David Mahaffy and Tax Practitioners Board
[2015] AATA 173
•26 March 2015
[2015] AATA 173
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/5357
Re
David Mahaffy
APPLICANT
And
Tax Practitioners Board
RESPONDENT
DECISION
Tribunal Deputy President J W Constance
Date 26 March 2015 Place Canberra In accordance with subsection 42A(5) of the Administrative Appeals Tribunal Act 1975 (Cth), Mr Mahaffy’s application for review of the decision of the Tax Practitioners Board, dated 11 September 2013, is dismissed.
................................[sgd]........................................
Deputy President J W Constance
Catchwords
PRACTICE AND PROCEDURE – application to dismiss proceedings – failure to comply with direction within reasonable time – application dismissed
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) ss 2A, 42A(5)
Cases
Guse v Comcare (1967) 49 ALD 287
REASONS FOR DECISION
INTRODUCTION
26 March 2015
The Tax Practitioner’s Board rejected Mr Mahaffy's application for renewal as a tax agent in a decision dated 11 September 2013. The decision was to take effect on 22 October 2013, on which day Mr Mahaffy’s entitlement to practise as a registered tax agent would cease.
Mr Mahaffy applied to the Tribunal to review the Board’s decision on 18 October 2013.
On 21 January 2015, I heard an application by the Board for an order dismissing Mr Mahaffy's application. I reserved my decision on this application as Mr Mahaffy was then prosecuting an appeal to the Federal Court of Australia against an earlier decision I had made in relation to a stay order issued in respect of the application before the Tribunal.
On 24 March 2015, the Tribunal received a copy of the reasons given by the Federal Court for its decision to dismiss Mr Mahaffy’s appeal as being incompetent.
I have decided that Mr Mahaffy's application made 18 October 2013 should be dismissed. I provide my reasons for this decision below.
BACKGROUND
On 18 October 2013, Mr Mahaffy lodged his application to the Tribunal. At the same time he applied for an order staying the operation of the Board’s decision.
An interlocutory hearing was held on 8 January 2014 in order to hear Mr Mahaffy’s application for a stay order. At that hearing, Mr Mahaffy detailed his poor health. He also stated that he would be filing a number of forms for the issue of summons. Despite his health, and after being advised that the summons process would take about a month, Mr Mahaffy informed the Tribunal that it would take a couple of months for him to prepare his case for hearing.
The Tribunal made orders staying the operation of the Board’s decision on 8 January 2014. The effect of the stay was to allow Mr Mahaffy to continue to act for existing clients but to prevent him providing tax agent services to persons to whom he had not provided such services prior to 24 September 2013. The stay was granted on several conditions, including the following:
...
(b) on or before 29 January 2014, Mr Mahaffy files evidence in the form of a statutory declaration that he has given the Tax Practitioners Board (the Board) the names and contact details of each client to whom he has provided tax agent services from 1 June 2011; and
...
(e) that Mr Mahaffy complies in a timely manner with tribunal listings and orders, including any timetable set for the filing of evidence and a Statement of Facts, Issues and Contentions.
The Tribunal also made a number of directions. It was directed, in part, that:
4. on or before 9 AM on 22 January 2014 Mr Mahaffy is to inform the Tribunal and the Respondent of summons he intends to issue and to lodge properly completed documents for this purpose; and
5. a telephone preliminary conference is to be listed on the earliest convenient date after 17 January 2014; and
6. the application is to be progressed to hearing with reasonable expedition and without undue delay.
In accordance with the direction of 8 January 2014, the District Registrar listed a telephone preliminary conference for 22 January 2014. On 15 January 2014, Mr Mahaffy was notified of these directions and the listing of the conference.
On 16 January 2014, Mr Mahaffy telephoned the Tribunal and requested an adjournment of the conference as he had to go to hospital that week. During this telephone conversation, Mr Mahaffy was reminded of the direction requiring him to file certain documents by 22 January 2014. He replied that this would not be happening.
In a further telephone conversation on 20 January 2014, Mr Mahaffy was reminded by Registry staff of condition 1(b) of the stay order, requiring him to file a statutory declaration that he had given the Respondent the names and contact details of each of his clients since June 2011. He stated that he never agreed to this condition, and objected to the Tribunal instructing him on what to do.
In a separate telephone conversation that day, Mr Mahaffy emphasised that he would never comply with the condition. He stated that it did not matter that the condition was imposed by a Tribunal Member, he did not agree to it and would not comply.
On 21 January 2014, the Tribunal made the following directions:
1. the Applicant’s request for an adjournment of the preliminary conference is granted; and
2. the preliminary conference is to be re-listed on the earliest feasible date; and
3. on or before 4 February 2014 the Applicant is to provide medical evidence from his treating doctors of his medical condition and his fitness to attend a telephone preliminary conference.
On the same day the Tribunal notified Mr Mahaffy of a conference by telephone to be held on 10 February 2014.
Mr Mahaffy did not comply with the direction of 21 January 2014. However, on 7 February 2014 he supplied a letter from a Doctor indicating that he was to undergo a medical procedure on 11 February 2014 and that he may be required to stay in hospital. The likely period of hospitalisation was not specified. On the basis of this letter the conference scheduled for 10 February 2014 was vacated.
On 28 February 2014 Mr Mahaffy advised the Tribunal that he was no longer in hospital but that he had to attend a number of medical appointments and would not be available to attend a conference until after 19 March 2014.
A telephone conference was held on 14 April 2014. Mr Mahaffy attended. He was advised by the Conference Registrar that his application was to be prepared for hearing and explained the Tribunal’s procedures when a party fails to comply with a direction of the Tribunal. Mr Mahaffy again advised that he proposed to apply for the issue of a number of summons to witnesses. He had previously advised the Tribunal of this at the interlocutory hearing in January 2014.
On 14 April 2014 the Tribunal made the following directions:
1. On or before 6 May 2014, the Respondent must give to the Tribunal and the Applicant copies of supplementary Section 37 Documents.
2. On or before 10 June 2014, the Applicant must give to the Tribunal and the other party copies of his written submissions together with any supporting evidence.
3. Within 28 days of receiving the written submissions of the Applicant, the Respondent must give to the Tribunal and the Applicant written submissions in reply together with any supporting evidence.
On 8 May 2014 the Tribunal sent to Mr Mahaffy, at his request, blank forms of summons. He had previously been advised in January 2014 that these could be found on the Tribunal’s website.
The matter was listed for a non-compliance directions hearing on 16 May 2014 by reason of the Board’s failure to comply with the direction that it file further section 37 documents by 6 May 2014. As the Board filed its documents prior to the non-compliance hearing, that hearing was vacated.
The Tribunal made the following direction on 16 May 2014:
1. direction # 2 of 14 April 2014 be varied to read:
on or before 30 June 2014, the Applicant must give to the Tribunal and the other party copies of his written submissions together with any supporting evidence.
This direction was made following a directions hearing attended by Mr Mahaffy.
By email of 16 June 2014, the Board advised the Tribunal that Mr Mahaffy had not provided a list of clients in accordance with the Tribunal’s direction of 8 January 2014. This direction required the list to be provided on or before 29 January 2014. The Board sought a revocation of the stay order of 8 January 2015.
By email of the same day, Mr Mahaffy advised that it would be extremely difficult for him to comply with this direction and that he believed that it was inapplicable.
On 19 June 2014, Mr Mahaffy again requested that the Tribunal forward to him the form of summons for the production of documents. This was done.
Mr Mahaffy filed an affidavit on 25 June 2014 pertaining to the condition of the stay order that he provide a statutory declaration that he had given the Board a list of clients. He reiterated in that affidavit that his understanding was that the condition was not applicable.
On 11 July 2014, Mr Mahaffy filed a further affidavit sworn by him on 9 June 2014. In that affidavit he stated that he had misunderstood the effect of the direction that he provide a list of clients for whom he had acted since June 2011. He said that he had compiled an extensive list of such clients.
On 19 June 2014, Mr Mahaffy was advised of a telephone directions hearing listed for 3pm on 27 June 2014.
At the telephone directions hearing, which was attended by Mr Mahaffy, the Tribunal made two separate directions. The first directed that:
condition 1(b) of the stay granted on 8 January 2014 be varied to read:
on or before 11 July 2014, Mr Mahaffy provides to the Tribunal the names and addresses of each client to whom he has provided tax agent services from 1 June 2011.
The second direction directed that:
1. direction # 2 of 14 April 2014 be varied to read:
on or before 11 July 2014 the Applicant must give to the Tribunal and the other party copies of his written submissions together with any supporting evidence.
On the afternoon of 11 July 2014, Mr Mahaffy advised that he hoped to finish his written submissions the following week. On 14 July 2014 (the next working day) an officer of the Tribunal sent him an email requesting he advise the extension of time he sought. Mr Mahaffy telephoned the Tribunal on 16 July and advised that he would write to the Tribunal and advise the extension sought and provide a copy of a medical certificate as to his medical condition.
As the Tribunal had not received any further communication from Mr Mahaffy, an officer of the Tribunal telephoned him on 21 July 2014 and again requested that he advise how much additional time he required. Mr Mahaffy said he would advise the Tribunal of this the following day. The next day Mr Mahaffy advised he would be hospitalised for about two weeks. He did not advise the extension sought nor did he provide a medical certificate.
With the consent of the Board, on 23 July 2014, the Tribunal extended the time in which Mr Mahaffy was to provide written submissions and supporting evidence to 13 August 2014. This was a variation of the direction made by the Tribunal on 14 April 2014. By email of the same date the Tribunal again requested Mr Mahaffy to provide evidence of his hospital admission.
As Mr Mahaffy did not comply with the direction the matter was listed for a non-compliance directions hearing on 22 August 2014.
On 15 August 2014, Mr Mahaffy was again verbally advised that if he could provide some medical evidence of his health issues it would assist the Tribunal in managing his matter. He advised that he would need the following week to prepare his submissions.
By letter of 21 August 2014, the Board applied for an order setting aside the stay order and dismissing Mr Mahaffy's application on the ground that he had persistently failed to comply with the Tribunal’s directions.
At the non-compliance hearing on 22 August 2014, the Tribunal made the following directions:
1. Direction #1 of 23 July 2014 be varied to read:
On or before 5 September 2014 the applicant must give to the Tribunal and other party copies of his written submissions together with any supporting evidence.
2. On or before 5 September 2014 the applicant must give to the Tribunal and the other party copies of medical evidence to demonstrate any illness or medical conditions he has been suffering for the past month and medical evidence to demonstrate the treatment that he is undertaking for the period 25 August to 29 August 2014.
The Tribunal did not deal with the Board’s applications by reason of the short notice given. Mr Mahaffy was informed that the issue raised by the Board would be revisited if he again failed to comply with directions of the Tribunal. Mr Mahaffy stated that he would obtain the necessary medical evidence and that he would file 30 requests for the issue of summons to witnesses within the coming week.
On 5 September 2014, Mr Mahaffy filed written submissions. He advised that he intended to file over 30 summons the following week. He did not file any medical reports or certificates as to his state of health.
By letter of 8 September 2014, the Board applied for its application for dismissal to be listed as soon as possible. A copy of this letter was forwarded to Mr Mahaffy.
By letter of 11 September 2014, the Tribunal advised Mr Mahaffy that his matter had been listed for a Directions Hearing by telephone on 30 September 2014 at 9.00am. In the same letter he was advised:
The purpose of this Directions hearing is to consider the Respondent’s request that the Tribunal dismiss your application pursuant to section 42A (5)(b) of the Administrative Appeals Tribunal Act 1975.
Mr Mahaffy advised that he was unavailable to attend on 30 September 2014 by reason of his being required to attend medical appointments. He was provided with several alternative dates for the matter to be relisted. At the request of Mr Mahaffy the matter was listed for 9.00am on 14 October 2014.
On 2 October 2014, Mr Mahaffy advised the Tribunal by telephone that he was in hospital and could not provide medical evidence that day, but would provide it within the next two days. He was advised that it was important that he provided this evidence.
On 8 October 2014, Mr Mahaffy provided a medical certificate dated 2 October 2014 which informed that:
·Mr Mahaffy had been an inpatient from 28 September 2014 to 2 October 2014;
·he would be unfit for work from 28 September 2014 to 10 November 2014;
·that he needed to stay in Sydney for community nurse care and continuous treatment.
Although the certificate made provision for details of treatment, no details were provided.
The Tribunal vacated the directions hearing listed for 14 October 2014.
By notice of 14 October 2014, Mr Mahaffy was notified that the matter was listed for a directions hearing by telephone on 12 November 2014.
By letter of 10 November 2014, Mr Mahaffy advised the Tribunal that he would not be able to attend the listed directions hearing as he was required to attend hospital every day for treatment. Attached to the letter were copies of various notes from Tamworth Hospital which indicated that Mr Mahaffy was suffering from several medical conditions. The notes did not give details of upcoming medical appointments. Mr Mahaffy also provided a medical certificate that he was unfit for work until 30 December 2014. The Board opposed an adjournment of the directions hearing as its application for the matter to be dismissed had been adjourned on three previous occasions.
Mr Mahaffy did not attend the directions hearing on 12 November 2014. I was not prepared to deal with the Board’s applications in the absence of Mr Mahaffy.
In a telephone conversation on 13 November 2014, my Associate offered Mr Mahaffy the alternative dates of 19 November 2014 and 25 November 2014 to have the Board’s applications relisted. Mr Mahaffy advised that neither date was acceptable as he would be in hospital both days. He declined to provide information as to the times of his hospitalisation.
By email of 13 November 2014, Mr Mahaffy was notified of his matter being listed for 9am on 25 November 2014. On 17 November 2014 he notified the Tribunal that he would not attend that hearing. He was advised on 18 November 2014 that his request for an adjournment had been refused.
By letter of 24 November 2014, Mr Mahaffy advised that he was required to attend Tamworth Hospital on 24 November. He did not provide the time of that appointment. Mr Mahaffy also advised that he proposed to file approximately 40 summons.
At 9am on 25 November 2014, the Tribunal contacted Mr Mahaffy by telephone. He stated that he was being driven to hospital and that he would not participate in the directions hearing. The hearing proceeded in the absence of Mr Mahaffy.
The Board argued that Mr Mahaffy's application should be dismissed by reason of his failure to comply with directions of the Tribunal and his failure to attend the directions hearing. It was put that Mr Mahaffy had demonstrated a capacity to engage with his application when he wished to do so, such as when he engaged in detailed correspondence with the Tribunal and the Board’s representatives. Notwithstanding the strength of the arguments put on behalf of the Board, I refused to determine the application that Mr Mahaffy's application be dismissed.
I made the following directions at the conclusion of the hearing:
1. the order of the Tribunal dated 8 January 2014 which stayed the operation of the reviewable decision is revoked, with such revocation to take effect from and including 1 December 2014;
2. by close of business on 8 December 2014, Mr Mahaffy is to file with the Tribunal any summons to produce documents which he seeks to be issued in this application;
3. by close of business on 16 January 2015, Mr Mahaffy is to file with the Tribunal and serve on the Respondent:
a. a written statement of submissions setting out the grounds on which Mr Mahaffy relies in his application to set aside or vary the reviewable decision;
b. a statement of the evidence to be given by each witness Mr Mahaffy intends to call at the hearing;
c. copies of all reports, records and other documents on which Mr Mahaffy intends to rely at the hearing;
4. should Mr Mahaffy intend not to call any witnesses to give evidence at the hearing, he shall notify the Tribunal and the Respondent of this in writing by close of business on 16 January 2015;
5. should the Mr Mahaffy intend not to rely on any reports, records or other documents at the hearing he shall notify the Tribunal and the Respondent of this in writing by close of business on 16 January 2015;
6. by close of business on 13 February 2015, the Respondent is to file with the Tribunal and serve on Mr Mahaffy:
a. a Statement of Facts, Issues and Contentions;
b. a statement of the evidence to be given by each witness intended to be called at the hearing;
c. copies of all reports, records and other documents on which the Respondent intends to rely at the hearing;
7. should the Respondent intend not to call any witnesses to give evidence at the hearing, the Respondent shall notify the Tribunal and Mr Mahaffy of this in writing by close of business on 13 February 2015;
8. should the Respondent intend not to rely on any reports, records or other documents at the hearing the applicant shall notify the Tribunal and Mr Mahaffy of this in writing by close of business on 13 February 2015;
9. the application shall be listed for a telephone directions hearing at 9am on 21 January 2015 at which the Tribunal shall hear any application for dismissal arising out of any failure to comply with the above directions or previous directions of the Tribunal;
10. should Mr Mahaffy apply for an extension of time with respect to any of the above directions, or for the deferral of the directions hearing on 21 January 2015, he shall provide to the Tribunal a report of a qualified medical practitioner detailing his condition and any treatment which he is required to undertake; such report is to be filed in the Tribunal on or before close of business on 19 January 2015.
On 26 November 2014, Mr Mahaffy requested the variation of the direction so far as it related to the revocation of the stay order. He requested that the date on which the revocation was to take effect be extended. This application was refused.
On 15 December 2014, Mr Mahaffy lodged an appeal in the Federal Court of Australia. He sought an order that:
… the order of the Administrative Appeals Tribunal on 8/1/2014 be not lifted allowing David B Mahaffy to continue operating as a Tax Agent until the end of the hearing of the entire case.
The Grounds relied on included:
If the stay is not stayed [sic] I will not have any clients to go back to at the end of the hearing which may be in 5-6 months.
The Federal Court listed a First Directions Hearing for 9.30am on 3 February 2015.
By email of 20 January 2015, Mr Mahaffy advised the Tribunal that he would comply with the directions of 25 November 2014 before the Federal Court Directions hearing on 3 February 2015. Mr Mahaffy advised also that he was seeking an adjournment of the hearing listed for the following day.
The hearing of the Board’s application that the matter be dismissed proceeded on 21 January 2015. Mr Mahaffy appeared at that hearing by telephone. After hearing from the parties, Mr Mahaffy's application for an adjournment was refused.
At the conclusion of the hearing I reserved my decision.
MR MAHAFFY'S CONTENTIONS
Mr Mahaffy argued that:
·he has provided submissions and responded to every issue raised by the Solicitor for the Board;
·the only matter which requires further attention by him is the issue of the summons to witnesses which he will file;
·he has been ill and is unrepresented;
·he has provided medical certificates and believed certificates had been filed recently.
CONSIDERATION
Subsection 42A(5) of the Administrative Appeals Tribunal Act 1975 provides:
If an applicant for a review of a decision fails within a reasonable time:
(a) to proceed with the application; or
(b) to comply with a direction by the Tribunal in relation to the application;
the Tribunal may dismiss the application without proceeding to review the decision.
Mr Mahaffy was aware of the directions made on 25 November 2014. He received a copy of those directions no later than 26 November 2014 on which date he telephoned a member of the Registry staff concerning those directions. When the application for dismissal was heard on 21 January 2015, Mr Mahaffy had failed to comply with several of the directions.
Mr Mahaffy had not filed any summons to produce documents by 8 December 2014. He continued to state that he intended to do so as late as the hearing on 21 January 2015. On 30 January 2015 (ie. after I heard the application for dismissal) Mr Mahaffy filed 10 forms of summons and requested that they be issued.
Mr Mahaffy did not file a statement of submissions by 16 January 2015 and has not done so since. He did not file statements of evidence or reports by that date, nor did he advise the Tribunal that he did not intend to do so. He has not filed any such documents since that time.
Although Mr Mahaffy applied for an extension of time to comply with the directions and for an adjournment of the hearing on 20 January 2015, he did not file a report from a medical practitioner in accordance with direction 10 made 25 November 2014. This direction was made in view of the limited medical evidence before the Tribunal as to the extent of Mr Mahaffy's incapacity. I note in this regard that Mr Mahaffy was, at the same time, seeking an order in the Federal Court which would effectively allow him to continue to work as a tax agent.
Mr Mahaffy's application for an extension of time was made only after he became non-compliant.
I have taken into account the history of this application and in particular that Mr Mahaffy has been given very considerable time to comply with directions to file requests for summons and to provide submissions setting out the basis for his application. He was first directed to file summons by 22 January 2014 and to file submissions by 10 June 2014.
Despite the passage of a year from the time in which Mr Mahaffy was first directed to lodge summons, these had not been filed by the directions hearing on 21 January 2015. This was despite Mr Mahaffy being made aware on 8 January 2014 that blank forms of summons could be found on the Tribunal’s website, and blank forms being provided to him by Registry staff on at least two occasions in May and June 2014.
Although Mr Mahaffy did file submissions in September 2014, he has not filed evidence supporting the substance of his application, whether that be in the form of witness statements, reports, documents or otherwise. This was despite him first being directed to do so by June 2014.
I am satisfied that by 21 January 2015, when the application to dismiss was heard, Mr Mahaffy had failed within a reasonable time to comply with the directions to which I have referred. I note that, at the time of my decision, he continues to fail to comply with some of the directions.
The power given to the Tribunal by subsection 42A(5) to dismiss an application is discretionary. It is a power which should be used sparingly.
I am satisfied that by delaying the hearing of the application for dismissal until after the period for which Mr Mahaffy was certified as unfit for work, he was given fair opportunity to be heard and afforded natural justice as set out by the Federal Court in Guse v Comcare.[1] I note also that Mr Mahaffy was given appropriate notice that the application for dismissal would be heard on 21 January 2015. The direction of 25 November 2014, as well as the listing notice sent to Mr Mahaffy the following day, both specified that any application for dismissal under section 42A(5) would be heard on that date. I further note that Mr Mahaffy has been on notice of the Respondent’s application for dismissal of the proceedings since at least August 2014.
[1] (1997) 49 ALD 288
Mr Mahaffy submitted that his health was a major impediment to his compliance, and in those circumstances his application should not be dismissed. I am not persuaded by this submission. Mr Mahaffy has consistently demonstrated a capacity to engage with the Tribunal and the Respondent in detailed correspondence. He also indicated at the interlocutory hearing in January 2014 that, whilst suffering a number of conditions, he would be able to prepare his case within a “couple of months”. Significantly also, Mr Mahaffy was non-compliant with the most-recent directions of the Tribunal whilst simultaneously pursuing proceedings in the Federal Court which would allow him to continue to work as a registered tax agent. In such circumstances, I am not satisfied that Mr Mahaffy’s health has prevented him from complying with the directions of this Tribunal within a reasonable time.
Mr Mahaffy has shown a persistent disregard of the directions of this Tribunal. As recently as the directions hearing on 21 January 2015, he indicated that he effectively ignored the most recent directions on account of his proceedings before the Federal Court. The history of the application discloses repeated failures on behalf of Mr Mahaffy to comply with obligations imposed by this Tribunal.
Section 2A of the Administrative Appeals Tribunal Act 1975 (Cth) provides that:
In carrying out its functions, the Tribunal must pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick.
The section imposes a statutory obligation on the Tribunal. It requires fairness to both parties as well as a mechanism of review that is both economical and quick. To allow Mr Mahaffy to continue to disregard, and consistently fail to comply with, directions of this Tribunal would not be fair to the Board. The Tribunal would also fail in its obligation to conduct proceedings in an economical and quick manner.
CONCLUSION
In accordance with subsection 42A(5) of the Administrative Appeals Tribunal Act 1975 (Cth), Mr Mahaffy's application for review of a decision of the Tax
Practitioners Board, lodged in this Tribunal on 18 October 2013, will be dismissed.
I certify that the preceding 73 (seventy-three) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance. ...............................[sgd].........................................
Associate
Dated 26 March 2015
Date(s) of hearing 21 January 2015 Date final submissions received 21 January 2015 Applicant In person Solicitors for the Respondent P Melican; Australian Government Solicitor
Key Legal Topics
Areas of Law
-
Administrative Law
-
Statutory Interpretation
Legal Concepts
-
Judicial Review
-
Procedural Fairness
-
Natural Justice
-
Appeal
-
Jurisdiction
-
Statutory Construction