Huang and Tax Practitioners Board (Taxation)
[2021] AATA 1824
•17 June 2021
Huang and Tax Practitioners Board (Taxation) [2021] AATA 1824 (17 June 2021)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s):2020/5120
Re:Ansheng Huang
APPLICANT
Tax Practitioners BoardAnd
RESPONDENT
DECISION
Tribunal:Deputy President Bernard J McCabe
Date:17 June 2021
Place:Sydney
1.The application is dismissed pursuant to s 42A(5) of the Administrative Appeals Tribunal Act 1975 (Cth).
.........................SGD...........................
Deputy President Bernard J McCabe
Catchwords
Registration as a tax agent – where the applicant’s registration was cancelled for failure to meet the fit and proper person requirement – whereas the applicant has been in non-compliance on multiple occasions – where the applicant has been afforded numerous extensions to file material – whether the applicant has failed to comply with directions and reasonably progress his application – applicant has so failed – application dismissed.
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Tax Agent Services Act 2009 (Cth)
REASONS FOR DECISION
Deputy President Bernard J McCabe
Mr Ansheng Huang lodged his application for review on 17 August 2020. Since that time, he has failed to comply with directions issued by the Tribunal. He has not, as yet, lodged any material in connection with the substantive review. The Tax Practitioners Board has asked the Tribunal to use its powers in s 42A(5) of the Administrative Appeals Tribunal Act 1975 (‘AAT Act’) to dismiss Mr Huang’s application for review. In the alternative, the Board says the proceedings should be dismissed under s 42B(1)(b) as they have no reasonable prospect of success.
The application for review should be dismissed under s 42A(5). I explain my reasons for that conclusion below.
The application for review and the procedural history of the matter
The Board made a reviewable decision on 20 February 2020 to cancel Mr Huang’s registration as a tax agent. The Board found Mr Huang had contravened subsections 30-10(1), 30-10(2) and 30-10(14) of the Code of Professional Conduct in the Tax Agent Services Act 2009 (‘TASA’) and was no longer a fit and proper person pursuant to subsection 20-5(1)(a) of the TASA. The cancellation took effect on 10 April 2020. The Board also decided Mr Huang was unable to apply for (re)registration for a period of 12 months.
Mr Huang sought review in the Tribunal. His application for review was filed on 17 August 2020. Mr Huang is now eligible to apply for registration because the 12-month non-application period has expired. He says he wishes to persist with these proceedings because he wants the Board’s findings cleared from his record.
In the absence of a stay, Mr Huang was not permitted to work as a tax agent. He says he has continued to provide accounting and book-keeping services to clients, and he says he has been very busy, not least because of the disruption occasioned by the pandemic. He produced a medical certificate, signed by his general practitioner, that says Mr Huang has worked himself to a state of exhaustion.
In order to progress the review, the Tribunal has made case management directions that established a timetable taking the matter towards hearing. The first set of directions was issued on 11 January 2021. The directions required the Board to provide its Statement of Facts, Issues and Contentions and the material it intended to rely upon by 8 February 2021, with Mr Huang due to follow suit by 8 March. (I asked the Board to go first in the exchange at least partly because Mr Huang was unrepresented.) The Board complied with the directions, but Mr Huang failed to do so.
At a case management directions hearing on 22 March, I admonished Mr Huang for his failure to comply with the earlier directions but agreed to give him further time. I issued a fresh direction that required Mr Huang to file his Statement of Facts, Issues and Contentions, and the evidentiary material in support of his case, by 23 April 2021. I warned Mr Huang at the time that he should not expect further extensions.
Alas, Mr Huang failed to file the material in compliance with these fresh directions. I subsequently decided to set the matter down for a non-compliance hearing. I issued a direction dated 5 May 2021 requiring the applicant to put on submissions and material explaining the non-compliance by 12 May 2021. He was warned the matter could be dismissed for non-compliance. But Mr Huang did not comply with that direction either. Just before the non-compliance hearing, he did file a medical certificate signed by his general practitioner and a (slightly) more fulsome medical report prepared by the same doctor. The medical certificate did not offer a diagnosis as such but referred to Mr Huang experiencing exhaustion. The medical report confirmed the applicant was diagnosed with anxiety and depression and that he was being treated accordingly. The medical evidence said his ability to function was impacted from April 2020, although the doctor also acknowledged the applicant was working hard in his business – so hard that he was exhausted.
I will return to the circumstances of Mr Huang’s non-compliance below. It would be helpful to first explain the circumstances surrounding the application.
The Board’s findings
Mr Huang came to the Board’s attention after he failed to sort out a debt owing to the Australian Taxation Office. The debt arose out of decisions made in relation to Mr Huang’s taxation affairs in 2011 and preceding years. Mr Huang has engaged intermittently with the ATO in relation to the debt since that time: I understand he has received extensions of time to lodge objections on two occasions, but he has failed to make good on those opportunities. He also entered into payment arrangements with the Commissioner, but he has not stuck to the arrangements. He has criticised ATO staff whom he claims were difficult to deal with.
The Board formally warned Mr Huang on 17 April 2018 that he needed to resolve his debt with the Commissioner. He did not do so, and an amount remains outstanding. In due course, the Board took regulatory action that culminated in the reviewable decision.
Mr Huang says he wants to revisit the Commissioner’s decisions in relation to the earlier tax years. Mr Huang says the assessments were wrong and he can prove it. He says the tax debt would be reduced or eliminated, which would make the problem with the Board go away.
The Tribunal would not ordinarily look behind an assessment which has not been the subject of a valid objection, nor would it look behind an objection decision otherwise than in the course of proceedings under Part IVC of the Taxation Administration Act 1953. It is not appropriate to litigate a tax dispute before the Board. If Mr Huang wants to dispute the debt which lies at the heart of these proceedings, he has had ample opportunity to do so. Even at this late stage, there is no evidence that he has engaged with the Commissioner in relation to the debt – either to formally dispute the debt, or to make arrangements to pay it (he did have a payment arrangement in place several years ago, but it was cancelled on 10 December 2015). It follows that the problem at the heart of the reviewable decision – the failure to meet taxation obligations in his personal tax affairs – is unresolved.
The application for dismissal under s 42B
The Board says the ongoing failure to deal with the tax debt in the proper way means the Tribunal is unlikely to reach a different conclusion on review in this case. The Board argued the matter should therefore be dismissed pursuant to s 42B(1)(b) (or in the alternative dismissal under s 42A(5)) because the applicant has limited prospects of success. I agree the lack of resolution in relation to the tax debt is a serious obstacle, but I cannot safely conclude the applicant has no prospects. At a minimum, the applicant might have some chance of persuading the Tribunal not to deregister him, or to reduce the period during which he is not permitted to seek re-registration. While I acknowledge Mr Huang is now eligible to seek registration because the period of non-registration has expired, I accept he has the legitimate objective of overturning the factual finding that he is not a fit and proper person. In those circumstances, it would be inappropriate to dismiss the proceedings pursuant to s 42B. That brings us back to the application for dismissal under s 42A(5).
The application for dismissal under s 42A(5)
The power to dismiss under s 42A(5) arises when the applicant fails to comply with directions OR fails to proceed with the application within a reasonable time. The applicant has not complied with directions on three occasions, and his failure to file material in support of his application suggests to me he has failed to proceed with the application. The question is whether he has failed to do either or both of those things within a reasonable time. What is reasonable depends on the circumstances. The applicant’s health is one relevant circumstance. The fact he is self-represented must also be taken into account. I also acknowledge he is under pressure because he has not been able to work as a tax agent after the decision came into effect – although it turns out he has been working regularly.
The applicant’s mental health is an issue. While the medical evidence is limited, I accept he suffers from anxiety and depression. Those health conditions may have made it more difficult for him to engage in these proceedings. But I also note the dilatory approach is not a recent phenomenon. Mr Huang has failed to engage with the ATO or the Board long before April 2020, the date when his doctor suggested the problems arose in connection with his work stressors. The medical problems may have exacerbated his tendency towards inaction, but they are not the source. The unusual work conditions that were created by the reviewable decision (and potentially accentuated by the disruption occasioned by the pandemic) are not a complete explanation for the delay either.
It was clear from Mr Huang’s submissions at the non-compliance hearing that he is unable to comply with directions or progress the application – or apply for fresh registration – because he has not dealt with the tax debt. It is unclear whether he has the means to pay the debt, but he also appears incapable of engaging with the Commissioner to deal with the underlying dispute (assuming the Commissioner would be agreeable to engaging after all this time has passed).
Mr Huang has had ample opportunity to progress this case. He has failed to comply with directions despite the indulgence of the Tribunal. While I acknowledge his difficult personal circumstances and health challenges, it seems to me has had a reasonable time to do what he needed to do. He has already occasioned the Board (and the Tribunal, for that matter) expense and inconvenience to no useful end. The matter must now come to an end.
Conclusion
The application is dismissed pursuant to s 42A(5). The applicant is at liberty to make a fresh application for registration as a tax practitioner as he sees fit.
I certify that the preceding 19 (nineteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe
..............SGD................
Associate
Dated: 17 June 2021
Date(s) of hearing: 14 and 18 May 2021 Solicitors for the Applicant Self-Represented Solicitors for the Respondent: Self-Represented
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