Modini and Tax Agents' Board of Queensland

[2007] AATA 1921

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1921

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/1497

GENERAL ADMINISTRATIVE DIVISION		)
Re		DENISE MODINI

Applicant

And TAX AGENTS' BOARD OF QUEENSLAND

Respondent

DECISION

Tribunal Deputy President P E Hack SC

Date2 November 2007

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

............................

Deputy President

CATCHWORDS

TAX AGENTS – application for registration –whether applicant a fit and proper person to prepare income tax returns - whether applicant of good fame, integrity and character – whether applicant satisfied practical and academic requirements –– capacity of the applicant to deal with tax officers - decision under review affirmed

Income Tax Assessment Act 1936 (Cth) – ss 251C, 251J, 251JA, 251BC

Income Tax Regulations 1936 – s 156

Re Modini and Tax Agents’ Board (Qld) [2004] AATA 427; [2004] ATC 2062; 55 ATR 1150

Modini v Tax Agents’ Board (Qld) [2005] FCA 570; (2005) 59 ATR 241

Re Modini and Tax Agents’ Board (Qld) [2005] AATA 1200; [2006] ATC 2001; 61 ATR 1115

Modini v Tax Agents’ Board of Qld [2006] FCA 797

Stasos v Tax Agents’ Board (NSW)  90 ATC 4950; (1990) 21 ATR 974

Su v Tax Agents’ Board (SA) (1982) 61 FLR 1

Case 5/2004 [2004] ATC 168; (2004) 56 ATR 1006

Tax Agents’ Board of Queensland v Seymour (1990) 21 FCR 357

Re Egulian and Tax Agents’ Board of New South Wales 91ATC 2060; (1991) 22 ATR 3542

Shi v Migration Agents’ Registration Authority (2007) 158 FCR 525

Re Webb and Tax Agents’ Board of Queensland (1992) 24 ATR 1095

King and Tax Agents’ Board of New South Wales 92 ATC 2101; (1994) 28 ATR 1047

Hughes and Vale Pty Ltd v The State of New South Wales (No 2) (1955) 93 CLR 127

REASONS FOR DECISION

2 November 2007   Deputy President P E Hack SC    

Introduction

1.This is an application by Ms Denise Modini who seeks review of the decision of the respondent, the Tax Agents’ Board of Queensland, to refuse her application, made on or about 26 September 2006, for registration as a tax agent. Whilst the legislation requires that an application be made in the “approved form”, the Board, presumably having regard to the history of dealings between Ms Modini and it, treated a letter dated 24 September 2006 as Ms Modini’s application.

2.The Board’s decision, evidenced by a letter to Ms Modini dated 26 March 2007, was based on its view that Ms Modini was not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers. It was considered that Ms Modini did not meet the qualifications of relevant employment required by the Income Tax Assessment Act 1936 (Cth.) (ITAA 1936) and the Income Tax Regulations 1936 (Cth.).

3.In the reasons that follow, I propose to detail some uncontroversial facts by way of background. Then I shall examine the legislation that governs this application before considering the basis on which it is said that Ms Modini does not satisfy the requirements for registration, making findings on matters of controversy in doing so, before determining, based on those findings, the correct or preferable decision.

Background

4.Ms Modini has a long history of dealings with the Board that are relevant to the questions in issue here. She has previously applied for registration as a tax agent and has been refused. Her first application was in October 1999. This application was withdrawn. The second application was in March 2001. The Board refused it. She made a third application in January 2003. The Board again refused registration. This decision was the subject of an application to this Tribunal. The Board’s decision was affirmed[1], essentially on the basis that Ms Modini had not demonstrated ‘relevant employment’[2]. Ms Modini sought an extension of time within which to appeal that decision to the Federal Court however Kiefel J refused that application on 6 May 2005[3]. Ms Modini made another application to the Board in September 2004. The Board refused it on 26 April 2005. That decision was the subject of another unsuccessful application to this Tribunal[4]. There was an appeal by Ms Modini to the Federal Court from this decision. The appeal was remitted to the Federal Magistrates’ Court[5] and subsequently discontinued by Ms Modini.

[1]See Re Modini and Tax Agents’ Board (Qld) [2004] ATC 2062.

[2] See Regulation 156(6), set out in para. [12] below.

[3]        See Modini v Tax Agents’ Board (Qld) (2005) 59 ATR 241.

[4]See Re Modini and Tax Agents’ Board (Qld) [2006] ATC 2001.

[5]        See Modini v Tax Agents’ Board of Qld [2006] FCA 797.

5.The common theme of the Board’s decisions was that Ms Modini did not satisfy the requirement of relevant employment. As I have observed, Ms Modini’s application in September 2006 was not made in the conventional form; rather, it took the form of a letter which was somewhat argumentative, but which also provided additional details of relevant employment that she had undertaken. In October 2006, Ms Modini wrote to the Board and advised that her relevant employment was as follows:

·1 July 2001 to 24 November 2001 – Stuart Hunter & Associates

·1 July 2002 to 4 January 2003 – Bachmann Robinson

·7 May 2005 to 5 July 2005 – Swayne & Hutley.

6.In February 2007, Ms Modini wrote to the Board and advised that her employment was calculated as follows:

·Stuart Hunter & Associates :             4.75 months

·Bachmann Robinson :   6 months

·Swayne & Hutley :   1.5 months

·H&R Block:   0.5 months

·Other tax agent:   1.5 months

TOTAL:   14.25 months

7.The Board considered Ms Modini’s application at its meeting on 12 March 2007. The Board refused the application and notified Ms Modini of its decision by letter dated 27 March 2007. Ms Modini lodged an application to review that decision in this Tribunal on 23 April 2007.

8.The case that the Board originally advanced relied upon two bases for contending that the decision under review ought to be affirmed. It is said that Ms Modini is not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers because (a) she does not satisfy the requirement of relevant employment, and (b) by persisting in making “unsubstantiated allegations of bribery, incompetence and corruption against parties involved in her previous applications”, she has demonstrated that she is not of good fame, integrity and character. Ms Modini contends to the contrary. The contentions require an examination of the requirements outlined in the ITAA 1936 and the Regulations.

The Statutory Framework

9.Part VII A of the ITAA 1936 deals with the registration of tax agents. A person seeking registration as a tax agent may make application to the Tax Agents’ Board[6]. By virtue of s 251JA(1) of the ITAA 1936, the Board is required to register a natural person applicant as a tax agent if satisfied that,

“(i)the applicant is a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters; and

(ii)the applicant is not an undischarged bankrupt.”

[6] Section 251J, ITAA 1936. By virtue of s 251C of ITAA 1936 there is a Board in each State.

There is no issue of bankruptcy in Ms Modini’s application.

10.Section 251BC of ITAA 1936 sets out some particular circumstances where a person is not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters[7]. Those circumstances include, relevantly, that the applicant is not of good fame, integrity and character[8], and that the applicant does not hold the prescribed qualifications[9].

[7]       For the sake of simplicity I will use the shorthand expression “fit and proper person” to encompass the statutory expression.

[8] Sub-paragraph (d) of s 251BC(1).

[9] Sub-paragraph (b)(ii) of s 251BC(1).

11.Income Tax Regulation 156 prescribes the qualifications. Each of sub-regulations (2), (3), (4) and (5) sets out ways in which the requirement for qualification may be satisfied. Ms Modini relies upon Regulation 156(2). It is in these terms:

“(2)A qualification is that a person:

(a)has successfully completed the academic requirements for the award of a degree, diploma or other qualification from:

(i)     an Australian university; or

(ii)     a college of technical and further education; or

(iii)    another educational institution of an equivalent standard; and

(b)either:

(i)     has successfully passed examinations in the subjects (however named) which an appropriate authority
of that university, college or institution certifies
to the Board to represent a course of study in accountancy of not less than 3 years duration (including a course of study in commercial law of not less than 18 months duration); or

(ii)     has such other qualification as the Board regards as equivalent to that qualification; and

(c)has:

(i)     been engaged in relevant employment on a full‑time basis for not less than a total of 12 months in the preceding 5 years; or

(ii)     otherwise been engaged in relevant employment to an extent that the Board regards as equivalent to the employment mentioned in subparagraph (i); or

(iii)    been engaged in such other employment, and for such time, as the Board regards as equivalent
to being engaged in the relevant employment mentioned in subparagraph (i); and

(d)has successfully completed a course of study in Australian income tax law that is acceptable to the Board.”

It is not in issue here that Ms Modini satisfies the requirements of paragraphs (a), (b) and (d).  The issue is whether she satisfies the requirement of sub-paragraph (c) to have been engaged in relevant employment for the required period.

12.Regulation 156(6) gives content to the expression relevant employment.  It provides:

“(6)In this regulation:

relevant employment means employment by a person or a partnership, or as a member of a partnership, in the course of which there has been substantial involvement in income tax matters including:

(a)the preparation or examination of a broad range of income tax returns; and

(b)the preparation or examination of objections to assessments issued in respect of such returns; and

(c)the provision of advice in relation to income tax returns, assessments or objections.”

The Issues to be Decided

13.The issues to be decided are these:

(a)does Ms Modini satisfy the requirement of relevant employment;

(b)is Ms Modini otherwise a fit and proper person.

Ms Modini’s Relevant Employment

14.It is as well to start with the remarks of Davies J, frequently quoted in the present context, regarding the standards to be expected of registered tax agents. His Honour said[10]:

“the function of a tax agent is to prepare and lodge income tax returns for other persons. A person is a fit and proper person to handle the affairs of a client if he is a person of good reputation, has a proper knowledge of taxation laws, is able to prepare income tax returns competently and is able to deal competently with any queries which may be raised by officers of the Taxation Department. He should be a person of such competence and integrity that others may entrust their taxation affairs to his care. He should be a person of such reputation and ability that officers of the Taxation Department may proceed upon the footing that the taxation returns lodged by the agent have been prepared by him honestly and competently.”

[10]        Su v Tax Agents’ Board (SA) (1982) 61 FLR 1 at pp 4-5.

15.In Stasos v Tax Agents’ Board (NSW)[11] Hill J qualified those remarks, observing that Davies J had,

“stated too narrowly the functions of a tax agent by limiting these to the preparation of returns.”

[11] 90 ATC 4950 at 4,959.

16.Regulation 156(2)(c) emphasises the need for practical experience as well as academic qualification by requiring 12 months of full-time relevant employment—substantial involvement in the preparation or examination of a broad range of income tax returns, assessments and objections and in the provision of advice—in the 5 years preceding the application[12]. The Board has a policy, which I regard as being soundly based and consistent with the legislation, of requiring employment totalling 1,680 hours, that is, of treating a year of full-time employment as amounting to 48 weeks at 35 hours per week, but it is accepted that is not an absolute. In addition, it is insufficient to merely demonstrate satisfaction with the quantitative requirement of 12 months employment (or its hourly equivalent), a fortiori where, as here, there is a contest about the quality of the work performed. That is implicit from the need to prepare returns competently and to deal competently with the Commissioner’s officers. It will be necessary, in the present case, to consider both quantitative and qualitative issues.

[12]      On one view of the matter it might be thought that the period ought be the 5 years immediately preceding the hearing rather than that preceding the application. I propose to adopt the view most favourable to Ms Modini and consider the period preceding the application.

17.The Board has a policy of requiring applicants to provide certified evidence of relevant employment in a document called a “Statement of Relevant Employment”. It relies upon the endorsement of that practice by Senior Member Lindsay in Case 5/2004[13]. In that case the Senior Member accepted a submission that,

“insistence upon certification by a registered tax agent of satisfactory completion of relevant employment is appropriate and reasonable”.

[13] [2004] ATC 168 at 173, [14].

I agree. However the requirement of a Statement of Relevant Employment is one of convenience; it is not mandated by the legislation. Where, as here, an applicant has not obtained certification in the form required by the Board it seems to me that I am bound to consider the evidence in whatever form it is provided to determine whether the employment relied upon is sufficient and relevant.

18.Before examining the evidence regarding Ms Modini’s relevant employment, I should mention her professional qualifications and some of her employment history that she says is relevant to the question of her competence. Ms Modini holds the degrees of Bachelor of Arts (Sydney University) and Bachelor of Commerce (James Cook University). The latter degree was awarded, (or at least her course was completed), in 1992. Thereafter she undertook the Professional Programme of CPA Australia to qualify as a Certified Practising Accountant in 1996. She completed the requirements of a Public Practice Certificate in 2001.

Relevant employment – a quantitative assessment

19.It must be said that it is not easy to determine the precise number of hours that Ms Modini worked although, as I have said, the Board’s benchmark of 1,680 hours is not an absolute.

20.The first relevant employment was with Stuart Hunter & Associates where Ms Modini worked from 1 July 2001 to 23 November 2001, a period a little short of five months. Part of that employment falls outside the period of five years preceding the application to the Board in issue here. The Board calculated that during the relevant period, from 27 September 2001 to 23 November 2001, Ms Modini completed 294 hours of employment. I accept that calculation. Ms Modini completed a Statement of Relevant Employment in relation to that employment in which she indicated that she prepared 85 individual tax returns and one each for a partnership, a trust and a company.  She disclaimed any experience in that period with either the preparation or examination of objections or in the provision of taxation advice.

21.The next relevant employment was with Bachmann Robinson between July 2002 and early January 2003. On the Board’s calculation, Ms Modini completed 959 hours of employment and I did not understand Ms Modini to suggest to the contrary. In a period of four months within that overall period, Ms Modini prepared, or examined under supervision, 235 individual tax returns and four partnership returns. I am prepared to accept that for the whole of the period of that employment the numbers of returns prepared were somewhat higher than for the four-month period. The Statement of Relevant Employment completed by Mr Peter Robinson of Bachmann Robinson indicates Ms Modini was involved in giving taxation advice but not in the preparation or examination of objections.

22.The next relevant employment was with Swayne & Hutley. Swayne & Hutley employed Ms Modini on a part-time basis between 10 May 2005 and 5 July 2005. In that time, she prepared 24 individual returns, two partnership returns, three company returns, and one trust return. The Board has calculated that employment equated to 200 hours, which I accept.

23.There are three further periods of relevant employment. The first is employment at H & R Block, Booval. Ms Modini identified this entity as an employer in dealings with the Board in October 2006 but she advised the Board’s then Acting Assistant Secretary Mr Wise that she did not propose to rely upon that employment to satisfy the requirements for relevant employment. Mr Wise confirmed to Ms Modini in a letter dated 9 October 2006 that the Board required either a Statement of Relevant Employment from, or the consent of, H & R Block before that employment could be relied upon as satisfying the requirements of Regulation 156(6). Eventually, H & R Block provided a Statement of Relevant Employment to the Board indicating that Ms Modini had been engaged on an irregular basis in July and August 2005. That document indicated that she had prepared or examined 36 individual returns in an employment period of 57 hours. The evidence of Ms Modini was that she had prepared almost twice this number of returns and that some of them involved a degree of complexity. In addition, she said that she had occasionally provided advice to customers on ways to improve their tax situation.

24.Ms Brennan, counsel for the Board, submitted that whatever work may have been undertaken by Ms Modini at H & R Block, it could not be relied upon as amounting to relevant employment because Ms Modini was not engaged as an employee but as an independent contractor. Ms Modini agreed that she “worked as a contractor under [her] ABN” while employed at H & R Block and with Ann Woods & Associates.

25.The Board relied on the decision of Pincus J in Tax Agents’ Board of Queensland v Seymour[14]. There, the applicant for registration had established a full-time business preparing tax returns for clients. He had an arrangement with a registered tax agent, Ballard, whereby Ballard signed the returns as agent and charged a fee but “made no effective contribution in the contribution of the returns”. An applicant for registration was required by the Regulations then in force to have been in relevant employment, meaning “employment by a person or a partnership or as a member of a partnership in the course of which there has been a substantial involvement in income tax matters…” The Tribunal concluded that the applicant was “employed” in the manner described, but the Board’s appeal was allowed and the decision set aside. The essence of the reasoning of Pincus J appears from this passage[15]:

“In summary, it is my view that the word ‘employment’ in reg 58CA is used in a sense which excludes those simply working alone in their own business – the so-called ‘self-employment’. It follows that the respondent was not qualified under that regulation.”  

[14] (1990) 21 FCR 357.

[15] Ibid. at p. 362.

26.The position of Ms Modini’s employment at H & R Block was not the subject of any detailed examination. The Board did not refer to this contention in its Statement of Facts and Contentions and, in consequence, the matter was subject to scant attention in the course of evidence. However, as it seems to me, the situation in Seymour was markedly different to that of Ms Modini. In Seymour the applicant for registration was working alone and without supervision by a registered tax agent. The position of Ms Modini was quite different. Her work was supervised and she was not free of control and direction by the principal of H & R Block. An arrangement of engaging Ms Modini as an independent contractor, rather than as an employee, was no doubt economically convenient for both H & R Block and Ms Modini, but I cannot conclude that it deprived H & R Block of the capacity to supervise and control the work of Ms Modini. It is that supervision and control that I regard as the crucial element of “employment” in Regulation 156(6) of the Income Tax Regulations.

27.Ms Modini gave evidence of employment with the firm Crisp Lynch & Fagg (Consulting) in July 2004 for a period of two weeks. She said that she worked for 25 hours each week and had prepared six individual returns. Mr Crisp, from that firm, had prepared a Statement of Relevant Employment in early July 2007. Ms Modini said she had misplaced that document. She made no effort to obtain a replacement or any equivalent evidence, including any evidence from Mr Crisp. The Board submitted that I ought disregard this claim as no mention had been made of this employment in the earlier hearing (on 16 November 2005) before Member Levy and there was no evidence corroborating her claim. Indeed, the first mention made by Ms Modini of this employment came when she lodged her Statement of Facts and Contentions in the Tribunal on 8 June 2007. That document made mention of employment with Crisp Lynch and Fagg (Consulting) in July 2004 and referred to an “attached PAYG”. So far as I can tell there was no “PAYG” attached to the document lodged in the Tribunal. However, Ms Modini sent a PAYG Payment Summary[16] from this employment to the Tribunal just prior to the hearing of this application.

[16]        Exhibit 5 in the proceedings.

28.There is a deal of force in the Board’s criticism but it seems to me that I ought accept the thrust of the evidence given by Ms Modini on this aspect of the matter. The PAYG Payment Summary supports the evidence of employment for a period just short of two weeks and the gross payments are consistent with approximately 50 hours of employment. Notwithstanding considerable doubts, I am not prepared to reject Ms Modini’s evidence regarding the nature of the work undertaken by her.

29.The final employment relied upon by Ms Modini was with Ann Woods & Associates. In her correspondence with the Board in September and December 2006, Ms Modini referred to the fact of this employment but not the name of the employer. She disclosed the name of the employer in her Statement of Facts and Contentions lodged in June 2007. Ms Modini gave evidence of having worked at that firm for a period of 123 hours in April and May 2006. During this time, Ms Modini prepared mainly individual returns (the number never emerged clearly) and perhaps some partnership and trust returns. The arrangement for the engagement of Ms Modini was the same as that with H & R Block. Again, I accept that this was employment as defined.

30.The result of this is that Ms Modini, on my calculations, satisfies the quantitative requirement of 1,680 hours. I reach this conclusion on this basis:

Employer  Period  Hours

Stuart Hunter & Associates           9/01 to 11/01   294  

Bachmann Robinson  7/02 to 1/03   959  

Swayne & Hutley  5/05 to 7/05   200

H & R Block, Booval  7/05 to 8/05   57

Crisp, Lynch & Fagg (Consulting) 7/04   50

Ann Woods & Associates              4/06 to 5/06    123

Total  1,683

31.I am satisfied that Ms Modini, in the period of five years prior to her most recent application, was engaged in the equivalent of 12 months of employment. Whether that amounted to relevant employment is the next question to be determined. In reaching this conclusion, I have treated the period of five years as concluding at the date of the application, the course adopted by Deputy President McMahon in Re Egulian and Tax Agents’ Board of New South Wales[17]. There is a contrary line of authority, exemplified in the decision of Deputy President Forgie in Re Webb and Tax Agents’ Board of Queensland[18]. Those cases treat the hearing date as the end of the period of five years. Were I to have adopted that latter approach, Ms Modini would have been considerably short of 12 months employment in the preceding five years.

[17] 91 ATC 2060. That decision was referred to with evident approval by Nicholson J, with whom Tracey J agreed, in Shi v Migration Agents’ Registration Authority (2007) FCR 525 at [10].

[18] 92 ATC 2101.

Relevant employment – a qualitative assessment

32.There are two aspects of this issue (1) does Ms Modini have a sufficient exposure to the range of work required by the Regulation and (2) does the material demonstrate a sufficient level of competence. In my view, Ms Modini does not satisfy either of these requirements.

33.Regulation 156(6) requires that the applicant for registration have been engaged in employment that involves substantial involvement in income tax matters, including the preparation or examination of a broad range of income tax returns and assessments, the preparation or examination of objections and the provision of advice. In considering whether Ms Modini’s employment demonstrates “substantial involvement” in the matters required it is proper to start from the premise that Ms Modini has superior academic qualifications and qualifications in accountancy to many persons registered as tax agents, a point that she was at pains to emphasise in the course of the hearing. On that basis, I am prepared to accept, for the purposes of the present discussion, that she has a superior grasp of the academic and accounting concepts involved. But that seems to me to miss the point.

34.Regulation 156(2), broadly expressed, requires an applicant to have satisfied four criteria: (1) the completion of a degree etc, (2) completion of a course of study in accountancy, (3) relevant employment, and (4) completion of study of income tax law. The first, second and last of these requirements may be considered to be of an academic or theoretical nature. The requirement of relevant employment involves demonstrated experience in the practical application of the academic or theoretical knowledge. Ms Modini lacks this practical experience.

35.Ms Modini’s evidence demonstrates she has significant experience with the preparation of individual tax returns, and limited experience with the preparation of partnership, company, and trust returns. On her evidence, she lacks substantial involvement in the preparation or examination of income tax objections and could not be said to have given advice on income tax returns or objections except to a minor degree. I am not satisfied that she has had the substantial involvement in income tax matters required. Whilst Ms Modini gave evidence of other employment, e.g. at St Edmunds College and as a consultant, I would not regard that employment as an equivalent to the relevant employment required.

36.I mention Ms Modini’s reliance upon the decision of Senior Member Allen in King and Tax Agents’ Board of New South Wales[19]. The case decides no issue of principle and the decision of the learned Senior Member is entirely explicable having regard to the very considerable experience of the applicant in that case. However, that experience was significantly greater than that evidenced by Ms Modini.

[19] (1994) 28 ATR 1047.

37.I am not satisfied on the evidence that Ms Modini has the necessary degree of competence required for registration as a tax agent. There is no question of an onus of proof in proceedings in the Tribunal and, in the discussion that follows, I do not suggest one is imposed upon Ms Modini or, for that matter, the Board. But the present is a case where the competence of Ms Modini is, and always has been, very much in issue. Notwithstanding the Board’s[20] submission, it is neither necessary nor desirable for me to consider whether Ms Modini was incompetent. Nevertheless, I am required to be satisfied that she is competent.

[20]See paragraph [34] of Exhibit 13.

38.There is a considerable body of material that brings Ms Modini’s competence into question. The Board put before me an extract of the evidence of Mr Hunter from the earlier hearing before Dr Levy in which Mr Hunter was critical of Ms Modini. There is a similarly critical note from Mr Wilson at H & R Block. There is some evidence, which Ms Modini accepts, that while at Ann Woods & Associates some of her work had to be re-done. I would not rely upon this material to make findings that were critical of Ms Modini. However, where the issue is raised I am required to be satisfied that Ms Modini is competent.

39.There are, no doubt, many cases where the absence of any question of competence permits the Board or the Tribunal to accept that an applicant was competent. This is not such a case. Ms Modini has been employed at a number of firms in the past few years. There is no evidence, using the word in its widest sense, from any employer attesting to the competency of Ms Modini to undertake the work of a tax agent. The totality of the evidence is from Mr Thompson, Ms Modini’s local Member of Parliament. He expressed the opinion, in writing, that she was “well qualified to do the work [of a tax agent]”. However, Mr Thompson’s opinion was not informed by any awareness of the legislative requirements for registration as a tax agent. In addition, Mr Thompson referred to one of Ms Modini’s clients telling him they had been impressed with the work done by Ms Modini in relation to their tax affairs. That evidence does not enable me to be satisfied of Ms Modini’s competence where there is a considerable body of material that points to a contrary conclusion.

40.It follows that Ms Modini does not satisfy the requirement of Regulation 156(2)(c) and thus does not hold the prescribed qualifications. Because she does not satisfy s 251BC(1)(b)(ii) of ITAA 1936 I am not satisfied that she is a fit and proper person.

A Fit and Proper Person - Otherwise

41.In light of my earlier conclusion it is, strictly speaking, unnecessary for me to make findings on this aspect of the matter. However, I propose to deal briefly with the issue against the possibly that my earlier conclusion were to be affected by an error of law.

42.The question posed is whether Ms Modini is a fit and proper person in the sense used in ITAA 1936. A person is not a fit and proper person in the various ways set out in s251BC(1) of the ITAA 1936. Paragraph (b) has been dealt with. None of the matters in paragraphs (a), (c), (e), or (f) are in issue. What remains in issue is paragraph (d). A person is not a fit and proper person if the person is not of good fame and character. The scheme of s 251JC(1)(a)(i) and s 251BC(1) of ITAA 1936 is that the latter defines some matters where a person is taken not to be a fit and proper person. However, s 251BC(1) does not define exhaustively the matters that may determine whether a person is a fit and proper person. Thus the question whether Ms Modini is a fit and proper person is to be determined by reference to the matters in s 251BC(1) (and in this case it is only the “good fame, integrity and character” test in paragraph (d) that is said to be in issue) and then by reference more generally to the question.

43.In considering the issue of a fit and proper person, it is unwise to attempt to define the matters that may legitimately be considered. Every case must depend upon its own circumstances[21]. As Hill J observed in Stasos v Tax Agents’ Board (NSW)[22], the content of what is necessary to constitute a person a fit and proper person to occupy a particular office may vary having regard to the office or vocation under consideration.

[21]        Hughes and Vale Pty Ltd v The State of New South Wales (No 2) (1955) 93 CLR 127, 157.

[22] 90 ATC 4950 at 4,959.

44.The Board’s case in relation to this issue was put in this way in the Board’s final submissions::

“In this matter the applicant has continued a consistent pattern of offering personal, unreasoned and unfounded abuse to those who have differences with her in the work place i.e. members of the respondent and those tax agents who have questioned her competency even in circumstances where she admits that her work for those agents had to be redone.”

45.The evidence amply supports that proposition. In the course of the hearing, Ms Modini engaged in an almost endless pattern of denigration of those whose views differed from hers. She spoke of being “less than impressed” by the standards of some sole practitioners for whom she had worked. Of one of her employers she said, “people were phoning there all the time complaining about [him]”. Of another, she said, “personnel agents in Townsville avoid him”. A third “should not have been registered”. A former employee of the Board was, “running his own little secret society”. Her contempt for tax agents whose qualifications she regarded as being less than hers was manifest throughout the hearing. Her written material referred, for example, to the Board “constantly passing applications from people with no professional qualifications and other incompetent people”. She referred to the “gross incompetence” of two members of the Tribunal who had affirmed decisions refusing her earlier applications for registration.

46.It is not necessary for me to reach any conclusions about the subject matter of Ms Modini’s complaints and I do not suggest, for a moment, that anyone, including members of the Tribunal, is, or should be, immune to criticism. However, whether Ms Modini is right or wrong in her views, her criticisms are irrational, unreasonable, and go far beyond the bounds of what might be regarded as being proper or appropriate. The notion of respectful disagreement is entirely foreign to Ms Modini. No criticism of her is warranted (in her view) and when made it is responded to in an abusive and hectoring manner. That pattern appears frequently in the material in the case.

47.Part of the task of a registered tax agent is to deal with officers of the Commissioner of Taxation, often in the context of a disagreement regarding the revenue consequences of a client’s transactions or business. A tax agent is not expected to be deferential to officers, but the dealings between officers and tax agents need to be professional, civil, and rational. Ms Modini’s evidence satisfies me she is not capable of conducting a professional and reasoned dialogue with an officer (or others) with whom she had a disagreement.

48.In Stasos v Tax Agents Board (NSW)[23] Hill J said:

“In addition to the tax agent dealing with his client, he will, almost invariably have dealings with officers of the Australian Taxation Office and perhaps boards and tribunals to which I have already referred. Those dealings must be able to be carried on in an atmosphere of mutual trust.”

[23] 90 ATC 4950, 4,959.

49.I am well satisfied by the evidence that that “atmosphere of mutual trust” could not be developed by Ms Modini. It would be to the considerable disadvantage of clients of Ms Modini that their representative could not deal appropriately with the Commissioner of Taxation in discussions on her clients’ behalf  and, for this additional reason, I am not satisfied for this additional and independent reason that Ms Modini is a fit and proper person.  

50.It follows that in these circumstances I would affirm the decision under review.    

I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC

Signed:         .....................................................................
           Eleanor O’Gorman, Associate

Dates of Hearing  4-5 September 2007
Date of Decision  2 November  2007
Applicant in person                   
Counsel for the Respondent     Ms M Brennan   
Solicitors for the Respondent    Australian Government Solicitor