Lunn and Tax Practitioners Board (Practice and procedure) - [2025] ARTA 697

Lunn and Tax Practitioners Board (Practice and procedure) [2025] ARTA 697 (3 June 2025)
Applicant/s:  Jeff Lunn and Gregoriades Sofocleous & Associates Pty Ltd
Respondent:  Tax Practitioners Board
Tribunal Number:                2024/9928; 2024/9962

Tribunal:General Member Darian-Smith
Place:Sydney
Date: 3 June 2025

Decision:The Tribunal refuses the Applicant’s application for an order in each of these matters under s.32(2) of the Administrative Review Tribunal Act 2024 (Cth) staying the operation or implementation of the decisions of the Respondent dated 3 October 2024. The interim stay order made on 20 February 2025 is discharged.

................................[SGD]........................................
General Member Darian-Smith
Catchwords
PRACTICE AND PROCEDURE – termination of tax agents’ registration and imposition of two-year ban – application for an order staying operation or implementation of banning order – factors relevant to the grant of a stay – prospects of success – consequences for applicant of refusal of a stay – the public interest – application for stay order refused
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) s.41
Administrative Review Tribunal Act 2024 (Cth) s.32
Taxation Administration Act 1953 (Cth) s350-10 of Schedule1
Tax Agent Services Act 2009 (Cth) ss. 2-5, 20-5, 20-15, 30-10, 30-15, 30-20,30-25,30-30, 40-5, 40-25, 60-95
Cases
Birdseye and Tax Practitioners Board [2020] AATA 1250; 82 AAR 241
Cross and Tax Practitioners Board (2020) 171 ALD 337; [2020] AATA 1471
Greenfield Education Pty Ltd and Australian Skills Quality Authority [2018] AATA 4210
Hanieh and Tax Practitioners Board [2024] AATA 3251
Hopfner and Tax Practitioners Board [2019] AATA 851
Iseppi and Tax Practitioners Board (2020) 169 ALD 653; [2020] AATA 1523
Mclean and Australian Securities and Investments Commission [2016] AATA 22
Poidevin and Australian Securities and Investments Commission [2018] AATA 124
Re Oaklands and Australian Securities and Investments Commission [2011] AATA 199
Re Scott and Australian Securities and Investments Commission (2009) 51 AAR 114; [2009] AATA 798
Taxation Guru Pty Ltd & Anor and Tax Practitioners Board (2019) 166 ALD 5628; [2019] AATA 3249
Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047
Thomas and Tax Practitioners Board [2023] AATA 757
Statement of Reasons

On 3 October 2024, the Respondent (Board) made decisions:
a.terminating the tax agent registration of Mr Lunn (Applicant in application 2024/9928) under s. 40-5(1)(b) Tax Agent Services Act 2009 (Cth) (TASA) and imposing a period of two years from the date the termination takes effect within which he may not apply for registration under s.40-25(1) of the TASA (Lunn Decision).
b.terminating the tax agent registration of Gregoriades Sofocleous & Associates Pty Ltd (GSA) (Applicant in application 2024/9962) under s.40-15(1)(b) Tax Agent Services Act 2009 (Cth) (TASA) and imposing a period of two years from the date the termination takes effect within which it may not apply for registration under s.40-25(1) of the TASA (GSA Decision).
Collectively the Lunn Decision and the GSA Decision are referred to as the Reviewable Decisions.
The Reviewable Decisions were the outcome of the Board’s investigation…

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: [2025] ARTA 697
Decision Date: 3 June 2025

CaseChat Overview and Summary

The case involves Mr. J. Lunn and the Tax Practitioners Board, where Mr. Lunn applied for a stay on the termination of his tax agent registration and the imposition of a two-year ban. The application for a stay was heard and dismissed by the Administrative Appeals Tribunal. The primary legal issue was whether the Tribunal should grant an order staying the operation or implementation of the banning order. The court needed to consider the factors relevant to granting a stay, including the prospects of success on the merits, the consequences for the applicant of refusal of a stay, and the public interest.

The Tribunal found that while the Applicants would suffer some financial loss if the stay was not granted, it was not a case where the applications for review would be rendered nugatory or pointless if the stay applications were refused. The Tribunal concluded that the weight of the relevant factors, particularly the public interest, was against granting stay orders. The Tribunal noted that programming orders to progress the matter to a substantive hearing had already been made and that any prejudice to the Applicants would be best managed by working with the Tribunal to have the substantive proceedings heard and determined as soon as possible.

The Tribunal ultimately decided that the relief sought in the Stay Applications must be refused. The Stay Applications were refused, and the Interim Stay Order was discharged. The Tribunal's decision highlights the importance of considering the public interest and the prospects of success on the merits when deciding whether to grant a stay in such cases.

Orders

Orders of the court

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Background

Background to the litigation

Termination of an individual tax agent’s registration occurs under Subdivision 40-A of the TASA. Relevantly, the Applicant’s registration can be terminated under s.40-5(1)(b), in circumstances where he ceased to meet one of the tax practitioner registration requirements, including that he be a “fit and proper person” under s. 20-5(1) (a) of the TASA. If a tax agent’s registration is terminated, the Board can determine the period, not exceeding 5 years, during which the tax agent cannot re-apply for registration.[4][4] TASA s.40-25(1).FACTUAL BACKGROUND OF THE REVIEWABLE DECISION The Board relied on extensive evidence in making the Lunn Decision. The findings as to Mr Lunn’s alleged breaches of the Code are summarised in some detail in the Respondent’s Submissions (RS) as follows: a.Code, s.30-10(1) – failing to act honestly and with integrity: RS [12]. The breaches relied on by the Board included Mr Lunn having made false and misleading statements to the Commissioner in his capacity as a tax agent and as trustee for the Lunn Family Trust, and his preparing and lodging 14 income tax returns (ITRs) which included excessive or incorrect deduction claims. b.Code, s.30-10(2) – failing to comply with taxation laws in conduct of personal affairs: RS [13]. The breaches relied on by the Board included failing to properly complete aspects of the Lunn Family Trust’s BAS and underreporting net income in the Lunn Family Trust’s ITR. c.Code, s.30-10(7) – failing to ensure tax agent services provided competently: RS [14]. The breaches relied on included matters arising from the lodging of ITRs for his clients Ms Kakarla and Mr Nemani and lodging client ITRs with excessive or incorrect WRE deductions claimed. d.Code, s.30-10(9) – failing to take care in ascertaining client affairs: RS [15] – [16]. The failures to take care related to the ITRs lodged for Ms Kakarla and Mr Nemani and the ITRs lodged for 14 clients (referred to in (a) above). and e.Code, s.30-10(10) – failing to take reasonable care in ensuring tax laws applied correctly: RS [17]. The failures relied on by the Board principally related to the ITRs lodged for 14 clients (referred to in (a) above). The breaches of the Code by Mr Lunn led to the determination by the Board that he had ceased to meet the tax practitioner requirement under s.20-5(1)(a) of the TASA that he is a fit and proper person[5] and that he was no longer of good fame, integrity and character under s.20-15(a) of the TASA.[6][5] Respondent’s Submissions, [18(a)].[6] Respondent’s Submissions, [18(b)]. As the result of the Lunn Decision, the Board was satisfied that GSA had ceased to meet the tax practitioner registration requirements under s. 20-5(3)(a) of the TASA, which facilitated the GSA Decision. The Applicant’s Submissions make it clear that Mr Lunn intends to put on evidence about several matters at the substantive hearing, which include: a) as to the audits carried out by the ATO which identified excessive or incorrect claims in the ITRs for 14 clients. b) the issues arising from the ITRs lodged for Ms Kakarla and Mr Nemani. c) factual matters going to competence, including systems and procedures and internal controls introduced to the GSA business. and d) issues for the business arising from the COVID pandemic and personal issues, including health issues of his partner.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Tribunal accepts that the Applicants will suffer some financial loss if the stay is not granted, but this is not a case where their applications for review will be rendered nugatory or pointless if their stay applications are refused.CONCLUSION AND DECISION For the Reasons set out above, the Tribunal has determined that the weight of the relevant factors, particularly the public interest factor, is against the granting of stay orders. The relief sought in the Stay Applications must be refused. Any prejudice to the Applicants which flows from the Tribunal refusing the Applicants’ applications for a stay will be managed best by the parties working with the Tribunal to have the substantive proceedings heard and determined as soon as that can sensibly be achieved. The Tribunal notes that programming orders to progress the matter to a substantive hearing have already been made. It follows that the Stay Applications are refused, and the Interim Stay Order is discharged.Date of Hearing: 19 May 2025Date of Decision: 29 May 2025Applicants: Mr J. Lunn (self-represented/representing GSA Pty Ltd)Counsel for the Respondent: Mr L. MolesworthSolicitors for the Respondent: Ms J Mills, Mr A Seremitis (Tax Practitioners Board)

Ratio Decidendi

Legal Principle Established

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