FEDERAL COURT OF AUSTRALIA
Mendonca v Tax Practitioners Board [2019] FCA 1757
File number(s): NSD 329 of 2019 Judge(s): THAWLEY J Date of judgment: 24 October 2019 Catchwords: ADMINISTRATIVE LAW – challenge to a decision of the Tax Practitioners Board pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) – Board exercised discretion not to investigate conduct that may breach the Tax Agent Services Act 2009 (Cth) – whether jurisdictional error – whether Board understood nature or scope of the discretion – decision set aside Legislation: Administrative Decision (Judicial Review) Act 1977 (Cth)
Judiciary Act 1903 (Cth) s 39B
Tax Agent Services Act 2009 (Cth) ss 1-5, 20-5(1)(a), 30-10, 30-15, 30-20, 30-25, 30-30, 40-5(1)(b), 60-5, 60-10, 60-15, 60-20, 60-95, 60-100, 60-105, 60-110, 60-115, 60-125, 90-1
Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) s 17
Cases cited: Bringinshaw v Briginshaw (1938) 60 CLR 336
Cainv New South Wales Land and Housing Corporation (2014) 86 NSWLR 1
Hossainv Minister for Immigration and Border Protection 264 CLR 123
Mendonca v Tax Practitioners Board [2017] AATA 2177
Mendonca v Tax Practitioners Board [2018] FCA 1686
Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1
Minister For Immigration and Border Protection v SZMTA (2019) 363 ALR 599
Minister for Immigration and Border Protection v SZVFW (2018) 357 ALR 408
Plaintiff M64/2015 v MIBP (2015) 258 CLR 173
Pollard v RRR Corporation Pty Limited [2009] NSWCA 110
Public Service Board of New South Wales v Osmond (1986) 159 CLR 656
Shrestha v Minister for Immigration and Border Protection (2018) 264 CLR 151
Date of hearing: 24 October 2019 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 76 Counsel for the Applicant: The applicant appeared in person Counsel for the Respondent: Mr M Cleary Solicitor for the Respondent: Australian Government Solicitors ORDERS
NSD 329 of 2019 BETWEEN: GERARD MENDONCA
Applicant
AND: TAX PRACTITIONERS BOARD
Respondent
JUDGE:
THAWLEY J
DATE OF ORDER:
24 OCTOBER 2019
THE COURT ORDERS THAT:
1.The matter be listed for a case management hearing at 9.00am on 31 October 2019.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised from transcript)THAWLEY J:
OVERVIEW
This is an application for judicial review under the Administrative Decision (Judicial Review) Act 1977 (Cth) (ADJR Act) and s 39B of the Judiciary Act 1903 (Cth) of a decision made by the Tax Practitioners Board on 8 February 2019 (the Decision). The Decision was a decision by the Board not to investigate two complaints made by the applicant against Mr Clive Nelson and Ms Lauren McGinty.
BACKGROUND
From 2006 the applicant was an employee of Chan & Naylor Parramatta Pty Ltd, a company which provided accounting, taxation and wealth advisory services. Ms…
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- Case
- [2019] FCA 1757
- Decision Date
CaseChat Overview and Summary
The court examined the Board’s decision and found that it had considered the relevant evidence and applied its mind to the merits of the case. The court noted that the Board had correctly identified the underlying complaint as being the fitness and propriety of the two tax agents to be registered. The Board had considered the principle in Briginshaw and found that there was insufficient evidence to show that the two tax agents had given false or misleading evidence. The court also found that the Board had not misunderstood the nature or scope of its discretion. The court concluded that the Board had not made a jurisdictional error in exercising its discretion not to investigate the conduct of the two tax agents.
The court set aside the Board’s decision and remitted the matter back to the Board for reconsideration. The court noted that the Board had not considered the evidence of the two tax agents in a balanced and impartial manner and had failed to give sufficient weight to the applicant’s evidence. The court also noted that the Board had not adequately considered the implications of the findings of the District Court and other tribunals regarding the applicant’s credibility. The court ordered that the matter be listed for a case management hearing to allow the Board to reconsider its decision in light of the court’s findings.
Orders
Orders of the court
1. The matter be listed for a case management hearing at 9.00am on 31 October 2019.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
A registered tax agent may have their registration terminated if they cease to meet one of the “tax practitioner registration requirements”, including being a fit and proper person. Section 40-5(1)(b) provides:40-5 Termination of registration—individuals(1)If you are a *registered tax agent, BAS agent or tax (financial) adviser and an individual, the Board may terminate your registration if:(a)…(b)you cease to meet one of the *tax practitioner registration requirements; or … If the Board decides to investigate a person, it may exercise certain coercive powers, including the powers: to request the production of documents or things (s 60-100); to require witnesses to appear before the Board (s 60-105); and to take evidence on oath or affirmation (s 60-110). The Act does not provide a mechanism for making or dealing with complaints. The only reference in the Act to the concept of a complaint is that the Board must notify a “complainant (if any)” of the outcome of an investigation – see: s 60-125(8)(c)(ii). THE BOARD’S DECISION The Board identified the subject matter of the complaints against Mr Nelson and Ms McGinty as relating to an allegation that they gave false and misleading evidence to the District Court. It is evident from the Board’s reasons that it understood the underlying complaint being made concerned the fitness and propriety of Mr Nelson and Ms McGinty to be registered in accordance with the Act. The Board noted that, under s 60-95(1), it could investigate, amongst other matters, conduct that may breach the Act or matters that were prescribed by regulation. The Board decided that it would not commence an investigation into the allegations made by the applicant against Mr Nelson and Ms McGinty. The matters which it referred to in its reasons for making that decision included:The conduct alleged by you against Mr Nelson and Ms McGinty could give rise to potential breaches of the Code (such as section 30-10(1), which requires a tax agent act with honesty and integrity). As you correctly asserted, these provisions reach beyond the delivery of tax agent services.However, considering the principle in Briginshaw, there is insufficient evidence that Mr Nelson or Ms McGinty contravened the Code. In particular:•On its own, the fact that Mr Nelson or Ms McGinty gave evidence which contradicts yours is not proof that either Mr Nelson or Ms McGinty gave false or misleading evidence;•Mr Nelson’s affidavit of 2 October 2013 and Ms McGinty’s affidavit of 11 September 2013 do not materially depart from the evidence led during your proceedings against Chan & Naylor Parramatta;•To the extent that Mr Nelson and Ms McGinty’s evidence in Court differs from their affidavits, the Board is satisfied that Mr Nelson and Ms McGinty gave reasonable explanations for those differences;•Of particular relevance to your case:oYou and Mr Nelson offered conflicting views of your job interview in 2006, during which you say you were shown a copy of the Bonus Calculator;oOther conversations occurring between Mr Nelson and Mr Mendonca were only witnessed by Mr Brian D’Syla, who did not given evidence to the District Court and cannot be located in ATO records;oThe Bonus Calculator shown to you during your performance review meeting in January 2008 had been prepared with “a set of hypothetical numbers” (Nelson affidavit, para 34). This does not conflict with Mr Nelson’s later evidence of later producing the Bonus Calculator in an email to staff which was “in blank form” (Nelson affidavit, para 35);oYour evidence that there was an earlier Bonus Policy which existed around 19 November 2006 is not supported by the sworn evidence of at least four other Chan & Naylor employees (Mr Nelson, Ms McGinty, Mr Keniry and Mr Naylor);oIn particular, Mr Keniry’s evidence was accepted without objection and was subject to little cross-examination, which supports the possibility that the Bonus Policy document indeed did not exist prior to 11 July 2007;oYour evidence that you were not at a client managers’ meeting in September 2007 to discuss/agree with all client-managers (Gerard Mendonca, Lauren McGinty, Elizabeth Pizzardi, Man Lai and Neetu Shankar) to adopt the Bonus Policy of 11 July 2007 conflicts with Mr Nelson’s evidence. Ms McGinty was not cross-examined about this meeting and Ms Pizzardi, Ms Lai and Ms Shankar were not called as witnesses.The Board also considers the following to be relevant:•Her Honour Judge Balla made formal findings in the District Court that she was not prepared to accept your evidence at face value, on the basis of a number of inconsistencies in both your conduct during the events at Chan & Naylor Parramatta from 2006 to 2012, and the evidence led during your proceedings;•Your wife, Ms Renuka Mendonca, is not a suitably dispassionate witness to have sufficient weight applied to her evidence. In the District Court proceedings, she accepted that the bonus calculator she saw in 2008 contained numbers;•Mr Brian Gregory D’Sylva cannot be located on the details currently available;•Mr Hais (Hassam) Safetli was not called during the District Court proceedings, and the anecdotal suggestion that Mr Safetli was a person convicted of a serious crime makes his evidence less likely to be reliable;•ATO guidance on records retention, which the Board adopts, is that tax records only need to be retained for five years. Given the effluxion of time, seeking a copy of any form of the Bonus Calculator from Chan & Naylor Parramatta is unlikely to be successful, and has already been subject to the Court’s compulsory powers;•The District Court of NSW, Federal Circuit Court and Fair Work Commission have all, in separate decisions over a protracted period, concluded that you are not a reliable witness. Your evidence has often been tested in the face of sufficiently impressive and independent witnesses, and found to be not credible.