FEDERAL COURT OF AUSTRALIA
Ham v Tax Practitioners Board [2018] FCA 1652
File number: QUD 606 of 2017 Judge: LOGAN J Date of judgment: 2 November 2018 Catchwords: TAXATION – tax agents – cancellation of registration – fit and proper person – tax agent knowingly concerned over lengthy period in equitable fraud when acting otherwise than as tax agent as account for client – extent to which this is a factor to be taken into account in determining whether person is a fit and proper person – observations upon role of and conduct befitting a tax agent and content of expressions “fit and proper person” and “good fame, integrity and character” – Tax Agent Services Act 2009 (Cth), ss 20-5, 20-15, 20-25, 20-50. Held – appeal dismissed. Legislation: Administrative Appeals Tribunal Act 1975 (Cth) ss 43,44
Income Tax Assessment Act 1936 (Cth) ss 251BC, 251BC(1)
Income Tax Assessment Act 1943 (Cth) s 26
Migration Act 1958 (Cth) s 65
Tax Agent Services Act 2009 (Cth) ss 2-5, 20-1, 20-5(1), 20-5(1)(a), 20-15, 20-15(a), 20-15(b), 20-25, 20-25(1), 20-45, 20-50, 30-10, 60-5, 60-15, 70-10(a)(i), 80-5
Income Tax Assessment Act 1936 (Qld) s 65
Cases cited: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Bankstown Municipal Council v Fripp (1919) 26 CLR 385
Buck v Bavone (1976) 135 CLR 110
Canehire Pty Ltd & Anor v Themis Holdings Pty Ltd [2014] QCA 296
Jacobellis v. Ohio 378 U.S. 184 (1964)
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Minister for Immigration and Border Protection v Eden (2016) 240 FCR 158
Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1
Minister for Immigration and Border Protection v SZVFW (2018) 92 ALJR 713
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611
Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992
ProjectBlue Sky Inc v Australian Broadcasting Authority
Roth v. United States 354 U.S. 476 (1957)
Re: Su v. Tax Agents Board of South Australia (1982) 13 ATR 192
Shell Company of Australia Ltd v Federal Commissioner of Taxation (1930) 44 CLR 530
Stasos v Tax Agents’ Board of New South Wales (1990) 21 ATR 974
Themis Holdings Pty Ltd v Canehire Pty Ltd & Anor [2014] QSC 38
Toohey v Tax Agents’ Board of Victoria (No 3) (2010) 78 ATR 905
Ziems v Prothonotary of Supreme Court of New South Wales (1957) 97 CLR 279
Date of hearing: 23 April 2018 Date of last submissions: 23 April 2018 Registry: Queensland Division: General Division National Practice Area: Taxation Category: Catchwords Number of paragraphs: 60 Counsel for the Applicant: Mr D A Savage QC with Mr C D Coulsen Solicitor for the Applicant: QBM Lawyers Counsel for the Respondent: Mr M McKechnie Solicitor for the Respondent: Australian Government Solicitor
Table of Corrections 6 November 2018 In paragraph 15, the word “to” is added before “detail”.
6 November 2018 In paragraph 52, the word “none” is changed to…
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- Case
- [2018] FCA 1652
- Decision Date
CaseChat Overview and Summary
The court examined the relevant provisions of the Tax Agent Services Act 2009, specifically sections 20-5, 20-15, 20-25, and 20-50, which outline the circumstances under which a tax agent's registration may be affected or cancelled. Mr Ham argued that the Board's decision should only consider events "mainly relating to criminal convictions and bankruptcy" as per section 20-1 of the Act. However, the court found that the Board's interpretation of the term "fit and proper person" was consistent with the legislative intent to ensure professional and ethical conduct among tax agents. The court further held that the Board was entitled to consider relevant conduct outside the scope of Mr Ham's role as a tax agent when assessing his overall suitability for registration. The court rejected Mr Ham's appeal, affirming the Board's decision.
The Federal Court dismissed Mr Ham's appeal and ordered that he pay the Board's costs of and incidental to the appeal, to be taxed if not agreed. This decision underscores the Board's authority to consider a tax agent's broader conduct when determining their fitness to hold a registration, beyond merely criminal convictions and bankruptcy. The judgment reinforces the importance of maintaining high professional standards and ethical conduct among tax agents.
Orders
Orders of the court
1. The appeal be dismissed.
2. The applicant pay the respondent’s costs of and incidental to the appeal, to be taxed if not agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
As to s 20-45, referred to in s 20-15 of the TAS Act, that section provides:Certain events may affect your continued registrationThe following events may affect your continued registration as a *registered tax agent or BAS agent:(a) you are convicted of a *serious taxation offence;(b) you are convicted of an offence involving fraud or dishonesty;(c) you are penalised for being a *promoter of a *tax exploitation scheme;(d)you are penalised for implementing a *scheme that has been promoted on the basis of conformity with a *product ruling in a way that is materially different from that described in the product ruling;(e) you become an undischarged bankrupt or go into external administration;(f) you are sentenced to a term of imprisonment. Mr Ham placed emphasis on the words “your continued” in s 20-45 in his submissions. He also referred to the object of the TAS Act, as found in s 2-5:Object The object of this Act is to ensure that * tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct. This is to be achieved by (among other things): (a)establishing a national Board to register tax agents, BAS agents and tax (financial) advisers; and (b)introducing a * Code of Professional Conduct for * registered tax agents, BAS agents and tax (financial) advisers; and (c)providing for sanctions to discipline registered tax agents, BAS agents and tax (financial) advisers. Mr Ham also referred to s 20-1, the general guide to Pt 2 of the TAS Act, in which are to be found the provisions governing initial and continued registration:What this Division is about You must be registered to provide tax agent services for a fee or to engage in other conduct connected with providing such services. You will be eligible for registration if you are a fit and proper person and have appropriate qualifications and experience. If you are eligible and apply to the Tax Practitioners Board for registration as a registered tax agent, BAS agent or tax (financial) adviser, you will be registered for a period of at least 3 years. Your registration may be subject to conditions. You may seek to vary these conditions. Certain events, mainly relating to criminal convictions and bankruptcy, may affect your continued registration. You may also apply to have your registration renewed.He emphasised the words, “mainly relating to criminal convictions and bankruptcy, may affect your continued registration” in s 20-1. Paragraph 80(1)(b) of the TAS Act provides that a Guide such as that found in s 20-1 forms part of that Act. The role of a Guide is specified in s 80-5 of the TAS Act:The role of Guides in interpreting this Act (1)A Guide consists of sections under a heading indicating that what follows is a Guide to a particular Subdivision, Division etc. (2)A Guide forms part of this Act, but is kept separate from operative provisions. In interpreting an operative provision, a Guide may only be considered: (a) in determining the purpose or object underlying the provision; or (b)to confirm that the provision's meaning is the ordinary meaning conveyed by its text, taking into account its context in the Act and the purpose or object underlying the provision; or (c)in determining the provision's meaning if the provision is ambiguous or obscure; or (d)in determining the provision's meaning if the ordinary meaning conveyed by its text, taking into account its context in the Act and the purpose or object underlying the provision, leads to a result that is manifestly absurd or is unreasonable.