Kishore and Tax Practitioners Board - [2016] AATA 764

Kishore and Tax Practitioners Board [2016] AATA 764 (30 September 2016)

Division

TAXATION & COMMERCIAL DIVISION

File Number(s)

2014/5796

Re

Kamal Kishore

APPLICANT

And

Tax Practitioners Board

RESPONDENT

DECISION

Tribunal
Deputy President S E Frost

Date 30 September 2016

Place Sydney
1.    Threshold questions answered by the Tribunal as set out in the following reasons.

2.    List the matter for directions at the earliest opportunity.

...........................[sgd].............................................
Deputy President S E Frost
Catchwords
TAX AGENTS – Code of Professional Conduct – tax agent registration terminated – whether conduct complained of by Respondent is a ‘tax agent service’ – whether the identified conduct, even if not a ‘tax agent service’, can amount to a breach of the Code of Professional Conduct – whether Board’s power delegated properly – whether committee of the Board acting with appropriate delegation – threshold questions dealt with by Tribunal
Legislation
Tax Agent Services Act 2009, ss 2-5, 30-10, 60-85, 60-95, 60-100, 60-105, 60-110, 60-115, 60-125, 90-1, 90-5
Cases
Charltons CJC Pty Ltd v Fitzgerald [2013] NSWSC 350
Charltons CJC Pty Ltd v Fitzgerald (No 2) [2013] NSWSC 958
Charltons CJC Pty Ltd v Fitzgerald (No 2) (Unreported, Supreme Court of NSW, Pembroke J, 20 August 2013)
Charltons CJC Pty Ltd v Fitzgerald (No 3) [2013] NSWSC 1945
Charltons CJC Pty Ltd v Fitzgerald (No 4) [2014] NSWSC 523
REASONS FOR DECISION
Deputy President S E Frost
30 September 2016
INTRODUCTION

Kamal Kishore became a registered tax agent on 7 March 2011 while working for his employer, Charltons CJC Pty Ltd (Charltons), a firm that provides accounting and tax agent services to its clients.
In July 2012 Mr Kishore and two of his colleagues at Charltons – Alden Fitzgerald and Kirat Prasad – registered a new company, Intuitive Accountants and Associates Pty Ltd (Intuitive), with each of them becoming a director and equal shareholder of that company. The three men resigned from Charltons and started working for Intuitive. Intuitive was registered as a tax agent the following month.
By letter dated 10 October 2014 the Tax Practitioners Board (the Board) notified Mr Kishore that it had decided to terminate his registration as a tax agent, with effect from 14 November 2014. The Board’s decision was based upon its becoming satisfied that Mr Kishore had breached s 30-10(1) of the Tax Agent Services Act 2009 (the Act) by not acting honestly and with integrity towards Charltons around the time he left that firm, in the circumstances described by Pembroke J in the Supreme Court of New South Wales in Charltons CJC Pty Ltd v Fitzgerald [2013] NSWSC 350.
Mr Kishore has applied to the Tribunal for review of the Board’s decision to terminate his registration as a tax agent.
THRESHOLD QUESTIONS TO BE DECIDED
Mr Kishore considers that his behaviour in relation to his separation from Charltons is not behaviour of a kind that the Board should, or even can, concern itself with. He says that the Code of Professional Conduct contained…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] AATA 764
Decision Date: 30 September 2016

CaseChat Overview and Summary

This matter concerned an appeal by Mr Kishore against a decision by the Tax Practitioners Board to terminate his registration as a tax agent. The dispute centred on whether Mr Kishore's conduct, as established in five judgments of the NSW Supreme Court, constituted a breach of the Code of Professional Conduct. Mr Kishore conceded that he had made admissions regarding most of the conduct complained of by the plaintiff in the Supreme Court proceedings.

The primary legal issues before the court were whether the conduct identified by the Board qualified as a "tax agent service" under the relevant legislation, and if not, whether such conduct could still amount to a breach of the Code of Professional Conduct. Additionally, the court was required to consider whether the Board's power had been properly delegated and if a committee of the Board had acted with appropriate delegation. These were considered threshold questions for the Tribunal.

The court rejected Mr Kishore's submission that the Board should be confined to relying only on the specific wording of the notification letter or the Statement of Issues, Facts and Contentions. The court found that the notification letter, when read in its entirety, clearly indicated the breadth and specificity of the Board's concerns, which were grounded in the findings of the Supreme Court. The court determined that the Board was entitled to rely on the totality of Mr Kishore's conduct as described and characterised in the Supreme Court judgments.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In its written submissions on the ‘threshold/preliminary questions’, at [5], the Board says it relies upon ‘the totality of the conduct engaged in by [Mr Kishore] as described and characterised in the 5 judgments of the NSW Supreme Court’. Those five judgments are:·Charltons CJC Pty Ltd v Fitzgerald [2013] NSWSC 350 (First judgment);·Charltons CJC Pty Ltd v Fitzgerald (No. 2) [2013] NSWSC 958 (Second judgment);·Charltons CJC Pty Ltd v Fitzgerald No. 2 (Unreported, Supreme Court of NSW, Pembroke J, 20 August 2013) (Third judgment);·Charltons CJC Pty Ltd v Fitzgerald (No. 3) [2013] NSWSC 1945 (Fourth judgment);·Charltons CJC Pty Ltd v Fitzgerald (No. 4) [2014] NSWSC 523 (Fifth judgment). The submissions continue, at [6], by setting out ‘the findings in respect of the Applicant’s conduct upon which [the Board] particularly relies, along with the Supreme Court’s findings in respect of the circumstances in which that conduct occurred, and its characterisation of that conduct’. There follow 14 sub-paragraphs, over almost five pages, of identified behaviour – most of it sourced to the First judgment or the Second judgment – and then at [7] the following:Importantly, the defendants [Mr Kishore and his two colleagues] admitted most, but not all, of the conduct of which the plaintiff [Charltons] complained, and the dispute between the parties was primarily directed at the plaintiff’s entitlement to relief.[1] The Applicant, in this proceeding, concedes that ‘it is fair … to conclude that such admissions as his Honour is referring to, insofar as they are relevantly sheeted home to the applicant, were made by the applicant.’[2] (Footnotes in the original)[1] First judgment at [1]; T3-35 to 36. See also [8] (T3-38) and [10] (T3-39)[2] Transcript Day 2, p84 lines 11-13 Mr Kishore submits that the Board should not be allowed to rely on the matters, facts and circumstances detailed in [5]-[7] of the Board’s written submissions on the ‘threshold/preliminary questions’ to the extent that they do not reflect either:(a)the statement in the notification letter dated 10 October 2014, namely:The Board was satisfied, on the balance of probabilities, that you had breached subsection 30-10(1) of [the Act], by not acting honestly and with integrity, towards your former (registered company tax agent) employer, Charltons CJC Pty Ltd;or (as a secondary, alternative submission):(b)the facts set out by the Board in the Statement of Issues, Facts and Contentions of the Respondent, filed with the Tribunal on 24 July 2015 (RSIFC). I reject Mr Kishore’s submission insofar as it attempts to confine the Board as specified in (a) above. That particular sentence needs to be read in context; it is immediately followed by a paragraph of commentary grounding the Board’s position in specified findings of Pembroke J in the First judgment. There could be no doubt, reading the notification letter in its entirety, as to the breadth, but also the specificity, of the Board’s concerns.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Division	TAXATION & COMMERCIAL DIVISION
File Number(s)	2014/5796
Re	Kamal Kishore
APPLICANT
And	Tax Practitioners Board
RESPONDENT

Tribunal	Deputy President S E Frost
Date	30 September 2016
Place	Sydney