure was insignificant or not of any consequence because Mr Gulabovski had already alerted the TPB about it by making the complaint to this body immediately following the convictions. The Tribunal considers that this should have made it easier for Mr Dadwal to err on the side of caution and to include it on the form, rather than take the view that it was not important for him to disclose it. On balance, I am satisfied that Mr Dadwal’s motivation for not disclosing his convictions on the form was a desire to keep the number of TPB staff who knew about his convictions to a minimum.
This reflects poorly on Mr Dadwal’s character. At the hearing, Mr Dadwal agreed that it was necessary for a tax agent to advise the ATO if it came to his knowledge that a mistake had been made in completing a client’s tax return. Mr Dadwal’s non-disclosure casts considerable doubt on whether he has the integrity or strength of character to admit to the ATO when mistakes have been made or to confess to matters that are not in the interests of Mr Dadwal or his clients to disclose or might otherwise cause him embarrassment.
Statements made to the TPB and The Tax Institute about the Magistrates’ Court proceedings
On 21 April 2016, Mr Dadwal’s lawyers wrote to the TPB. In this letter, Mr Dadwal’s lawyers stated that:
The Court had determined that those acts or indecency were at the lowest level and that the matter should be dealt with summarily.
The transcripts of the hearings before the Magistrates’ Court were not attached to this letter. Mr Dadwal gave evidence at the hearing that:
(a)he had reviewed the letters and submissions that were prepared by his lawyers previously on his behalf before they were sent to the TPB or CPA Australia;
(b)he was satisfied that they were correct to the extent of his knowledge except that he was not sure about the legality of some of the things; and
(c)they had been sent on his instructions to his lawyers to do so.
Mr Dadwal subsequently adopted a similar representation as set out below, in his own letter to The Tax Institute on 5 May 2017, when it requested further details from him about the convictions:[66]
The Court determined that the acts of indecency were at the lowest level and that the matter should be dealt with summarily in the Magistrates’ Court.
[66] Refer Exhibit “A7”.
The Tribunal considers the statement in paragraphs [106] and [108] to be a gross misrepresentation by Mr Dadwal (and his lawyers acting on his instructions) about what transpired in the Magistrates Court. At no stage did the Court state that the acts of indecency were at the lowest level, as accepted by Mr Dadwal at the hearing. To the contrary, Magistrates Hawkins informed Mr Dadwal directly on 2 March 2016 as follows (emphasis added):[67]
Would you stand please, Mr Dadwal. You appear before the court today pleading guilty to three charges. They include an indecent act with a child under 16. These offences are going up on the scale of seriousness because they involve you making actual contact with each of the three complainants and it is particularly concerning to the court and the community at large that one of the complainants was a young child; that these offences have occurred in Coles Supermarkets, public places where every member of the community, particularly women and children, are entitled to feel safe going about their business.
There is very little put by way of explanation to explain your behaviour. Indeed, I am little concerned that the psychologist reports that you are unwilling to attempt to discuss what happened with the psychologist and, as I said to you earlier, this is essential in terms of understanding what might have motivated that behaviour so that you can attempt to work to change those factors into the future and to reduce your risk of reoffending.
Quite rightly, the community views any form of sex offence most seriously and where your offending has escalated to the point of touching other people there needs to be a series of strong interventions to achieve a number of purposes. The first is to deter you form engaging in this sort of behaviour in the future, but it is also to send a really clear message to the community that it is just not okay in any way, shape or form to engage in unwelcome sexual activity with other people, particularly in relation to children.
The second one is one of the main objectives of sentencing and particularly where you come before the court as a first time offender is to look at therapeutic options as to how to assist you to address, identify whatever might have been some motivating causes and to try and improve the prospects of you not committing any further offences and, indeed, committing more serious offences in the future and this is really, really important. One way to achieve this would be to simply lock you up in goal. However, this is a first offence. You are assessed as low to moderate risk and you have got a number of significant protective factors which would more hopefully mean that you can turn this around and you do not offend again in future, but if you do, be under no allusion that that will be the consequences.
[67] Refer T-Documents ST14/277&278.
As a consequence, I find that Mr Dadwal’s representations to The Tax Institute as set out in paragraph [108] and the similar representations made by his lawyers on his instructions to the TPB as set out in paragraph [106] above were misleading and intended to create an impression to the TPB and The Tax Institute that Mr Dadwal was convicted of low level offences, when that was not the case. This was exacerbated by Mr Dadwal and his lawyers electing not to include the Magistrates Court transcript in his correspondence to the TPB and The Tax Institute to present to those bodies the truth about what happened at the Magistrates’ Court, when they could have easily done so.
Statement made to Mr Newton and in turn, conveyed to the TPB
Mr Newton, in his report dated 17 June 2016, stated as follows:[68]
Mr Dadwal told me that he had communicated with all his Moonee Ponds clients individually and disclosed his offending conduct to them. He said he had done this to ensure that they were continuing to engage him on a fully informed basis and so that any issues which might arise could be directly discussed.
[68] Refer paragraph [9] of Mr Newton’s report dated 14 June 2016 – Exhibit “RD-3”.
Mr Dadwal in his first affidavit sworn on 18 November 2016 stated:
Over the course of several months following the sentencing, about ten clients of the Moonee Ponds practice gave me letters that they received which enclosed a print-out of the Magistrates’ Court conviction...
On the second day of the hearing before this Tribunal, Mr Dadwal gave the following evidence and made the following concessions:
Ms Shand: Is it true that around that time when those clients came to you with copies of those convictions, you weren’t sending them any more information to disclose the nature of the convictions or the charges or the details behind that, were you?
Mr Dadwal: No.
Ms Shand: When they called you or contacted you to give you those letters, did you provide them any more information?
Mr Dadwal: Yes.
Ms Shand: What information was that?
Mr Dadwal: As what had happened.
Ms Shand: When you say what had happened, what specifically? What were the words you used, that you said to those clients?
Mr Dadwal: There were about five charges, two were withdrawn. Sorry, one was withdrawn, and I was convicted for three charges.
Ms Shand: What did you say about those charges to those ten clients or so?
Mr Dadwal: That there was one minor.
Ms Shand: That there was one minor. And what did you say about the nature of the charges?
Mr Dadwal: Indecent assault.
Ms Shand: Did you provide any details about that?
Mr Dadwal: No.
Ms Shand: Did you say anything further about the reasons why you’d pleaded guilty?
Mr Dadwal: Yes.
Ms Shand: What were those reasons that you told clients?
Mr Dadwal: I said that I was under considerable pressure and stress at that point.
Ms Shand: At which point are you talking about?
Mr Dadwal: When the offences happened. And I had to plead guilty because of my other commercial case. I had to choose which one I would support. Because I could handle only one.
Ms Shand: So were you suggesting to clients that the reason you’d pleaded guilty was not because you considered yourself guilty, but it was a commercial decision? Is that correct?
Mr Dadwal: Yes it is.
Ms Shand: You certainly didn’t convey to any of these clients that there was any truth behind any of these convictions, did you?
Mr Dadwal: I said there was partial truth but not all of it.
Ms Shand: So which partial truth did you inform your clients of?
Mr Dadwal: Only a few people have asked beyond that, but whoever has, I’ve told them exactly what I said this morning about the first one bumping into someone and the second one. The third one I don’t recall.
Ms Shand: Well you say partial truth, but what you’ve said about the first one is that you bumped into her?
Mr Dadwal: Yes.
Ms Shand: Whereas you accept that the actual charge upon which you were convicted was that you grabbed a 12 year old by the shoulder with one hand and you grabbed her bottom by the other hand and squeezed that buttock. That’s not bumping, is it?
Mr Dadwal: That is the charge.
Ms Wilson: (Indistinct) it was a pinch.
Ms Shand: Well I don’t mind if we use the word “pinch” or “grab” or “squeeze”, but you accept that’s not a bump. That’s not what you’ve told your clients, is it?
Mr Dadwal: No.
Ms Shand: So the only fact that you’ve told your clients which is relevant to the charges upon which you were convicted was in relation to the 17 year old, that you touched her bottom, is that correct?
Mr Dadwal: Yes.
Ms Shand: That was only for those clients who specifically asked?
Mr Dadwal: Yes.
Ms Shand: How many would that have been?
Mr Dadwal: It would be about five, six.
Ms Shand: That’s out of a total client base of over 600, is it not?
Mr Dadwal: Yes.
Ms Shand: Can I ask you, please, to go to tab number 3 in the tribunal book, and can you please turn to page 79?
Mr Dadwal: Yes.
Ms Shand: Do you see that is the letter dated 17 June that was sent to the Tax Practitioners Board by your solicitors?
Mr Dadwal: Yes.
Ms Shand: Do you see that it attached the report, a few pages over, of Mr Newton, and that report’s dated 14 June 2016?
Mr Dadwal: Yes.
Ms Shand: And that in fact occurred; that was provided to the Tax Practitioners Board?
Mr Dadwal: Yes.
Ms Shand: On about that date. You’d agree that that document appears, for some reason, to be missing page 3, does it not?
Mr Dadwal: Yes.
Ms Shand: Now you’ve attached a further copy of that report, which is RD3 to your first affidavit, so if I could ask you to pick up that, please. Do you have exhibit number 3 to your first affidavit, which is a full version of that report?
Mr Dadwal: Yes.
Ms Shand: Your evidence yesterday, was it not, that you knew that anything that you told Mr Newton could possibly be conveyed either to the court or to a regulatory body, such as the Tax Practitioners Board, was it not? Was that not your evidence yesterday?
Mr Dadwal: I said I was not as open to him. Yes that was.
Ms Shand: You were aware that something you told him could be conveyed to either a regulatory body or court?
Mr Dadwal: Yes.
Ms Shand: That was why I’d asked you to review those overnight, is it not?
Mr Dadwal: Yes.
Ms Shand: And this morning we confirmed that there were two matters that you were aware of in here that was incorrect, is that true?
Mr Dadwal: Yes.
Ms Shand: Can I ask you, please, to go to paragraph 9 of that report, which is on page 2. You have that?
Mr Dadwal: Yes.
Ms Shand: It says there that:
Mr Dadwal told me that he communicated with all his Moonee Ponds clients individually and disclosed his offending conduct to them. He said that he had done this to ensure that they were continuing to engage him on a fully-informed basis and so that any issues which might arise could be discussed directly.
Ms Shand: Did you make that statement to Mr Newton?
Mr Dadwal: Yes I did.
Ms Shand: Was that a truthful statement?
Mr Dadwal: No.
Ms Shand: You’re aware that that report was provided to the Tax Practitioners Board and that they were likely to rely on that statement, were you not?
Mr Dadwal: Yes.
Ms Shand: In fact they did, did they not? It was referred to in their submissions?
Mr Dadwal: Yes.
Ms Shand: Would you agree that a tax agent who was endeavouring to be frank and disclose important matters to the Tax Practitioners Board would not have done that, or alternatively, having become aware of the fact that it was misleading, have updated the Tax Practitioners Board as to the true facts?
Mr Dadwal: Yes.
As conceded by Mr Dadwal, the Tribunal finds that he made a false statement to Mr Newton with an awareness that his representation would be relayed to the TPB to convey an impression that he had been transparent with all of his clients about what had occurred, when this was not the case. He had in fact only spoken to a small proportion of them and when he did, he sought to downplay the significance of his involvement in what had taken place on 10 March 2015. This reflects poorly on Mr Dadwal’s character, integrity and honesty.
Statement made to the ATO about the late lodgement of the 2015 Activity Statement
At the hearing, Mr Dadwal accepted that incorrect information had been provided by him on the ATO’s portal stating that, “The reason for the late lodgement of Dadwal Investments 2015 Activity Statement was due to the termination of a staff member which disrupted the normal work processes and checks carried out to ensure that all taxation obligations are complied with”. This information was corrected by Mr Dadwal on the ATO portal after the hearing of this application.
Mr Dadwal conceded that this statement was misleading and that he “would take responsibility for it”. Mr Dadwal accepted in cross-examination that he understood why the Board would have some doubts about trusting his honesty.
Late disclosure of his convictions and other matters to the ASIC as a registered SMSF auditor and failure to disclose the temporary cancellation of his auditor’s licence to this Tribunal
Mr Dadwal filed an affidavit with this Tribunal sworn on 5 February 2017 stating:
[5]…Further, on 17th January 2017, I renewed my qualification as an SMSF auditor with ASIC by passing the relevant examination…
However, Mr Dadwal gave evidence at the hearing that he was due to submit an annual declaration to the ASIC as a SMSF Auditor in August 2016 but at the time of the hearing of this application in August 2017, he had not done so. Mr Dadwal gave evidence that he was aware in about January 2017 that he was under legislative requirement to submit his annual declaration within 30 days after the end of his annual renewal period. Mr Dadwal was also aware that submission of the annual declaration would require him to disclose his convictions; whether he had been part of any disciplinary action including CPA Australia or the TPB; or whether he was subject to any criminal or administrative proceedings. He said he had “forgotten” to submit the annual declaration when it was due because he was going through significant stress at that time. He said that the ASIC had contacted him in January or February 2017 and there was an exchange of emails with him about the need for Mr Dadwal to submit this declaration and to re-sit an exam (which he has now done).
The exchange of emails between the ASIC and Mr Dadwal was called for; and in answer to that request Mr Dadwal produced them on the second day of the hearing before this Tribunal. Those documents revealed that the exchange of emails took place between 19 February 2016 and 17 January 2017. The emails revealed that on 19 February 2016 the ASIC cancelled Mr Dadwal’s SMSF auditor’s licence. This was not a matter that Mr Dadwal had disclosed to the Tribunal when he gave evidence on the first day of the hearing when questioned about this, as outlined in the further detail below (or for that matter at any other time to the TPB or any other professional body). Mr Dadwal did not disclose to the ASIC in this exchange of emails that he had been convicted of three counts of indecent assault or that the TPB had cancelled his registration or that CPA Australia had cancelled his membership. He chose to remain silent about those things. ASIC reissued the licence to Mr Dadwal about a month after it was cancelled.
On the second day of the hearing, Mr Dadwal was questioned about this as follows:
Ms Shand: I suggest that in your evidence yesterday you didn’t actually explain that your registration had been cancelled, did you?
Mr Dadwal: No.
Ms Shand: You just said that you’d been told there were a number of outstanding matters, including that there was an annual declaration, but you never said that your registration had been cancelled, did you?
Mr Dadwal: In fact, they could not get in touch with me, so they sent out a letter saying your registration has been cancelled. I may not have updated my contact details with ASIC. At that point of time, when I got the cancellation letter, I called them and I said they were chasing my CPD hours. And also the annual declaration.
Ms Shand: Well, you didn’t actually answer my question. My question was, you didn’t tell the tribunal yesterday that ASIC had cancelled your registration. I didn’t ask you for an explanation. I asked you whether or not you’d informed the tribunal yesterday about the cancellation of your registration. You didn’t, did you?
Mr Dadwal: No, because it was reinstated right after.
Ms Shand: Well, you’re providing the explanation?
Mr Dadwal: Yes.
Ms Shand: But was that not a relevant fact that you should have brought to the tribunal’s attention when you were describing what happened with ASIC? Should you have not?
Mr Dadwal: Yes.
Ms Shand: And it has only come to light because we’ve made two requests for the relevant correspondence, has it not?
Mr Dadwal: Yes.
Ms Shand: Now, in response to that letter, you’ve sent an email back on 22 December 2016, and there you say:
As discussed, please find attached confirmation that I had completed courses and various workshops over a period of time before and after the SMSF auditor registration. Since I applied for my registration on the basis of my experience and exam component, I had completed most of these courses just prior to my registration being finalised. Also I have kept undertaking SMSF audit workshops even after registration. Please acknowledge and confirm if this is sufficient information.
Ms Shand: That’s what you wrote to ASIC, did you?
Mr Dadwal: Yes.
Ms Shand: Do you accept that it wasn’t a full disclosure to ASIC of the relevant matters that they were needing at that point in time? Is that true?
Mr Dadwal: Yes.
Ms Shand: Because, in fact, one of the matters they needed at that point in time, was your annual declaration, did they not?
Mr Dadwal: Yes.
Ms Shand: If you had provided full and frank information to ASIC, you would have also disclosed to them at that point in time that you had been subject to CPA proceedings, and that your name had now been removed from the CPA for a period of four years. Is that true?
Mr Dadwal: Yes.
Ms Shand: You also would have disclosed to them that your tax agent licence had been terminated by the Tax Practitioner’s Board, and that you were now appealing that decision, would you not?
Mr Dadwal: Yes.
Ms Shand: You didn’t disclose those matters, did you?
Mr Dadwal: No.
Ms Shand: ASIC plays a very important role in regulating SMSF auditors, do they not?
Mr Dadwal: Yes.
Ms Shand: If you took your obligations seriously, you would have informed them of those matters, would you not?
Mr Dadwal: Yes.
Ms Shand: And instead what you’ve done is you’ve told them the positive factors but you haven’t told them the relevant negative factors, have you? And do you agree that someone reading your response there now would have concerns about the seriousness upon which you place your integrity in dealing with regulators such as ASIC?
Mr Dadwal: Yes.
At the conclusion of the hearing, Mr Dadwal also produced a letter he had received from ASIC dated 2 August 2017.[69] In this letter, the ASIC reminded Mr Dadwal that when it reinstated his registration on 18 January 2017, it had bought to Mr Dadwal’s attention the fact that he had not lodged his annual statement. The ASIC informed Mr Dadwal that upon reinstatement of his registration he must lodge the annual statement and pay the requisite lodgement fees and that if he did not do so; it would consider cancelling his registration. The August 2017 letter from ASIC notified Mr Dadwal that due to his failure to lodge his annual statement, which was due in September 2016, the ASIC was considering whether to cancel his registration and invited Mr Dadwal to make submissions about that and to lodge his outstanding statement. On 16 August 2017, Mr Dadwal wrote to the Tribunal to advise that he had lodged the annual statement.
[69] Refer Exhibit “A9”.
The evidence outlined in paragraphs [117] to [121] reflects poorly on Mr Dadwal’s character and his degree of candour and integrity when dealing with a government regulator about matters that had the potential to adversely affect his personal interests or cause embarrassment to Mr Dadwal, if they were duly disclosed.
False and misleading statements to CPA Australia
During the disciplinary hearing conducted under the rules of CPA Australia, Mr Dadwal told the Disciplinary Tribunal that he had worked late on the night he committed the offence – see paragraph [41] of these Reasons for Decision. However, Mr Dadwal accepted at the hearing of this application that he had told the Police that he had finished work at about 4.30pm. Mr Dadwal also accepted that his recollection at the time he had the Police interview was most likely to be correct.
Based on my finding that Mr Dadwal finished work at about 4.30pm on the night to the incidents, I am satisfied that Mr Dadwal’s made a false statement to the Disciplinary Tribunal in an attempt to give a misleading impression that he had worked late on the day he committed the offences to bolster his submission that he was very busy and stressed on that day.
Mr Dadwal also told the Disciplinary Tribunal that he only remembered “one event bumping someone” on the night of 10 March 2015. I find that by doing so, Mr Dadwal displayed an intention to downplay the significance of his conduct and further, he sought to deny any criminal intention behind his actions. Given my finding that Mr Dadwal engaged in the conduct outlined in paragraph [62], which to varying degrees and at varying times Mr Dadwal has made admissions about, including his guilty plea to the Magistrates’ Court, I find that Mr Dadwal’s statement to CPA Australia’s Disciplinary Tribunal as set out above was false and intended by him to mislead the Tribunal as to the extent and seriousness of the conduct engaged in by Mr Dadwal on 10 March 2015.
Mr Dadwal also made a statement to CPA Australia during the disciplinary hearing on 9 August 2016 that “everyone” including his clients and employees knew about his convictions and “there has been no negative impact as such”.[70] However, the evidence revealed that only a small proportion of Mr Dadwal’s clients knew about and had spoken to him about his convictions.
[70] Refer paragraph [15] of T-Document ST17/297.
Further, Mr Dadwal gave the following evidence at the hearing before this Tribunal in relation to whether all of his staff knew about his convictions:
Ms Shand: Is it true that in your affidavit that you filed in this proceeding, there were three employees at the Mordialloc practice who haven’t been informed of the charges or your convictions, is that correct?
Mr Dadwal: Yes it is.
Ms Shand: The receptionist and the two overseas students?
Mr Dadwal: Yes.
Ms Shand: So you’d accept, then, that this statement that you have made to the CPA was not correct, was it? Not everyone knew at the Mordialloc practice?
Mr Dadwal: Those two employees were not employees at that point of time. I think they were still interns back then.
Ms Shand: Well this was August 2016. Are you sure about that?
Mr Dadwal: Not a hundred per cent sure.
Ms Shand: Can I ask you to look at paragraph 13. Perhaps if you can just keep that page open and separately take your affidavit and go to paragraph 13 of your first affidavit?
Mr Dadwal: Yes.
Ms Shand: You have that?
Mr Dadwal: Yes.
Ms Shand: You’ll see there you refer to, at 13D, you refer to Jaqueline Morrow as the receptionist?
Mr Dadwal: Yes.
Ms Shand: She started in October 2015?
Mr Dadwal: Yes.
Ms Shand: Was she one of your employees in August 2016?
Mr Dadwal: Yes.
Ms Shand: She had not been informed, had she?
Mr Dadwal: No.
Ms Shand: Likewise Kermang Yung, paragraph (e), you said she started in August 2015?
Mr Dadwal: Yes.
Ms Shand: And she was now working part time?
Ms Dadwal: Yes.
Ms Shand: And Benson, he started in August 2015?
Mr Dadwal: Yes.
Ms Shand: So I’ll ask you again. In light of your evidence, is it true that the statement that you made to the CPA that everyone knows, was incorrect?
Mr Dadwal: Yes.
Ms Shand: That was a statement that you knew that the CPA would rely on in deciding what was going to be the outcome of this proceeding, were they not?
Mr Dadwal: Yes.
Ms Shand: You’ll agree this was a very serious matter?
Mr Dadwal: Yes.
The evidence outlined in paragraphs [123] to [127] reflects poorly on Mr Dadwal’s character and his level of honesty when dealing with a professional body about matters that had the potential to adversely affect his personal interests or to cause embarrassment to Mr Dadwal, if the truth were told.
Misleading statements made to this Tribunal
In his affidavit sworn on 18 November 2016, Mr Dadwal stated that he had pleaded guilty to the three offences after seeing the psychologist for the first time.[71] As the hearing before this Tribunal progressed, Mr Dadwal produced two letters of legal advice that he had received from two different barristers dated 19 and 23 November 2015 advising him that the case against him was overwhelming and he was unlikely to be acquitted.[72] His guilty plea was entered immediately thereafter. The Tribunal finds that the reason Mr Dadwal pleaded guilty was on account of the legal advice he had received prior to going to the Magistrates’ Court. Accordingly, I consider Mr Dadwal’s statement in his affidavit was misleading to the Tribunal, seeking to create an impression that he had accepted and taken responsibility for his actions.
[71] Refer paragraph [25].
[72] Refer Exhibits “A4” and “A5”.
In Mr Dadwal’s affidavit material filed in preparation for the hearing of this application, Mr Dadwal did not disclose that in August 2016 the CPA Australia Disciplinary Tribunal had found that he had breached the fit and proper person requirement in the Constitution of CPA Australia and forfeited his membership for a period of four years.
Mr Dadwal did not disclose to the TPB when he submitted his company tax agent annual declaration on 30 June 2016 as a director of Ralph Mare & Co, that by that time CPA Australia had commenced an investigation in relation to those alleged breaches of the Constitution. CPA Australia first notified Mr Dadwal’s lawyers about the investigation two weeks earlier on 17 June 2016.
Mr Dadwal included a reference to CPA Australia in his first affidavit sworn in November 2016 stating that he had completed his CPA program in 2010. He did not disclose that by that time, Mr Dadwal’s membership with CPA Australia had been forfeited.
Mr Dadwal gave the following evidence at the hearing:
Ms Shand: And it’s true to say that as at 30 June 2016 you had not disclosed the fact that you were subject to disciplinary action by the CPA to the TPB, had you?
Mr Dadwal: Yes.
Ms Shand: And as far as you were aware, they’d have no reason to be aware of that fact, would they?
Mr Dadwal: They’re both related to the same offence.
Ms Shand: Sorry, can you answer my question? My question was as far as you were aware, there was nothing - that the TPB would have no reason to have been aware that you were subject to disciplinary action, would they?
Mr Dadwal: No.
Ms Shand: You certainly hadn’t disclosed that fact to them?
Mr Dadwal: No.
Ms Shand: And you didn’t disclose that fact here, did you?
Mr Dadwal: No.
Ms Shand: Now, is it true that in your affidavit that you file in this proceeding you’d explained the reason why you hadn’t earlier disclosed the convictions was because you understood this disclosure about good fame, integrity and character was really only concerned with disciplinary action of a professional association and not with criminal convictions of a sex offence, is that right?
Mr Dadwal: Yes.
Ms Shand: So how do you explain why you haven’t disclosed here that you were subject to disciplinary action by a professional body?
Mr Dadwal: Because both were caused by the same issue.
Ms Shand: Well, does the question here say don’t disclose something if it relates to the same underlying facts, does it say that?
Mr Dadwal: No.
Ms Shand: Did you really consider that as a good reason not to include it or was that something you were making up after the fact?
Mr Dadwal: No, I’m not making up anything. I should’ve disclosed it. I do understand that now.
Ms Shand: Can you go over the page please and it’s the same exhibit but it is a second annual declaration also dated 30 June 2016?
Mr Dadwal: Yes.
Ms Shand: And this time it’s for SGR Capital?
Mr Dadwal: Yes.
Ms Shand: And I take it that you had cause to make this annual declaration on or about 30 June 2016?
Mr Dadwal: Yes.
Ms Shand: And if you look over the page we have the same issue there, do we not?
Mr Dadwal: Yes.
Ms Shand: And I take it that you’d say now that in retrospect you should have, but did not disclose the fact that you were subject to disciplinary action by the CPA?
Mr Dadwal: Yes.
Ms Shand: And is it true that at no point as part of the investigation or, indeed, as part of this proceeding have you ever disclosed the fact that you were subject to disciplinary action by the CPA to the Tax Practitioners Board?
Mr Dadwal: No, I haven’t.
Ms Shand: Well, it’s not disclosed in any of your three affidavits?
Mr Dadwal: No.
Ms Shand: And it wasn’t disclosed in any of the documents provided by your lawyers to the Board, was it?
Mr Dadwal: No.
Ms Shand: And is it not correct that if it was not for the fact that the Board last week subpoenaed the CPA that the tribunal also would not have been aware of this fact?
Mr Dadwal: Yes.
Ms Shand: And would you agree that if it were not for the Board having summonsed the CPA last week and obtaining these documents that the tribunal would not have had before it the full facts in relation to your relationships with relevant professional bodies, is that correct?
Mr Dadwal: Yes.
Ms Shand: And it also wouldn’t have the full facts about whether or not you provide truthful evidence to the Board, would it not?
Mr Dadwal: Yes.
Ms Shand: And so from that can the tribunal infer that you don’t take seriously your duties of frankness and candour to the Board?
Mr Dadwal: I do take my duties seriously now.
Member: Is there a limit to that though, Mr Dadwal, when it threatens the security of your ability to be able to generate an income from your professional occupation? So if there’s a threat to being able to provide for your family?
Mr Dadwal: Yes, at sometimes, yes.
Ms Shand: Because I take it at that point in time when you did those declarations you were aware that you should’ve disclosed those items but chose not to?
Mr Dadwal: Yes, I do now.
Based on Mr Dadwal’s evidence, I find that he failed to disclose the existence of the investigation and findings of the CPA Australia disciplinary hearing to both the TPB and this Tribunal, and that this reflects poorly on Mr Dadwal’s level of candour and integrity.
Character references
The Tribunal has closely considered the affidavit by Mr Dadwal’s wife, Ms Pallavi Thakur, sworn on 22 November 2016, and the evidence she gave at the hearing.[73] Ms Thakur stated that Mr Dadwal had always been respectful toward her and all other women and that she had continued to support him. At the hearing, Mr Thakur stated that she did not attend Court for the hearings of the criminal proceeding but Mr Dadwal had told her what had happened. When asked at the hearing whether Mr Dadwal had ever explained to her what had happened at the supermarket, Ms Thakur said that he told her it was an accident and the “trolley was hit”.
[73] Refer Exhibit “A12”.
Ms Thakur was asked how Mr Dadwal had been on the trip to India and whether he was stressed, to which she said he was not and that they had a relaxing time. Ms Thakur was asked whether Mr Dadwal had ever been involved with a matter where allegations had been made about him making inappropriate contact with women without their consent, to which she said he had not and that Mr Dadwal was “always, and still is, a good man”.
A number of other affidavits were filed in support of the proposition that Mr Dadwal was a person of good character, including:
(a)Affidavit of Ms Jade-Valerie Jumaye, an accountant and tax agent, employed in Mr Dadwal’s business.[74] Ms Jamaye stated that she was aware of the charges and circumstances against Mr Dadwal and was taken aback by the allegations as they did not align with the person that she knew him to be. Ms Jamaye said that Mr Dadwal has been a polite, hardworking and respectful person and that he was a good leader and motivated the people around him to excel;
(b)Affidavit of Margaret Haggart, business and finance manager, a former employee at Aperio until July 2015.[75] Ms Haggart stated that she has known Mr Dadwal since 2009 and that they had become friends while he was working at Aperio. She stated that she had maintained contact with Mr Dadwal and that he had displayed great wisdom for a young man. She stated that he had impressed her with his integrity and honesty. She stated that he has always been very respectful and polite to staff and to clients and that his body language was positive and in no way threatening. She stated that he maintained excellent professional relationships and was dependable and honest. She confirmed she was aware of the convictions against Mr Dadwal and that they seemed completely out of character to her. She stated that her son, Chris Haggart, was a referral partner for Mr Dadwal;
(c)Affidavit of Chris Haggart, a financial planner, who shares a number of clients with Mr Dadwal.[76] Mr Haggart stated that he has a close relationship with Mr Dadwal and is aware of the charges against him. He stated that Mr Dadwal had been courteous and kind to all those around him and was always acting in his client’s best interests. Mr Haggart stated that Mr Dadwal was an ethical, professional and hard working person;
(d)Affidavit of Spiro Politis, solicitor and referral partner of Mr Dadwal.[77] He stated he was present in the Magistrates’ Court when Mr Dadwal pled guilty to the charge. Mr Politis said that Mr Dadwal “was extremely upset at himself for his behaviour and concerned about the impact on the minor victim. He has explained to me the circumstances surrounding the charge as well as the pressures he has been under, but had never sought to minimise his offending” and that he had expressed to Mr Politis “several times how regretful he is about his actions and the impact on his reputation, but is keen to prove to himself and others that he can rebuild peoples’ trust in him”.[78] Mr Politis stated he has met with mutual clients with Mr Dadwal on a weekly basis and he had observed Mr Dadwal being cautious by nature, professional in his interactions with clients, and respectful of Australian laws;
(e)Affidavit of Michael Cilia, contract cleaner of Mr Dadwal’s office, client and personal friend.[79] Mr Cilia said he had found Mr Dadwal to be a honest, sincere and trustworthy person and was a shy sort of person who was always courteous to others. He stated, “I write this letter from my heart. We at some time in our lives make some bad choices and then reflect and think why did I do this and pray for a chance to redeem oneself…”;
(f)Affidavit of Grant Hope, business coach who has known Mr Dadwal for seven years and worked alongside him.[80] Mr Hope stated that Mr Dadwal’s values and ethical standards had not changed and that he treated everyone with great dignity and respect. He said that Mr Dadwal’s staff, clients and referral partners had followed him from his previous workplaces to wherever he is to work with him, and that this said a great deal about his personality and character;
(g)Affidavit of John Stellas, tax agent, who has known Mr Dadwal personally and professionally for approximately four years.[81] Mr Stellas stated that he has always known Mr Dadwal to be an ethical, gentlemanly, polite and responsible individual;
(h)Affidavit of Dimitrious Grigoropoulos, mortgage broker and close friend.[82] Mr Grigoropoulos stated that he had always found Mr Dadwal to be a dedicated and hard-working individual and who approached work from a very high ethical standard. He said he was shocked by the allegations that had been made against Mr Dadwal and stated that Mr Dadwal had been very transparent and up front regarding the circumstances to clients, referral partners and employees and it was a testament to his character that he continued to receive support from those around him.
[74] Refer Exhibit “A13” – affidavit was sworn on 3 February 2017 exhibiting a letter by Ms Jumaye dated 18 November 2016.
[75] Refer Exhibit “A14”.
[76] Refer Exhibit “A16”.
[77] Refer Exhibit “A15”.
[78] Refer Exhibit SP-1 of the Affidavit of Mr Politis.
[79] Refer Exhibit “A17”.
[80] Refer Exhibit “A18”.
[81] Refer Exhibit “A19”.
[82] Refer Exhibit “A20”.
CONCLUSION
The High Court of Australia in A Solicitor held that it was the correct approach for the Court of Appeal to have had regard to the combined significance of the misconduct of the solicitor and the subsequent breach of candour by the solicitor towards the Law Society.[83] Accordingly, the Tribunal has considered the combined significance of the findings (as set out in these Reasons for Decision), it has made in relation to:
[83] Refer paragraph [35].
(a)Mr Dadwal’s conduct at the supermarket on 10 March 2015 and the resulting convictions;
(b)Mr Dadwal being placed on the Register of Sex Offenders for a period of 15 years;
(c)Mr Dadwal’s attitude to those matters, specifically, his reluctance to accept that he engaged in the offending behaviours, the significance of those behaviours, and that he has not conveyed a satisfactory degree of contrition for the offences or insight into the impact of his crimes on the complainants;
(d)the risk of recidivism as assessed by the psychologists, and in particular that the psychologists were not prepared to downgrade that risk despite Mr Dadwal receiving extensive counselling before and after the criminal proceedings;
(e)non-disclosure by Mr Dadwal of the convictions to the TPB including when specifically prompted to do so in the April 2016 annual declaration;
(f)misleading statements made to the TPB and The Tax Institute about the significance of criminal proceedings;
(g)false statement made to Mr Newton and in turn, conveyed to the TPB about communications with his clients about the convictions;
(h)misleading statement to the ATO about the late lodgement of the 2015 Activity Statement;
(i)late disclosure of his convictions and other matters to the ASIC as a registered SMSF auditor and his failure to disclose the temporary cancellation of his auditor’s licence to this Tribunal;
(j)false and misleading statements to CPA Australia about what happened on 10 March 2015, the time that he had finished work that day and what he had told his staff about the convictions; and
(k)misleading statements made to this Tribunal about what happened on 10 March 2015, the reasons why he had pleaded guilty to the charges and his failure to disclose that his membership with CPA Australia had been forfeited.
The Tribunal has also taken into account the various positive character references attesting to the good character of Mr Dadwal provided by his family, friends and close business associates (referral partners).
The Tribunal is satisfied that Mr Dadwal is not a fit and proper person under 20-5(1)(a) of the TASA, in conjunction with s 20-15. The conduct referred to in paragraph [138] as detailed in these Reasons for Decision demonstrates that Mr Dadwal lacks “good fame, integrity and character” in the context of a person acting as a registered tax agent. The conduct comprising his non-disclosures and the making of false and misleading statements to various bodies and to this Tribunal, after the criminal offending also demonstrates that Mr Dadwal is presently an individual who lacks candour and is prepared to and has acted dishonestly in order to serve his own interests and to avoid embarrassment. This casts considerable doubt on whether Mr Dadwal may be trusted to act honestly and with candour to the ATO in his role as a tax agent, acting as the gatekeeper between the Commissioner of Taxation and Mr Dadwal’s 500 or so clients.
The Tribunal concludes that Mr Dadwal’s convictions and in particular his lack of insight and remorse for his offending behaviour or even acceptance (depending on who or what entity he is dealing with at the time), that he engaged in the conduct he did on 10 March 2015, shows a disregard for the criminal legal system. If Mr Dadwal is permitted to act as a registered tax agent, in his day to day role he will be required to observe a complex and extensive set of laws relating to taxation. The Tribunal is not satisfied that Mr Dadwal pays sufficient respect to the force of law to be confident that he will observe the applicable laws regarding taxation matters, at times when it does not suit either him or his clients to do so.
For these reasons, the Tribunal concludes that it was the preferable decision of TPB to find that Mr Dadwal was not a fit and proper person and to exercise its discretion to terminate his registration under the TASA. The Tribunal also considers that it was the preferable decision to exercise its discretion to order that Mr Dadwal not apply for registration as a tax agent under the TASA for a period of two years after the effective date of termination of his registration. While I have considered all of the matters referred to in paragraph [138] in reaching this conclusion, I would have reached the same result (including in relation to the period before which Mr Dadwal is permitted to apply for registration as a tax agent), based upon a consideration of the conduct referred to in subparagraphs (a) to (d) of paragraph [138] taken together or based upon a consideration of the conduct referred to in subparagraphs (a) to (e) of paragraph [138] taken together.
Mr Dadwal has contended that should the Tribunal affirm the decision to terminate his registration, that a lesser period of three months should apply before Mr Dadwal is permitted to reapply for registration. The Tribunal does not consider this appropriate. Mr Dadwal has engaged in serious criminal conduct that presents a risk to the reputation of the profession of registered tax agents. Mr Dadwal has not shown a level of insight or conveyed contrition that satisfies either the psychologists who treated and assessed him or satisfies this Tribunal that the risk of Mr Dadwal offending again in times of stress can be ruled out or downgraded to low or negligible. The risk, albeit at the lower end of the scale, remains. This is compounded by the significant pattern of non-disclosure and false and misleading statements that followed by Mr Dadwal in an attempt to cover up and downplay the significance of what he had done.
The Tribunal has considered whether it is appropriate to extend the period within which Mr Dadwal is not permitted to apply for registration as a tax agent to a period of longer than two years, for instance, for three, four or five years. In recognition of:
(a)Mr Dadwal’s criminal offences being an isolated incident;
(b)at the hearing of this Tribunal, Mr Dadwal’s acknowledgement (albeit belated) that his subsequent behaviour of non-disclosures and false and misleading statements was significant and should not have happened;
(c)the positive character references stating that the criminal offending was out of character for the person whom they knew Mr Dadwal to be; and
(d)Mr Dadwal’s participation and completion of the SOATS program;
the Tribunal is satisfied that a period longer than two years is not appropriate. Mr Dadwal should be permitted to apply for registration as a tax agent in two years from the date that the termination of his registration takes effect. By that time, particularly if Mr Dadwal has not reoffended in the intervening period and has refrained from further non-disclosures or making false and misleading statements to relevant regulators and professional bodies, he will have the opportunity to seek to demonstrate to the TPB that he meets the fit and proper person (and other) requirements under the TASA, to be considered for registration as a tax agent.
The Tribunal affirms the decision under review. The effect of this decision is that Mr Ranjit Dadwal’s registration as a tax agent under the Tax Agent Services Act 2009 (Cth) (TASA) will terminate. The Tribunal considers it appropriate, as did the TPB, to provide five weeks’ notice before this termination takes effect. Accordingly, the termination of Mr Dadwal’s registration as a tax agent under the TASA will take effect on 18 September 2018 and he may not apply for registration as a tax agent under the TASA until on or after 18 September 2020.
I certify that the preceding one hundred and forty five (145) paragraphs are a true copy of the reasons for decision of Member K Parker
[sgd]………………………………………
Associate
Dated: 14 August 2018
Counsel for the Applicant: Ms Anna Wilson
Solicitors for the Applicant: Stary Norton Halphen
Counsel for the Respondent: Ms Fleur Shand
Solicitors for the Respondent: Carolyn Maher, Legal Officer, TPB
Date of the hearing: 1 and 2 August 2017
Date final closing submissions received: 15 September 2017
- AGLC
- Dadwal and Tax Practitioners Board [2018] AATA 2878
- Case
- [2018] AATA 2878
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the Tribunal was whether Mr Dadwal met the "fit and proper person" requirements for registration as a tax agent under the Tax Agents Services Act 2009 (Cth). This required the Tribunal to consider the nature of his criminal misconduct, the fact that it occurred outside his professional context, his assessed risk of reoffending, his contrition, and crucially, his subsequent non-disclosure of his convictions and provision of false and misleading statements to statutory and professional bodies.
The Tribunal reasoned that while Mr Dadwal's offending behaviour was an isolated event and he was assessed as a low to moderate risk of reoffending, his lack of honesty, candour, and integrity in his dealings with regulatory bodies was a significant factor. The Tribunal found that these subsequent actions demonstrated a fundamental lack of the trustworthiness essential for a tax agent. Consequently, the Tribunal affirmed the TPB's decision, terminating Mr Dadwal's registration and prohibiting him from reapplying for a period of two years from the date of the decision.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Mr Newton was requested to provide a report in relation to a further assessment of Mr Dadwal undertaken on 10 June 2016.[39] Mr Newton stated that he assessed Mr Dadwal’s risk of recidivism as unchanged (i.e. he posed a low to moderate risk) based on a consideration of the nature of his offending and because the risk factors and the protective factors extant in Mr Dadwal’s case remained unchanged. He confirmed that the level of risk should trend to the low-risk range over the medium term. [39] Refer report dated 14 June 2016 at T-Documents T3/83.TPB terminated Mr Dadwal’s registration as a tax agent in July 2016 On 16 March 2016, the TPB was first notified about the convictions entered against Mr Dadwal by Mr Gulabovski.[40] Prior to this time Mr Dadwal had not provided any notice to the TPB about the incidents on 10 March 2015 or the resulting convictions entered on 2 March 2016. [40] Refer T-Documents T3/32-33. On 20 July 2016, the TPB gave notice to Mr Dadwal that on 7 July 2016 it made a decision to terminate his registration as a tax agent under the TASA, and that his registration would cease on 24 August 2016.[41] This equates to the provision of five weeks’ notice to Mr Dadwal before the termination took effect. Mr Dadwal was advised that he was not permitted to apply for registration as a tax agent for a period of two years from the date the termination of his registration took effect. [41] Refer T-Documents T1/7-10.CPA Australia disciplinary hearing in August 2016 On 9 August 2016, Mr Dadwal appeared before CPA Australia’s Disciplinary Tribunal.[42] At the hearing, Mr Dadwal admitted to the following:[43]…on 10 March 2015 at 7.23pm at the Coles Supermarket during normal commercial trading hours Mr Dadwal indecently assaulted three separate complainants by touching them on the outside of their clothing but in the presence of their guardian or other persons in the aisle area of that supermarket.[42] Refer T-Documents ST17.[43] Refer T-Documents ST17/301. When Mr Dadwal was invited at the Disciplinary Tribunal hearing to elaborate on what had happened, Mr Dadwal gave the following account:[44]Mr Dadwal: Yes, it was just a bump in the veggie section of the market and I can talk about the events surrounding it because I worked really late, it was 7.30 or close to 7.45 and I was just driving back home the day and I had a call from my wife and, you know, I have it, I can produce a copy of that call for the same day and she said there were a few things that you need to bring from the supermarket because we have a young family, so I went to buy that and I was just in a hurry and bumped into someone and I got back home, I don’t remember most of it, and I simply went there, it was a matter of 23 or 24 minutes, it might be in there, and I got home and I found out three days later that I was charged.[CPA Australia investigating case manager]: So you’re saying you just bumped - - - Mr Dadwal: That’s all I remember.[case manager]: That’s all you remember?Mr Dadwal: That’s all I remember. I remember one event being bumping someone.[44] Refer T-Documents ST17/302.