Kolya v Tax Practitioners Board

Case [2012] FCA 215

FEDERAL COURT OF AUSTRALIA

Kolya v Tax Practitioners Board [2012] FCA 215

Citation: Kolya v Tax Practitioners Board [2012] FCA 215
Appeal from: Re Kolya and Tax Practitioners Board [2011] AATA 804
Parties: PETER KOLYA v TAX PRACTITIONERS BOARD AND ANOR
File number: ACD 73 of 2011
Judge: FLICK J
Date of judgment: 13 March 2012
Catchwords:

ADMINISTRATIVE LAW – the fact finding role of the Administrative Appeals Tribunal – the adequacy of reasons provided – findings on material questions of fact

PRACTICE AND PROCEDURE – need to identify a question of law – the jurisdiction of the Court on appeal

Legislation: Administrative Appeals Tribunal Act 1975 (Cth) ss 37, 39, 43, 44
Income Tax Assessment Act 1936 (Cth) Part VIIA, Div 2, s 251K
Migration Act 1958 (Cth) s 430
Tax Agent Services Act 2009 (Cth) ss 20-5, 20-15, 20-25, 40-5, 90
Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) Schedule 2, Item 13
Income Tax Regulations 1936 (Cth) reg 156
Federal Court Rules (Cth) O53, r 3
Federal Court Rules 2011 (Cth) r 33.12
Cases cited: Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244, 33 FCR 290, cited.
Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232, 76 ALD 321, cited.
Brown v Repatriation Commission (1985) 7 FCR 302, considered.
Cameron v Commissioner of Taxation [2011] FCA 1378, cited.
Caporale v Commissioner of Taxation [2012] FCA 86, cited.
Commissioner of Taxation v Osborne (1990) 26 FCR 63, cited.
Condell v Commissioner of Taxation [2007] FCAFC 44, [2007] ATC 4404, cited.
De Simone v Federal Commissioner of Taxation [2009] FCAFC 181, 51 AAR 161, cited.
Dean v Australian Postal Corporation [2010] FCA 680, 52 AAR 54, cited.
Dodds v Comcare Australia (1993) 31 ALD 690, cited.
Goodricke v Comcare [2011] FCA 694, 122 ALD 546, cited.
Hughes and Vale Proprietary Limited v State of New South Wales (No 2) (1955) 93 CLR 127, considered.
Kenso Marketing (M) SDN BHD v Chief Executive Officer of Customs [2011] FCAFC 26, cited.
Kolya and Tax Practitioners Board, Re [2011] AATA 804, affirmed.
Kowalski v Military Rehabilitation and Compensation Commission [2010] FCAFC 10, cited.
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30, 206 CLR 323, cited.
Pleno v Tax Practitioners Board [2010] FCA 1196, cited.
Rana v Military Rehabilitation and Compensation Commission [2011] FCAFC 80, 55 AAR 300, cited.
Repatriation Commission v Cotton [2006] FCA 1523, 93 ALD 118, cited.
Secretary, Department of Education, Employment and Workplace Relations v Ergin [2010] FCA 1438, 119 ALD 155, cited.
Secretary, Department of Family and Community Services v Verney [2000] FCA 570, 60 ALD 737, cited.
Selway v Minister for Infrastructure, Transport, Regional Development and Local Government [2011] FCA 43, 120 ALD 40, cited.
Stasos v Tax Agents’ Board (1990) 21 ALD 437, cited.
Su and Tax Agents’ Board…

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AGLC
Kolya v Tax Practitioners Board [2012] FCA 215
Case
[2012] FCA 215
Decision Date

CaseChat Overview and Summary

The case of Kolya v Tax Practitioners Board involved an appeal by Mr Kolya against decisions of the Administrative Appeals Tribunal (AAT) which had rejected his application for transitional registration as a tax agent. The AAT had concluded that Mr Kolya was not a fit and proper person for registration. The Federal Court of Australia was tasked with determining whether the AAT had erred in law and whether additional findings of fact should be made. The court examined the AAT's compliance with procedural fairness and its adherence to the legislative provisions governing the registration of tax agents.

The primary legal issues before the court were whether the AAT had correctly applied the transitional provisions and the current legislative framework in assessing Mr Kolya's application and whether the AAT's findings were legally sound. The court also had to consider whether it had the jurisdiction to make additional findings of fact, as requested by Mr Kolya. The court's reasoning was rooted in its understanding of the scope of its appellate jurisdiction under the Administrative Appeals Tribunal Act and its power to make findings of fact under specific statutory provisions.

The court held that neither of the questions of law identified by Mr Kolya had merit and dismissed his appeal. It found that the AAT had appropriately applied the relevant legislative provisions in rejecting Mr Kolya's application for registration. The court also determined that it did not have the jurisdiction to make the additional findings of fact that Mr Kolya had requested, as these were not necessary for resolving the appeal and would not expedite the resolution of the matter. The court concluded that the AAT had not denied Mr Kolya procedural fairness, as he had not availed himself of the opportunity to inspect the relevant documents and make submissions. Consequently, the appeal was dismissed, and Mr Kolya was ordered to pay the respondents' costs.

The court's decision underscores the importance of correctly applying current legislation in administrative decision-making processes and the limited scope of the Federal Court's jurisdiction in appellate matters from the AAT. The court's ruling reinforces the principle that the AAT is not obliged to ensure parties take full advantage of procedural opportunities and that the court's role is confined to resolving questions of law arising from the AAT's decisions.

Orders

Orders of the court

1. The Amended Notice of Appeal as filed on 7 February 2012 is dismissed.

2. The Applicant is to pay the costs of the Respondents.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The argument is without substance. THE FINDINGS OF ADDITIONAL FACTS The rejection of both of the Questions of Law relied upon by Mr Kolya probably makes it unnecessary to address that part of the Amended Notice of Appeal which invites the Court to make two additional findings of fact as sought by Mr Kolya. The Amended Notice of Appeal set forth as follows (again without alteration) the findings of fact which he invited this Court to make:Findings of fact that the Court is asked to make1.[specify each finding]. INTEREST TO THE INDUSTRY, GOVERNMENT AND THE PUBLIC.2.THAT IT WAS ONLY APPROPRIATE FOR THE COURT, RATHER THAN THE TRIBUNAL TO MAKE THE FINDINGS OF FACT GIVEN THE PRECEDENTIAL VALUE AND NATURE OF THE MATTER. The ability to identify in a Notice of Appeal any additional findings of fact which an applicant seeks the Court to make is an innovation effected by Rule 33.12(2)(c) of the Federal Court Rules 2011. It had no counterpart in the now repealed O 53 r 3 of the now-repealed Rules. The form of a Notice of Appeal prescribed in Form 75 accommodates this innovation. The ability to now expressly identify proposed additional findings of fact, however, should not be seen by applicants – especially unrepresented applicants – as a “box” that necessarily needs to be “filled in”. It is constantly to be recalled that the jurisdiction of this Court when entertaining an “appeal” pursuant to s 44 of the Administrative Appeals Tribunal Act is confined to the resolution of the questions of law which have been identified. The Court has no general jurisdiction to thereafter proceed to make additional findings of fact which it or another Tribunal differently constituted may have made. The only power that this Court has to make additional findings of fact when entertaining an appeal is that conferred by s 44(7) of the Administrative Appeals Tribunal Act. That subsection provides as follows:If a party to a proceeding before the Tribunal appeals to the Federal Court of Australia under subsection (1), the Court may make findings of fact if: (a)the findings of fact are not inconsistent with findings of fact made by the Tribunal (other than findings made by the Tribunal as the result of an error of law); and (b)it appears to the Court that it is convenient for the Court to make the findings of fact, having regard to: (i)the extent (if any) to which it is necessary for facts to be found; and (ii)the means by which those facts might be established; and (iii)the expeditious and efficient resolution of the whole of the matter to which the proceeding before the Tribunal relates; and (iv)the relative expense to the parties of the Court, rather than the Tribunal, making the findings of fact; and (v)the relative delay to the parties of the Court, rather than the Tribunal, making the findings of fact; and (vi)whether any of the parties considers that it is appropriate for the Court, rather than the Tribunal, to make the findings of fact; and (vii)such other matters (if any) as the Court considers relevant. Section 44(7) is not to be understood as enabling this Court on appeal “to exercise the discretion of the decision-maker” (Selway v Minister for Infrastructure, Transport, Regional Development and Local Government [2011] FCA 43 at [46], 120 ALD 40 at 50 per Mansfield J) and cannot be relied upon to “alter the jurisdiction of the Court or widen the issues to be decided” (Condell v Commissioner of Taxation [2007] FCAFC 44 at [14] [2007] ATC 4404 at 4408 per Gyles J, with whom Kenny and Allsop JJ agreed). Where credibility findings have been made, the Court has previously considered it not appropriate to itself make factual findings pursuant to s 44(7): Repatriation Commission v Cotton [2006] FCA 1523 at [35], 93 ALD 118 at 126 per Rares J.

Evidence

Evidence Before The Court

For present purposes it may be readily accepted that the Tribunal is bound to comply with the common law rules of procedural fairness. Reference should also be made to s 39 of the Administrative Appeals Tribunal Act which relevantly provides as follows:Opportunity to make submissions concerning evidence(1)Subject to sections 35, 36 and 36B, the Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case and, in particular, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to those documents. (2)…The obligation imposed by s 39 is to ensure that every party “is given a reasonable opportunity to present his or her case”; it does not mean that the Tribunal has to ensure that a party takes the “best advantage” of that opportunity: Secretary, Department of Family and Community Services v Verney [2000] FCA 570 at [45], 60 ALD 737 at 748. See also: Sullivan v Department of Transport (1978) 20 ALR 323 at 343; 1 ALD 383. Deane J (with whom Fisher J agreed) there observed at 403 that “[n]either the Act nor the common law imposes upon the Tribunal the impossible task of ensuring that a party takes the best advantage of the opportunity to which he is entitled”: De Simone v Federal Commissioner of Taxation [2009] FCAFC 181 at [15], 51 AAR 161 at 167 per Sundberg, Stone and Edmonds JJ; Kenso Marketing (M) SDN BHD v Chief Executive Officer of Customs [2011] FCAFC 26 at [45] per Keane CJ, Downes and Gordon JJ; Caporale v Commissioner of Taxation [2012] FCA 86 at [45] per Robertson J. The argument as to procedural unfairness was not developed by Mr Kolya other than to contend that the Tribunal was biased against him. Brief reference was made as to the availability of the transcript of the proceeding before the Tribunal. But it was not tendered and Mr Kolya made no reference to it in submissions. Given that Mr Kolya, however, is unrepresented, it was reviewed subsequent to the hearing to see if there was any basis for Mr Kolya’s contention. Had such a basis emerged it would, of course, have been necessary to thereafter provide the Tax Practitioners Board an opportunity to respond. But no basis emerged. The argument is without substance. THE FINDINGS OF ADDITIONAL FACTS The rejection of both of the Questions of Law relied upon by Mr Kolya probably makes it unnecessary to address that part of the Amended Notice of Appeal which invites the Court to make two additional findings of fact as sought by Mr Kolya. The Amended Notice of Appeal set forth as follows (again without alteration) the findings of fact which he invited this Court to make:Findings of fact that the Court is asked to make1.[specify each finding]. INTEREST TO THE INDUSTRY, GOVERNMENT AND THE PUBLIC.2.THAT IT WAS ONLY APPROPRIATE FOR THE COURT, RATHER THAN THE TRIBUNAL TO MAKE THE FINDINGS OF FACT GIVEN THE PRECEDENTIAL VALUE AND NATURE OF THE MATTER.

Decision

Reasons for decision

Neither of the two purported further “findings of fact” identified by Mr Kolya can be – or should be – made.CONCLUSIONS Each of the two Questions of Law, however they may have been better expressed, is to be resolved against Mr Kolya. Nor has there been any denial of procedural fairness or denial of the opportunity set forth in s 39 of the Administrative Appeals Tribunal Act. His appeal is to be dismissed. It is unnecessary to resolve the Amended Interlocutory Application as filed in February 2012. There is no reason why Mr Kolya should not pay the costs of the Respondents.ORDERSThe Orders of the Court are:1.The Amended Notice of Appeal as filed on 7 February 2012 is dismissed.2.The Applicant is to pay the costs of the Respondents.

Ratio Decidendi

Legal Principle Established

Item 13 provides as follows:Special rule for applications for registration as a registered tax agent (1)If: (a) an entity applies for registration as a registered tax agent under section 20‑20 of the new law before the end of the 6 month period beginning immediately after commencement; and (b) the entity would be eligible for registration but for the operation of: (i)paragraph 20‑5(1)(b) of the new law (which requires the Board to be satisfied of requirements prescribed by regulations, including requirements in relation to qualifications and experience in respect of registration as a registered tax agent); or (ii)paragraph 20‑5(2)(c) or (3)(d); and (c) immediately before commencement, the entity was providing a tax agent service within a particular area of the taxation laws; and (d) the Board is satisfied that the entity had been providing that tax agent service to a competent standard for a reasonable period before making the application; then, despite paragraph 20‑5(1)(b), (2)(c) or (3)(d) of the new law, the entity is eligible for registration.These transitional arrangements, it will be noted, do not remove the requirement that a person be a “fit and proper person” within the meaning of and for the purposes of s 20-5(1)(a). THE LAW WHICH WAS APPLIED According to the documents filed with the Tribunal pursuant to s 37 of the Administrative Appeals Tribunal Act1975 (Cth), the Tax Practitioners Board:·received an application from Mr Kolya seeking transitional registration as a tax agent on 3 March 2010; and·received notification from Mr Kolya on 11 March 2010 that he was providing BAS services immediately prior to 1 March 2010. It was on 6 October 2010 that the Tax Practitioners Board advised Mr Kolya of its decision to reject his application as a tax agent. The Board’s reasons record that it considered his application “under section 20-5 of the [Tax Agent Services Act 2009] and in accordance with Item 13 of Part 3 of Schedule 2 (special rule 13) of the [Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009] …”. Those reasons also refer to s 20-25(1) and concluded that “the Board is not satisfied that you are a fit and proper person …”. The Tax Practitioners Board also advised Mr Kolya on 20 December 2010 of its decision to terminate his registration as a BAS agent pursuant to s 40-5(1)(b) of the Tax Agent Services Act because he had “ceased to meet the tax practitioner registration requirement that you are a fit and proper person”. The first Question of Law as advanced by Mr Kolya refers to the “Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009 (Cth)” and “REGULATION 156 OF THE OLD LAW”. Counsel for the Tax Practitioners Board rightly accepted that this question could – if reframed – satisfy the requirements of s 44(1) of the Administrative Appeals Tribunal Act. It could be reframed to direct attention to whether or nor the Tribunal correctly applied the transitional provisions and the current legislation as opposed to the law that prevailed prior to 1 March 2010. It was understood that Mr Kolya sought to contend that the Tribunal had not applied the current legislation.