Ghazzaoui and Tax Practitioners Board

[2016] AATA 839

Ghazzaoui and Tax Practitioners Board [2016] AATA 839 (24 October 2016)

Division	TAXATION & COMMERCIAL DIVISION
File Number(s)	2015/5613
Re	Samir Ghazzaoui
APPLICANT
And	Tax Practitioners Board
RESPONDENT

DECISION

Tribunal	Mr P W Taylor SC, Senior Member
Date	24 October 2016
Date of written reasons	25 October 2016
Place	Sydney

Mr Ghazzaoui’s 27 October 2015 application is dismissed, under s 42A(2) of the Administrative Appeals Tribunal Act 1975, without proceeding to review the Board’s decision.

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Mr P W Taylor SC, Senior Member

CATCHWORDS

PRACTICE AND PROCEDURE – applicant’s tax agent registration terminated – applicant prevented from applying for further registration for five years – applicant failed to appear at the hearing

LEGISLATION

Administrative Appeals Tribunal Act 1975 s 42A(2)

Tax Agent Services Act 2009 s 40-25(1)

REASONS FOR DECISION

Mr P W Taylor SC, Senior Member

25 October 2016

1. Mr Ghazzaoui’s 27 October 2015 application sought review of the Tax Practitioners Board’s October 2015 decision to terminate his registration as a tax agent.  As part of its decision the Board made a further determination (under s 40-25(1) of the Tax Agent Services Act 2009 (“TASA”)) preventing Mr Ghazzaoui from applying for further registration for a period of five years.

2. Mr Ghazzaoui’s application for review challenged the Board’s decision only in relation to the determination that he not reapply within five years.  His contention, which he elaborated on in a brief submission he provided to the Tribunal in May 2016, was that a significantly lesser limitation period should have been imposed.  The substance of his reasoning for supporting a shorter limitation period was twofold - (i) that, in relation to the numerous irregularities in tax returns which he had prepared, no responsibility had been given to the clients themselves, and (ii) in relation to particular irregularities in some tax returns (relating to dependent carer allowance claims) his substantive deficiency was in failing to keep abreast of recent changes in the tax legislation.

3. The substantive grounds for the Board’s original decision derived from a 2 June 2015 referral from the Australian Taxation Office, or more correctly the Commissioner of Taxation.  The Commissioner’s original referral expressed concern over a large number of client matters (apparently totalling something in the order of 200 returns) typified by incorrect claims in relation to deductions for (a) dependent offset, (b) work expenses, and (c) business losses.  It is sufficient for present purposes to note that, at least in some instances, the individual taxpayers appeared subsequently to have denied having any factual basis for the various deductions and offsets claimed in the tax returns Mr Ghazzaoui had prepared.

4. Subsequently, in March 2016 the Commissioner provided further information to the Board, principally in relation to the extent and quality of client tax returns that Mr Ghazzaoui had prepared and lodged in each of the tax years ending June 2012, 2013 and 2014.  The Commissioner’s contention was that, as a result of numerous irregularities in these various returns, Mr Ghazzaoui had apparently been responsible for tax shortfalls totalling many millions of dollars.  This additional material, which extended to the analysis of the total number of returns that Mr Ghazzaoui had lodged (and specifically in two periods between July and August 2013 and July and October 2014) indicated an average daily lodgement rate slightly in excess of 80 returns.  Both the Commissioner and the Board’s concerns were that this rate of lodgement was quite inconsistent with any genuine consideration and evaluation of the accuracy of the contents of the returns that had been lodged.

5. Mr Ghazzaoui has not lodged any significant material to support his review application.  In May 2016 he lodged a brief submission.  That submission, in so far as it points to individual client’s responsibility for the accuracy of their returns, does not address the substantive criticisms made by the Board in relation to Mr Ghazzaoui’s own conduct.  In so far as the submission concedes Mr Ghazzaoui’s apparent failure to keep abreast of relevant legislative changes, it does not address the substance of the more significant criticisms made by the Commissioner, and the Board, in relation to other aspects of the inaccuracies in the returns he lodged.

6. In August 2016, in the course of a directions hearing in the present proceedings, I specifically raised with Mr Ghazzaoui the apparent difficulties caused by (i) the conceded inaccuracies in the numerous tax returns, and (ii) the appearance, from the rate of his tax return lodgements, that the inaccuracies could well be regarded as an inevitable consequence of his failure to devote proper care and attention to the preparation of the returns which he lodged.  As a result of having expressed those concerns, and drawn their apparent significance specifically to Mr Ghazzaoui’s attention, I made a direction, dated 17 August 2016, that he was to file and serve any further evidence on which he intended to rely to support his review application by 26 September 2016.  If he did not intend to raise any additional evidence, he was nevertheless directed to inform the Tribunal of that fact by the same date. 

7. Mr Ghazzaoui did not comply with the direction of 17 August 2016.  However, on 18 October 2016 he sent the Tribunal an email confirming that he was ready to proceed with the hearing, would be representing himself, would not call any witnesses and had no further documents to file.  His only subsequent communication with the Tribunal appears to have been an email he sent at 11:55 pm on 23 October 2016.  In that email he said he would not be able to attend the hearing “but you may proceed without me”.  These two emails indicate that Mr Ghazzaoui was well aware that the substantive hearing of his review application had been listed for 24 and 25 October 2016.  Nevertheless, and consistent with his second email, Mr Ghazzaoui did not appear at 10 am on 24 October 2016, when I convened the Tribunal to proceed with the review hearing.

8. The substance of the matters raised in the Commissioner’s referral, and relied on by the Board - both in its original decision and in the documents and submissions it has subsequently lodged - are inherently likely to require an assessment not only of Mr Ghazzaoui’s competence and diligence, but also his honesty, in the performance of his work as a tax agent.  Those matters, and most especially the latter, could not properly be investigated, and made the subject of fully informed findings, without Mr Ghazzaoui’s personal appearance at, and involvement in, the review proceedings.  Correspondingly, it is not desirable that the Tribunal should proceed to make any findings on such matters, particularly matters involving Mr Ghazzaoui’s apparent honesty, on any basis other than after a hearing that involved all relevant information being provided, and evaluated in an informed and objective manner.

9. The situation is thus one in which Mr Ghazzaoui has failed to participate in any meaningful fashion in the preparation of the proceedings for review by the Tribunal. He has failed to attend at the commencement of the hearing on 24 October 2016, and he has indicated he wishes to take no active part in the proceedings. In those circumstances the Tribunal has a discretion - under s 42A(2) of the Administrative Appeals Tribunal Act 1975 - to dismiss the application without proceeding to review the decision.

10. The Board’s position, in the light of Mr Ghazzaoui’s nonappearance at the hearing, was to invite, indeed encourage, the Tribunal to exercise the dismissal discretion under s 42A(2). I am satisfied that, in the absence of Mr Ghazzaoui’s personal appearance at, and active participation in, the review hearing, the Tribunal could not discharge its objective of achieving a fair and just review outcome, and could not reach any properly informed satisfaction about the correct or preferable substantive determination of the review proceedings. Not the least of my apprehensions and reservations in that regard relates to the appearance that serious questions might arise in relation to Mr Ghazzaoui’s honesty. I consider it undesirable that the Tribunal embark upon any investigation and review assessment that carries a material risk of requiring a determination of those questions, in the absence of active participation by Mr Ghazzaoui.

11. For the reasons I have outlined above, I dismiss Mr Ghazzaoui’s 27 October 2015 application without proceeding to review the Board’s decision.

I certify that the preceding 11 (eleven) paragraphs are a true copy of the reasons for the decision herein of Mr P W Taylor SC, Senior Member

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Associate

Dated 25 October 2016

Date(s) of hearing	24 October 2016
Applicant	No appearance
Counsel for the Respondent	G O'Mahoney
Solicitors for the Respondent	T Ayoush, Tax Practitioners Board