FEDERAL COURT OF AUSTRALIA
Incollingo v Tax Practitioners Board [2023] FCA 878
File number: NSD 1354 of 2021 Judgment of: BROMWICH J Date of judgment: 1 August 2023 Catchwords: TAXATION – where a registered tax agent seeks judicial review of investigation and sanction decisions made by the respondent and related decisions – where cross-examination evidence in prior proceedings in the Court protected by a certificate under s 128 of the Evidence Act 1995 (Cth) was used by an investigating body – whether use of the protected evidence resulted in an improper exercise of power in making the decision to investigate the applicant – whether the decision to sanction the tax agent was tainted by the protected evidence – whether there was any breach of the rules of natural justice and procedural fairness – held: application dismissed with costs Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) s 5(1)(a), s 5(1)(e)
Evidence Act 1995 (Cth) ss 5, 121(2), 122(5)(c), 128, 128(3), 128(5), 128(7), 128(7)(b), 128A(8), 131B, 157 and 178(6)
Extradition Act 1988 (Cth)
Extradition (Foreign States) Act 1966 (Cth) (repealed)
Extradition (Repeal and Consequential Provisions) Act 1988 (Cth) s 3
Income Tax Assessment Act 1936 (Cth) s 264 (repealed)
Judiciary Act 1903 (Cth) s 39B
Taxation Administration Act 1953 (Cth) Pt IVC
Tax Agent Services Act 2009 (Cth) Pts 2, 3, 4, 5, 6, 7, Subdivs 60-B, 60-D, 60-E, ss 2-5, 30-10(1), 30-10(11) 60-15, 60-20, 60-85, 60-95, 60-105(1), 60-110, 60-115, 60-125, 60-125(2), 60-125(3), 70-30(1)(b)
Evidence Act 1995 (NSW) ss 16, 129 and 130
Motor Accidents Compensation Act 1999 (NSW)
Cases cited: Addenbrooke Pty Limited v Duncan (No 5) [2014] FCA 625
Australian Workers’ Union v Registered Organisations Commissioner (No 7) [2019] FCA 195
Caffyn & Caffyn [2021] FedCFamC1F 68
Construction, Forestry, Mining and Energy Union and Another v Australian Building and Construction Commissioner [2018] FCAFC 4; 259 FCR 20
Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 4; 259 FCR 20
Cornwell v The Queen [2007] HCA 12; 231 CLR 260
Deputy Commissioner of Taxation v Advanced Holdings Pty Limited [2018] FCA 1263
Deputy Commissioner of Taxation v Gould [2020] FCA 337
Epeabaka v Minister for Immigration and Multicultural Affairs (1997) 150 ALR 397
Forrest v Kelly (1991) 32 FCR 558
Heffernan v Innes [2021] NSWSC 1033
Pauga v Chief Executive of Queensland Corrective Services [2023] FCAFC 58; 408 ALR 56
Quach v MLC Limited (No 6) [2021] FCA 271
Division: General Division Registry: New South Wales National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 133 Date of hearing: 12 December 2022 Counsel for the Applicant: Ms E A Bishop SC and Mr O Berkmann Solicitor for the Applicant: Lionheart Lawyers
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Details
- Case
- [2023] FCA 878
- Decision Date
CaseChat Overview and Summary
In the matter of Incollingo v Tax Practitioners Board, the applicant, Mr Incollingo, sought judicial review of investigation and sanction decisions made by the Tax Practitioners Board, the respondent. The decisions in question included the investigation into Mr Incollingo's conduct, the determination that contraventions had occurred, and the related sanctions imposed upon him. The crux of the case revolves around the use of protected evidence obtained during cross-examination in a previous court proceeding. This evidence was protected by a certificate issued under section 128 of the Evidence Act 1995 (Cth), which restricted its use or derivative use. Mr Incollingo argued that the use of this protected evidence by the investigating body resulted in an improper exercise of power, tainted the decision-making process, and breached the rules of natural justice and procedural fairness.
The court was tasked with determining whether the use of the protected evidence indeed led to an improper exercise of power and whether the decisions were tainted by this evidence. Additionally, the court had to assess if there was any breach of natural justice and procedural fairness in the decision-making process. The court examined the extent to which the protected evidence was used and compared it with the information available prior to the protected evidence being given. It was noted that the primary basis for the investigation and sanction decisions was information that existed before the protected evidence was provided, and careful steps were taken to prevent the protected evidence from influencing the decision-makers.
The court found that the use of the protected evidence did not result in an improper exercise of power or taint the decision-making process. The court held that the protected evidence only slightly supplemented information that was already available, and this minor addition did not impact the investigation or the sanction decisions. Furthermore, the court concluded that there was no breach of natural justice or procedural fairness. The applicant's challenges to the investigation and sanction decisions were dismissed, and the originating application was dismissed with costs. The court also ordered that the applicant pay the respondent's costs for an interlocutory application made during the proceedings.
The court was tasked with determining whether the use of the protected evidence indeed led to an improper exercise of power and whether the decisions were tainted by this evidence. Additionally, the court had to assess if there was any breach of natural justice and procedural fairness in the decision-making process. The court examined the extent to which the protected evidence was used and compared it with the information available prior to the protected evidence being given. It was noted that the primary basis for the investigation and sanction decisions was information that existed before the protected evidence was provided, and careful steps were taken to prevent the protected evidence from influencing the decision-makers.
The court found that the use of the protected evidence did not result in an improper exercise of power or taint the decision-making process. The court held that the protected evidence only slightly supplemented information that was already available, and this minor addition did not impact the investigation or the sanction decisions. Furthermore, the court concluded that there was no breach of natural justice or procedural fairness. The applicant's challenges to the investigation and sanction decisions were dismissed, and the originating application was dismissed with costs. The court also ordered that the applicant pay the respondent's costs for an interlocutory application made during the proceedings.
Orders
Orders of the court
1. The originating application be dismissed.
2. Orders 1, 2 and 3 made by Thawley J on 24 December 2021, and the stays made by those orders, be discharged with immediate effect.
3. The applicant pay the respondent’s costs as agreed or assessed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
That cross-examination, as protected by the s 128 certificate, largely discredited the explanation that he gave for his conduct, and even more so for other evidence he gave that was not protected concerning his failure to correct other misleading information given to the ATO in relation to what was referred to as the November 2006 documents. Had that evidence been available for the Conduct Committee to consider, it is difficult to see how they could have reached the beneficial conclusion that they did as to Mr Incollingo’s conduct. The evidence given under the protection of the s 128 certificate referred to in the Davies J judgment Justice Davies, at the time of indicating that a s 128 certificate would be issued, asked the then senior counsel for the Commissioner of Taxation to indicate when he was about to enter a line of cross-examination to which the certificate would apply. This was evidently sought so that the start of evidence in cross-examination given by Mr Incollingo that might be covered by the certificate would be clearly identified. That indication was duly given 7 pages later in the transcript. A short time after the indication was given, the following questions were asked and answers given (emphasis added):And all he [Mr Amorello] was able to find was a copy of the trust deed for the Lewisham Estates Trust; is that right?---Yes. And the original minutes.When you say, “the original minutes”, what do you mean by that?---The Tramdell to Demian Holdings. As this is the only time the phrase “original minutes” was used during the course of Mr Incollingo’s cross-examination, and it was not used in his 23 October 2019 affidavit, that is the evidentiary source of its reproduction in quotes at [112] of Davies J’s judgment. The s 128 certificate also covered the part of the cross-examination the next day, 16 June 2020, when the following question was asked and answer given (emphasis added):Well, can I suggest that, really, the problem was not that but it was explaining how the units in the Lewisham Estates Trusts had moved from Advanced Holdings to Demian Holdings; isn’t that right?---No, my opinion had never changed from the fact that the units were held by the trust. In – my thoughts were that the units were always held from the trust – by the Demian Trust from day 1. As this is the only time the phrase “from day 1” (or “from day one”) was used during the course of Mr Incollingo’s cross-examination, and it was not used in his 23 October 2019 affidavit, that is the evidentiary source of the phrase “from day 1” in quotes at [112] of Davies J’s judgment. The rest of the evidence given by Mr Incollingo on the topic of the creation and provision of false documents to the ATO, including the backdating of those documents to make them appear to be genuine, was readily able to be sourced in the text of his 23 October 2019 affidavit. The way in which the balance of [112] of Davies J’s judgment is expressed leads me to conclude that it is based on the affidavit evidence that was before her. That is, the only two parts of her Honour’s judgment concerning the creation and provision of false documents to the ATO, including the backdating of those documents to make them appear to be genuine, as covered by the s 128 certificate were the phrases “original minutes” and “from day one” (recorded by the court reporter as “from day 1”) in [112]. That difference between the judgment and the transcript supports the inference that Davies J was taking notes as the evidence was being given, most likely by reference to the affidavit that was before her Honour. On any view, the addition going beyond the information in Mr Incollingo’s affidavit was slight and of no importance to the issue that was before the Conduct Committee. Nor was it of any importance to the antecedent investigation. It was of importance to the other findings that her Honour made as to the underlying transactions not having taken place, which are not presently relevant.The scope of s 128 in relation to proceedings in an “Australian court”
Decision
Reasons for decision
Mr Incollingo also challenges the investigation continuing when he asked that it be terminated, and the finding that contraventions had taken place leading to the Sanction Decision, which may be described generally as the Related Decisions. The basis for Mr Incollingo’s challenges are an assertion that the Investigation Decision, the Sanction Decision and the Related Decisions were all invalid because each decision had been made by unlawfully using certain information against him. The information in question was obtained as a consequence of parts of the evidence he had given in cross-examination in a proceeding in this Court. The giving of that evidence by Mr Incollingo in cross-examination was protected from certain types of use or derivative use by a statutory protection bestowed by a certificate given to him by the presiding judge under s 128 of the Evidence Act 1995 (Cth) (s 128 certificate). Mr Incollingo relies on what he contends was use, or derivative use, of part of his evidence in cross-examination contrary to the protection given to him by the s 128 certificate. A problem for Mr Incollingo was that the same, or substantially the same, information was available and brought into existence well before he gave oral evidence in cross-examination, including from the affidavit upon which he was cross-examined, and was the primary express basis for both the Investigation Decision and the Sanction Decision. A further problem for him is that careful steps were taken to quarantine information and derivative information covered by the s 128 certificate from the ultimate makers of the Sanction Decision, being the Conduct Committee. For the reasons that follow, each challenge must fail and the originating application must be dismissed with costs. Mr Incollingo must also pay the Board’s costs of an unsuccessful interlocutory application he made, at the hearing of the originating application, for suppression or non-publication orders over the evidence he gave that was protected by the s 128 certificate, and documents that referred to that evidence.The regime under the Tax Agent Services Act 2009 (Cth) (TAS Act) The TAS Act, by its long title, was enacted to establish the Board and provide for the registration of tax agents and BAS agents and related purposes. Section 2-5 at that time stated: 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.(The term “tax (financial) advisers” has since been dispensed with in the TAS Act.) The TAS Act provides for registration of tax agents and BAS agents (Pt 2), a Code of Professional Conduct (Pt 3), termination of registration (Pt 4), civil penalties (Pt 5), and the establishment of the Board, including its functions and powers (Pt 6, comprising Div 60).
Ratio Decidendi
Legal Principle Established
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