Harris & Tax Practitioners Board
[2014] AATA 430
•30 June 2016
SRBP and Tax Practitioners Board [2016] AATA 456 (30 June 2016)
Division
TAXATION & COMMERCIAL DIVISION
File Number
2014/5366
Re
SRBP
APPLICANT
And
Tax Practitioners Board
RESPONDENT
DECISION
Tribunal F D O'Loughlin, Senior Member
Date 30 June 2016 Place Melbourne In place of the cancellation of the Applicant’s registration as a tax agent the Tribunal directs that:
(a)pursuant to s 30-15 of the TAS Act the Applicant be given a written caution;
(b)pursuant to s 30-20(1) of the TAS Act, the Applicant’s registration be restricted such that for three years she is not to offer any form of fee from refund service to her clients and is not to be involved in any activity as part of her tax agent practice that includes the receipt of money belong to her clients;
(c)pursuant to s 30-20(1)(a) of the TAS Act, before 30 June 2017 the Applicant is to undertake and satisfactorily complete remedial education in a course approved by the Respondent concerning trust accounting that includes the nature and content of trustees duties and obligations concerning trust moneys and the course Ethics, Tax Agent Services Act (TASA) 2009 and the Code of Professional Conduct offered by The Tax Institute or equivalent course approved by the Respondent;
(d)pursuant to s 30-20(1) of the TAS Act, for the next three years the Applicant is to provide to the Respondent details of any and all bank accounts she operates and access to her tax agents portal so as to allow the Respondent to be able to monitor the Applicant’s compliance with (b) above.
.............[sgd].............................................
Senior Member
TAX AGENTS CODE OF CONDUCT - breach of TASA Code of Professional Conduct –tax agent registration terminated – Applicant experienced personal and health problems – appropriate sanction – comparison with registration and regulation of legal practitioners
Legislation
Legal Profession Uniform Law Application Act 2014 (Vic) ss 299, 120
Tax Agent Services Act 2009 (Cth) ss 30-20(1)(a), 30-20(1), 60-125(2), 30-30, 40-25, 30-10(1), 30-10(3), 30-10(7), 30-15, 60-95, 60-125, 30-25Cases
Chamberlain v Australian Capital Territory Law Society (1993) 118 ALR 54
Harris and Tax Practitioners Board [2014] AATA 430
In the Matter of the Legal Practitioners Act 1898 to 1936 and In the Matter of Clem Alexander Parbury [1989] NSWCA 132
Legal Practitioners Conduct Board v Nicholson [2006] SASC 21
Legal Services Commissioner v Mirabella [2014] VCAT 339
Prothonotary v Del Castillo [2001] NSWCA 75 Quinn v Law Institute of Victoria Ltd [2007] VSCA 122
SRBP and Tax Practitioners Board [2015] AATA 292SRBP and Tax Practitioners Board [2015] AATA 302
REASONS FOR DECISION
F D O'Loughlin, Senior Member
30 June 2016
The Applicant seeks the Tribunal’s review of the Respondent’s decisions:
(a)pursuant to ss 60-125(2) and 30-30 of the TAS Act,[1] to cancel her Tax Agent registration for breaches of the Code;[2] and
(b)pursuant to s 40-25 of the TAS Act, to impose a two year period in which she will not be eligible to apply for a registration.
[1]Tax Agent Services Act 2009 (Cth).
[2]TAS Act, s 30-10, The Code of Professional Conduct.
The issue that emerges is whether the Applicant’s particular personal circumstances are such that what would otherwise be an appropriate decision for the Respondent to make ought be set aside and a less severe decision made in its place.
The procedural history to the Respondent’s decision in this matter is not controversial and can be taken directly from the Respondent’s Statement of Facts Issues and Contentions.[3]
[3]Without adopting the Respondent’s paragraph numbering.
(a)On 7 October 2014 the Respondent found that the Applicant had failed to comply with three sub-sections of the Code ….
You must act honestly and with integrity - [TAS Act, 30-10(1)]
(b)The Respondent found that the Applicant had not acted honestly and with integrity towards her clients, by reason of:
(i)having withheld from T/P 1, a client, the information that T/P 1’s tax refunds 2009 and 2010, amounting to $6,210.65 had been received from the Australian Tax Office (the ATO) throughout the period May 2013 until November 2013; and
(ii)having continually delayed the forwarding of tax refunds to clients, and having instructed staff to advise such clients that their refunds had not been received from the ATO.
You must account to your client for money and property held on trust - [TAS Act, s 30-10(3)]
(c)The Respondent found that the Applicant had failed to account to her clients for money received on behalf of those clients and held on trust, by reason of:
(i)failing to forward the refund from the ATO due to T/P 1 received on 15 May 2013 until 5 March 2014;
(ii)failing to forward the refund from the ATO due to T/P 2 received on 28 October 2013 until 3 February 2014;
(iii)failing to forward the refund from the ATO due to T/P 3 received on 21 October 2013 until 31 March 2014;
(iv)failing to forward the refund from the ATO due to T/P 4 received on 15 August 2013 until 19 September 2013; and
(v)failing to forward the refund from the ATO due to a further 73 clients for a period in excess of 14 days after receipt from the ATO, that being the period allowed for forwarding refunds under the Board’s policy.
You must ensure that tax agent service are provided competently - [TAS Act, s30-10(7)]
(d)The Respondent found that the Applicant had failed to ensure that tax agent services that she provided, or that were provided on her behalf, were provided competently by reason of:
(i)failing to exercise meaningful supervision over the quality and timeliness of her employees’ work;
(ii)leaving employees to ‘self-manage’ both individual work tasks and the general operation of the practice; and
(iii)being absent from the practice for prolonged periods.
The Respondent had material before it upon which it based its conclusions. Scrutiny of the material upon which the Respondent based its conclusions in [3(b)(ii)] and [3(d)] above reveals that the apparent evidence from separate sources was compiled or prepared either by or with the assistance of one of the Respondent’s investigators, and in some critical respects is expressed in almost identical terms. The evidence led in the hearing of this application in relation to these matters was vague and imprecise, and not such as would provide a reliable foundation for finding the allegations to be proven. While the question of whether there has been a breach of the Code is not subject to review in this application, as observed below, whether there is reliable evidence to support findings that there have been breaches is a matter that can be factored into sanction considerations.
The Respondent’s conclusions in [3(b)(i)] and [3(c)] above are demonstrated by the documentary evidence and are not disputed. The appropriate response to these conclusions is disputed.
What has also been revealed during the course of this application is that in conjunction with the delayed provision of ATO refunds to her clients:[4]
(a)73 “fee from refund” clients identified in the T-documents at pages 77 and 78 experienced delays of more than 14 days in the Applicant passing on ATO refunds to them, and in 53 of these cases the ATO refunds were transferred by the Applicant out of the Trust bank account (the Trust account) and into the business bank account (the business account) within 2 days of being received from the ATO.
(b)The business account remained in overdraft throughout the relevant period, so that transferring refunds from the Trust account to the business account enabled the Applicant to reduce the overdraft interest incurred by the business account for as long as the refunds remained in that account, which in 6 cases was for a period of more than 120 days.
(c)The refunds transferred into the business account were mingled with fee income and business expenditure items, and [had the effect of] the overdraft limit on the account [not] being exceeded.
(d)The Trust account balance was reduced to zero by funds being transferred into the business account by the Applicant on at least 60 occasions during the year ending 30 June 2014.
[4]Subject to the slight alteration noted in [5(c)], again taken from the Respondent’s Statement of Facts Issues and Contentions without adopting the Respondent’s paragraph numbering.
While clients may have been deprived the benefit of use of their money for a period, no client lost the principal amounts that were owed to them by the Applicant. All refunds were eventually passed on to clients.
In statements made to the Tribunal in the course of the present application the Applicant claimed that the clients’ refunds were kept in the trust account and separate from the business account. It was only when I attended to forwarding the refunds that I transferred money from the trust account to the business account and then to the clients, and that clients’ monies were kept in a dedicated bank account and the issue of not having enough money to pay refunds to clients did not arise.
The Applicant’s evidence was that when she made these statements she believed them to be true, that it was only when her lawyers had analysed bank documents that were filed by the Applicant in this Application that the inaccuracies in those statements were appreciated, and that the period in which these events occurred was a blur.
In the lead up to the hearing of the present application the Applicant had the benefit of a stay order of the Tribunal that was subject to the condition that she not offer a fee from refund service. The Applicant did not observe that stay order and as a consequence it was lifted temporarily and the Applicant has endured a period of cancellation of her registration as a Tax Agent for approximately two months from 24 November 2015 until 20 January 2016. The Applicant explained that she was pressured into offering the service to a minority of clients who had a particular need for it, only did so at their request, did not unduly delay passing on any entitlements and only consciously held refunds where there was ongoing uncompleted work for a client who asked that the refund be held and that evidence was corroborated by evidence from that client. The Respondent contends that it is permissible and appropriate to have regard to these matters in reviewing the appropriate response to the breaches of the Code, the sanctions for which are currently under review.
The Applicant has come to the Respondent’s attention in 2010 for delayed refunds to clients and was the subject of a formal caution in 2012 and was required to complete a trust accounting course which she did in 2013. It is apparent that that trust accounting course may not have had content that that covered the nature of trust holdings of money and the full responsibilities and duties of trustees in relation to those holdings.
Subject to the observations concerning paragraphs [3(b)(ii)] and [3(d)] above, the facts as set out above can be accepted.
The Applicant’s business
The Applicant began practising as a sole practitioner in April 2005. Between 2008 and 2014, the Applicant engaged a consultant to assist in carrying on her practice. Between 2012 and 2014, the Applicant employed three people to assist in carrying on her practice in addition to the consultant engaged earlier. The Applicant was under business and financial pressure when her practice had this level of operations.
As part of her practice the Applicant provided a service to clients whereby clients elected to have their refund deposited into the Applicant’s trust account and the fee for preparing the income tax return deducted from the refund prior to the refund being transferred to them. The Applicant describes this service as a Fee From Refund service. It is that feature of the Applicant’s practice that has led to the problems with the Code and the present application.
No issue has been raised concerning the quality of tax returns and statements prepared by the Applicant and it is apparent that notwithstanding her personal circumstances that she participates in continuing professional development activities and participates in a network of peer professionals.
Today the Applicant trades as a sole trader without professional staff and has a smaller client base.
The Applicant’s personal circumstances
The Applicant’s personal circumstances are appropriately considered.
The Applicant is a 54 year old single mother of four children, three living with her, aged 26, 19, 12 and 10 years.
The Applicant has been the subject of serious domestic violence and has had a mental illness from which she is recovering. The Respondent accepts these circumstances. Notwithstanding the Respondent’s acceptance of these circumstances it is necessary to detail then at least at an overview level so as to show their significance.
For ten years leading up to the problematic period for the Applicant’s tax agent practice, she was in an abusive relationship with her estranged husband. He was verbally and physically abusive to the Applicant and her children, and had physically assaulted them at various times causing injuries. Intervention orders were taken out by both the Applicant and the police. In 2013 the Applicant separated from her husband and her domestic affairs are more stable now with intervention orders in place. The documentation concerning the long history of domestic violence is extensive.
Not unconnected with this history of domestic violence the Applicant developed a depression styled mental illness in 2013 from which she is recovering but has not fully recovered.
Having regard to these factors and the manner on which she conducted herself through the course of dealing with the present application, it can be accepted that the Applicant was struggling to cope and that looking back with hindsight, life for her could have been “a blur” as she describes it.
Being in sole practice on her own account is an asset for the Applicant as she needs to balance work and family needs being the provider for children in her care. The flexibility of being self-employed assists greatly.
Scope of review in the Tribunal
The scope of the Tribunal’s review power is confined by s 70-10 of the TAS Act which, relevant to the present context, is in the following terms:
S 70-10 Administrative review
An application may be made to the Administrative Appeals Tribunal for review of any of the following decisions of the Board:
…
(e) a decision under Subdivision 30-B or 40-A to terminate registration;
(f) a decision under section 30-20 to make an order or to specify a time period in respect of an order;
The Respondent’s finding that the Applicant has breached the code of conduct is not reviewable: the sanction for the breach is. That said, it ought to be beyond controversy that there has been a breach of the Code in the present circumstances. Further, dealings with a professional regulator call for candour, openness and disclosure.
Given the sanction needs to be appropriate in the factual circumstances it is nevertheless necessary to consider the evidence of the breaches of the Code found by the Respondent and form a view as to whether the events alleged to have occurred can be accepted as proven and consider those events in the context of the statutory regime of the TAS Act. Indeed much of the conduct of the Respondent’s case was directed to this end.
The statutory regime
The object of the TAS Act is set out in s 2-5 in the following terms:
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 and BAS agents; and
(b) introducing a Code of Professional Conduct for registered tax agents and BAS agents; and
(c) providing for sanctions to discipline registered tax agents and BAS agents.
The Board has an investigatory role and powers as set out in subdivision 60-E of the TAS Act.[5] It is not in dispute that their investigation was done in accordance with s 60-95 of the Act. Following an investigation the Board can do one or more of the things listed in s 60-125 of the TAS Act including imposing a sanction under Subdivision 30-B and terminate an entity's registration under Subdivision 40-A. For breach of the Code the Board may terminate a tax agent’s registration. Alternatively the Board can issue a caution.
[5]The Tax Practitioners Board established by s 60-5 of the TAS Act.
Section 30-1 is in the following terms:
The Code of Professional Conduct regulates your personal and professional conduct as a registered tax agent, BAS agent or tax (financial) adviser.
If the Board investigates you and finds that you have failed to comply with the Code, the Board may give you a written caution, order you to take specified actions, or suspend or terminate your registration.
You must also notify the Board if certain circumstances change, including if you cease to meet the requirements for registration.
The Code of Professional Conduct terms are in s 30-10. They are as follows:
The Code of Professional Conduct
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.
Independence
(4)You must act lawfully in the best interests of your client.
(5)You must have in place adequate arrangements for the management of conflicts of interest that may arise in relation to the activities that you undertake in the capacity of a * registered tax agent, BAS agent or tax (financial) adviser
Confidentiality
(6)Unless you have a legal duty to do so, you must not disclose any information relating to a client's affairs to a third party without your client's permission.
Competence
(7)You must ensure that a * tax agent service that you provide, or that is provided on your behalf, is provided competently.
(8)You must maintain knowledge and skills relevant to the * tax agent services that you provide.
(9)You must take reasonable care in ascertaining a client's state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or a thing you are doing on behalf of the client.
(10)You must take reasonable care to ensure that * taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client.
Other responsibilities
(11)You must not knowingly obstruct the proper administration of the * taxation laws.
(12)You must advise your client of the client's rights and obligations under the * taxation laws that are materially related to the * tax agent services you provide.
(13)You must maintain professional indemnity insurance that meets the Board's requirements.
(14)You must respond to requests and directions from the Board in a timely, responsible and reasonable manner.
The powers of the Board for a breach of the Code are provided for in ss 30-15 to 30-30. Those sections are in the following terms:
S 30-15 Sanctions for failure to comply with the Code of Professional Conduct
(1)This Subdivision applies if the Board is satisfied, after conducting an investigation under Subdivision 60-E, that you have failed to comply with the * Code of Professional Conduct.
(2)The Board may do one or more of the following:
(a)give you a written caution;
(b)give you an order under section 30-20;
(c)suspend your registration under section 30-25;
(d)terminate your registration under section 30-30.
S 30-20 Orders
(1)The Board may make an order that requires you take one or more actions including, but not limited to, the following:
(a)completing a course of education or training specified in the order;
(b)providing * tax agent services for which you are registered only under the supervision of a * registered tax agent, BAS agent or tax (financial) adviser specified in the order;
(c)providing only those tax agent services that are specified in the order.
(2)The Board must notify you in writing of the order. The order may specify the following, as appropriate:
(a)the period of time within which you must complete the requirements specified in the order;
(b)the period of time during which the order applies.
S 30-25 Suspension
(1)The Board may, by notice in writing, suspend your registration for a period determined by the Board.
(2)You must not provide * tax agent services during the period of suspension.
(3)If, when the Board suspends your registration under subsection (1), your registration is already suspended, suspension is for a further period that the Board determines is appropriate. The further period commences at the end of the period of suspension.
(4)While you are suspended, you are taken not to be a * registered tax agent, BAS agent or tax (financial) adviser, except for the purposes of:
(a)Part 2 (Registration), Subdivision 30-C (Notifying a change of circumstances) and Part 4 (Termination of registration); and
(b)this Division.
S 30-30 Termination
The Board may terminate your registration.
It is clear that the TAS Act is intended to create a system of measured and tailored response to breaches of standards. For example the Explanatory Memorandum to the Bill which when enacted became the TAS Act included:
21. Under the new arrangements, if a tax agent or BAS agent has breached the Code, the Board has a range of options. The Board may caution the agent, require the agent to complete a course of training, subject the agent to practising restrictions, require the agent to practise under supervision, or suspend or terminate the agent's registration. (Currently, the state Boards are only able to suspend or terminate registration.)
23. Such a wide range of sanctions allows the Board to tailor its response according to the severity of the misconduct.
104. The only administrative sanctions that are currently available to the state Tax Agents' Boards (state Boards) are suspension or cancellation of registration. This can leave the state Boards without an effective response to conduct that is not desirable, but does not warrant depriving a person of their livelihood.
110. The Bill provides the Board access to a graduated range of administrative sanctions for breaches of the Code, so that the Board is able to respond to breaches appropriately.
116. If the Board finds that an agent has breached the Code, it may impose one or more of a range of graduated administrative sanctions. The sanctions the Board may impose include:
·cautioning the agent;
·requiring the agent to complete a course of training;
·subjecting the agent to specified restrictions when conducting their practice;
·requiring the agent to practise under supervision; and/or
·suspending or terminating the agent's registration.
170. The sanctions available to the Board allow the Board to tailor the sanction to the seriousness of the conduct that breaches the Code. The purpose of the sanctions is not primarily to punish tax agents and BAS agents, but rather to improve the performance of agents and maintain public confidence in agents' adherence to certain standards.
172. The graduated range of sanctions provides the Board with the capacity to tailor its response to the severity of the breach of the Code. For instance, in the case of isolated mistakes, the Board may take no specific action, or issue a written caution. For repeated mistakes the Board may issue an order specifying that the tax agent or BAS agent must undertake further education or training in the particular area. In more severe cases, where a tax agent or BAS agent has displayed a serious disregard for the Code, suspension or termination of registration may be appropriate. This is particularly so where a tax agent or BAS agent causes serious damage to their clients, or to the integrity of the tax system. Behaviour that calls into doubt the honesty, integrity or competence of a tax agent or BAS agent, or raises questions about their suitability to practise, may warrant more severe sanctions such as suspension or termination of registration.
300. The administrative sanctions available to the state Boards to discipline tax agents are inflexible and too limited, leading, at times, to counterproductive outcomes: the state Boards can only take an 'all or nothing' approach to regulation for misconduct. Because the sanctions available to the state Boards are limited to suspension or termination of registration, unless the misconduct is sufficiently serious to warrant the taking away of a person's livelihood, the state Boards are reluctant to impose a sanction. The ATO has advised that, in 2007-08, of 660 complaints that have been finalised, only 25 resulted in the imposition of a sanction.
309. The key elements of such an option would be:
· a national Tax Practitioners Board (Board) to replace the existing state-based Boards to, among other things, make consistent the registration process and standardise the way in which tax agents are regulated across the country;
· registration and regulation of both entities providing tax agent services (as tax agents) and entities providing BAS services (as BAS agents);
· a legislated and enforceable Code of Professional Conduct (Code), based largely on the codes of the professional associations, to make explicit the standards expected of tax agents and BAS agents and to clearly define their roles and responsibilities;
· a wider and more flexible range of administrative sanctions which may be imposed by the Board.
Parallel systems
The current system of registration and regulation of taxation practitioners has parallels with the systems of registration and regulation of legal practitioners. Those parallels are apparent in their terms and in what has been said about the respective systems.
Schedule 1 of the Legal Profession Uniform Law Application Act 2014 (Vic) is in the following terms:
Schedule 1—Legal Profession Uniform Law
3 Objectives
The objectives of this Law are to promote the administration of justice and an efficient and effective Australian legal profession, by—
….
(b)ensuring lawyers are competent and maintain high ethical and professional standards in the provision of legal services; and
(c)enhancing the protection of clients of law practices and the protection of the public generally; and
….
(e)promoting regulation of the legal profession that is efficient, effective, targeted and proportionate; and
….
The regulation of unsatisfactory professional conduct is provided for in s 299 and a graduated range of sanctions falling short of suspension from practice is available to the regulatory authority. Disqualification from legal practice is provided for in s 120 and is available as a sanction if disqualification is justified and the legal practitioner has been found guilty of professional misconduct.
In these circumstances, some guidance can be derived from decisions in these settings, particularly as the TAS Act system is relatively new.
The Respondent’s contentions
The Respondent defended its decision to cancel the Applicant’s registration submitting that:
(a)the tax agents regulatory framework is focused on protection of standards more than sanction and the regime differs from legal profession regimes;
(b)removal of a legal practitioner from the roll is more significant than termination of registration as a Tax Agent because it prevents work in the field completely, whereas termination of tax agent registration does not prevent employment as an employee and hence the ultimate sanction under the two regimes is not the same. This may be so, however sensible moderation and sanctions that achieve the objects of the regime are called for under both systems;
(c)the tax agents regulatory framework allows conditions to be placed upon the subject areas in respect of which tax agent services might be provided,[6] as opposed to allowing a range of conditions to be imposed on a practising certificate in legal regulatory regimes. This submission ignores the width of s 30-20(1) and cannot be accepted as put;
(d)there have been difficulties with the Applicant since 2010. In this regard it is not apparent that the Applicant’s circumstances have been brought to earlier considerations;
(e)the Applicant’s personal circumstances do not excuse her conduct: the decision in The Matter of Clem Alexander Parbury is an example;[7] and
(f)the Applicant’s conduct in the course of the present application and the statements she made and the breaches of stay conditions cannot be ignored.
[6]TAS Act, s 20-25 (5)-(6).
[7]In the Matter of the Legal Practitioners Act 1898 to 1936 and In the Matter of Clem Alexander Parbury [1989] NSWCA 132.
The Applicant’s contentions
Unsurprisingly, the Applicant, identifies several instances where the sanction otherwise to be imposed was significantly softened.
The effect of personal and health circumstances
The closest parallel to the Applicant’s circumstances in a matter before this Tribunal is the decision in Harris and Tax Practitioners Board, where mental illness weighed heavily in the outcome.[8]
[8][2014] AATA 430.
A practitioner’s state of health or domestic circumstances or both may explain how unprofessional conduct came to occur but does not change the character of that conduct: it remains unprofessional conduct based on an objective assessment of the events that occurred.[9] That said, under the new regime for regulation of tax agents it is clear that the role is not to punish but to take action so as to encourage maintenance of standards.[10] Temporary medical conditions are a factor to be considered and in Harris the lawyer was not struck off when he otherwise may have been.[11] In Chamberlain v Australian Capital Territory Law Society a reprimand was substituted for suspension for what was otherwise regarded as grave impropriety.[12]
[9]Legal Practitioners Conduct Board v Nicholson [2006] SASC 21, 26 per Doyle CJ, with whom Perry J at 40 and White J at 41 agreed, and the authorities there referred to.
[10]Legal Practitioners Conduct Board v Nicholson [2006] SASC 21, 27 per Doyle CJ, with whom Perry J at 40 and White J at 41 agreed, and the authorities there referred to.
[11]Legal Practitioners Conduct Board v Nicholson [2006] SASC 21, 30 per Doyle CJ, with whom Perry J at 40 and White J at 41 agreed, and the authorities there referred to.
[12](1993) 118 ALR 54.
Present fitness, not fitness as at the time of the unsatisfactory conduct is relevant: Prothonotary v Del Castillo.[13]
[13][2001] NSWCA 75, 71.
There are analogies with sentencing such that any mental conditions at the time of the breaches of standards require specific and general deterrence to be sensibly moderated: Quinn v Law Institute of Victoria Ltd where a suspension otherwise appropriate was quashed. [14] In Legal Services Commissioner v Mirabella similar considerations led to reducing the otherwise appropriate sanction to a reprimand with various practice restrictions.[15]
[14][2007] VSCA 122, 36 (Maxwell P).
[15][2014] VCAT 339.
Protecting the public interest by maintaining standards requires recognition that the public interest function of a regulatory regime can be regarded as served if the decision maker is satisfied that the offender has recovered.[16]
[16]Legal Practitioners Conduct Board v Nicholson [2006] SASC 21, 30 per Doyle CJ, with whom Perry J at 40 and White J at 41 agreed, and the authorities there referred to.
DECISION
In circumstances where:
(a)the current system has a protective function;
(b)significant health and personal issues are not to be ignored and sufferers are to be afforded sensible moderation of otherwise applicable sanctions;
(c)a graduated system of sanction is available, and intended to be applied, so that the sanction applied can be both appropriate in the circumstances and not a ruinous imposition affecting tax agents’ livelihoods;
(d)there is no evidence that the Applicant has difficulties in her practice beyond dealing with ATO refunds;
(e)the Applicant is no longer as afflicted by her personal and health issues as she was at the relevant time; and
(f)registration as a tax agent can be allowed with limits on the scope of particular activities and other protective styled orders can be made so as to prevent recurrence of the problems that led to the present application and thereby achieve the objectives of the new system and maintain standards,
on a fine balance recognising the severe difficulties that have contributed to the Applicant’s predicament, an appropriate sanction that addresses these matters, protects the public interest and standards of tax agents and reflects an appropriate balance, is to vary the decision under review as set out below.
In place of the cancellation of the Applicant’s registration as a tax agent the Tribunal directs that:
(a)pursuant to s 30-15 of the TAS Act the Applicant be given a written caution;
(b)pursuant to s 30-20(1) of the TAS Act, the Applicant’s registration be restricted such that for three years she is not to offer any form of fee from refund service to her clients and is not to be involved in any activity as part of her tax agent practice that includes the receipt of money belonging to her clients;
(c)pursuant to s 30-20(1)(a) of the TAS Act, before 30 June 2017 the Applicant is to undertake and satisfactorily complete remedial education in a course approved by the Respondent concerning trust accounting that includes the nature and content of trustees duties and obligations concerning trust moneys and the course Ethics, Tax Agent Services Act (TASA) 2009 and the Code of Professional Conduct offered by The Tax Institute or equivalent course approved by the Respondent; and
(d)pursuant to s 30-20(1) of the TAS Act, for the next three years the Applicant is to provide to the Respondent details of any and all bank accounts she operates and access to her tax agents portal so as to allow the Respondent to be able to monitor the Applicant’s compliance with (b) above.
As noted at the end of the hearing in this matter, it is now a matter of public record that the Lawyers (both Counsel and Solicitors) acting for the Applicant in this matter have done so on a pro bono basis.[17] Apart from the direct benefit the Applicant has derived from that assistance, it is appropriate to record the Tribunal’s appreciation for the efforts of the Applicant’s lawyers in a matter that probably transpired to be more involved than expected when they committed to the assistance they have provided. The Tribunal has been a significant beneficiary of the pro bono work done. It is also appropriate to record the Respondent’s sentiment in joining in the appreciation expressed to the Applicant’s lawyers.
[17]SRBP and Tax Practitioners Board [2015] AATA 292;
SRBP and Tax Practitioners Board [2015] AATA 302.
I certify that the preceding 46 (forty-six) paragraphs are a true copy of the reasons for the decision herein of F D O’Loughlin, Senior Member
..........[sgd]..............................................
Associate
Dated 30 June 2016
Dates of hearing 10, 11, 15 December 2015 Counsel for the Applicant Mr Andrew Broadfoot and Ms Claire Nicholson
Solicitors for the Applicant Arnold Bloch Leibler Advocate for the Respondent Mr David Brown Solicitors for the Respondent Australian Government Solicitor
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