Dadwal and Tax Practitioners Board - [2018] AATA 2878

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, 90-1
Cases
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 974
Ziems 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…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2018] AATA 2878
Decision Date: 14 August 2018

CaseChat Overview and Summary

The Administrative Appeals Tribunal considered an appeal by Mr Dadwal against a decision by the Tax Practitioners Board (TPB) to terminate his registration as a tax agent. The dispute arose from Mr Dadwal's conviction for three offences of indecent assault, for which he was placed on the Register of Sex Offenders for 15 years. The TPB had terminated his registration and prohibited him from reapplying for two years.

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

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

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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

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.