Patterson and Tax Agents Board of New South Wales

[2004] AATA 771

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 771

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2003/1703

GENERAL ADMINISTRATIVE  DIVISION		)
Re		Anthony Constantine Patterson

Applicant

And Tax Agents Board Of New South Wales

Respondent

DECISION

Tribunal P.J. Lindsay, Senior Member

Date21 July 2004

PlaceSydney

Decision For the reasons given orally at the hearing, the tribunal directs that the application be dismissed under s.42B(1)(a) of the Administrative Appeals Tribunal Act 1975.

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

(sgd) P.J. Lindsay, Senior Member

CATCHWORDS 

Application for re-registration of partnership as tax agent in 2001 – Board refuses re-registration – evidence at hearing that partnership was dissolved in 1998 – Board’s decision to re-register partnership in 1998 a nullity – Board’s decision to re-register in 2003 also null and void – application for review untenable – application dismissed because frivolous or vexatious.

Income Tax Assessment Act 1936 ss.251JC, 251JD, 251JE, 251QA

Administrative Appeals Tribunal Act 1975 s.42B

Burton v President of the Shire of Bairnsdale (1908) 7 CLR 76

REASONS FOR DECISION

P.J. Lindsay, Senior Member        

1. At its meeting on 18 September 2003 the Tax Agents Board of New South Wales resolved to refuse to re-register a partnership, NSW Tax Services, as a tax agent pursuant to s.251JC of the Income Tax Assessment Act 1936 (the Act).    The Board notified Anthony Patterson (the applicant), a registered nominee of the partnership, that

Having regard to the concerns that the Board has raised in the above mentioned letters, [28 January 2002, 30 July 2002, 4 June 2003 and 2 July 2003], you have failed to satisfy the Board that each partner is of good fame, integrity and character.(T2 in the documents lodged with the Tribunal under s.37 of the Administrative Appeals Tribunal Act 1975 (AAT Act))

2.      Mr Patterson has applied to the Administrative Appeals Tribunal for review of that decision.  Section 251QA of the Act provides:

Review of decisions

Applications may be made to the Tribunal for review of the following decisions of a Board:

(a) a decision refusing to register a person or a partnership as a tax agent (not being a decision under Subdivision D of Division 3);

(b) a decision refusing to re-register a tax agent;

(c) a decision refusing to allow a later time for the making of an application for re-registration as a tax agent;

(d) a decision to suspend or cancel the registration of a tax agent;

(e) a decision refusing to register a person as a nominee of a tax agent;

(f) a decision refusing to re-register a person as a nominee of a tax agent;

(g) a decision refusing to allow a later time for the making of an application for re-registration as a nominee of a tax agent;

(h) a decision to cancel the registration of a nominee of a tax agent.

3.      Mr Patterson was represented at the tribunal’s hearing by Mr J Capsanis, solicitor, and Mr Allatt from the Australian Government Solicitor appeared for the Board. 

background

4.      Mr Patterson, who is aged 60 is a solicitor and accountant.  His statement made 21 July 2004 was received in evidence as Exhibit A1.  His statement reads

3.  On the 28^th March 2001, I applied to the Tax Agents Board of NSW for re-registration as tax agent in relation to the entity NSW Tax Services (‘NSW TS’)

4. I have been a registered tax agent since  the early 1980s.  I have maintained my registration as a registered tax agent continuously since that date subject to the current matter before the Tribunal in relation to application for re-registration lodged 28^th March 2001 in respect of the said entity NSW TS.

5. My registration as tax agent has been in the capacity either individually, in partnership and or as nominee of various corporate entities.  In particular, it comprised one individual, two partnerships and two companies.

6. The said NSW TS was one such partnership.

7. A copy of the said application for re-registration in relation to NSW TS together with schedule of personal details and covering letter dated 28^th March 2001 under which the same were forwarded comprises the attachment hereto marked with the letter ‘A’.

5.      In evidence, Mr Patterson said that his daughter Renee, also a solicitor and accountant, works for him and filled in the application for re-registration for NSW Tax Services dated 28 March 2001 (T4).  Question 6 of that form asks ‘The following information is requested for all nominees, all partners of partnerships and all executive officers of companies.  You must show all partners, directors and nominees’.  However, particulars were given of only one partner, the applicant.  Mr Patterson said in evidence that his daughter completed the application for re-registration by copying the details found in the earlier application by NSW Tax Services for re-registration that had been lodged with the Board in February 1998 (Attachment B to Exhibit A1).

6.      Mr Patterson told the tribunal that he and his wife had been the only partners in NSW Tax Services.  He said that his wife is no longer a partner.  She ceased to be a partner prior to the application for re-registration of NSW Tax Services in 1998.  He said that although there was no legal document to say that the partnership had been dissolved or that his wife had withdrawn, it was their common intention that she do so because she was withdrawing from participation in their family businesses, including a number of practice companies controlled by Mr Patterson, to limit her exposure to liability for claims.

7.      The Board wrote to Mr Patterson on 28 January 2002 noting that it appeared that changes had been made in the partnership since its last re-registration and that he was required to notify the Board of such changes.  The Board wrote again to him on 30 July 2002 to remind him that he was under a duty to respond to the Board’s correspondence.

8.      By letter dated 4 June 2003, the Board informed Mr Patterson that failure to respond to its correspondence may lead to cancellation of the registration of NSW Tax Services. 

9.      Mr Patterson said that Renee had discussions with representatives of the Board during the period January 2002 to June 2003.  He thought he also had a discussion with a Board representative.  In any event, NSW Tax Services replied to the Board on 1 July 2003.  Mr Patterson said that, although he was overseas at the time, the letter had been read to him over the telephone by his daughter.  In part, that letter said 

We believe that the application form received by the Board on the 30 March 2001 may have inadvertently contained errors.  We advise that we are currently in the process of confirming any changes which may have occurred within the partnership since it was last registered so we can advise the Board accordingly (T8)

Mr Patterson explained in evidence that this passage was in error because his wife ceased to be a partner from 1998.

10.     The Board’s response was again to request the information sought since January 2002 regarding changes in the partnership.  Mr Patterson was informed that the matter would be heard by the Board at its first meeting in August 2003 with or without his response. 

11. At its meeting on 18 September 2003, the Board resolved to refuse to re-register NSW Tax Services as a tax agent pursuant to s.251JC of the Act.

12.     In explanation for the delay in responding to the Board’s correspondence, Mr Patterson informed the Tribunal that he had been occupied with caring for his elderly parents from about 2000.  Prior to his mother’s death on 30 May 2002, he was regularly visiting her in hospital.  He also had health problems. He has suffered from back spasms since 1992 and in 2000 developed a chronic chest infection.  Two invoices from Dr Jarvie, physician, were tendered in evidence (Exhibit A2) referring to consultations with Mr Patterson in around July and August 2003. Mr Patterson said that he was overseas in June and July 2003 and again contracted a severe chest infection.  He consulted Dr Jarvie on his return.  He did not recall the Board’s letters of June and July 2003 being brought to his attention when he came back to Australia.  During 2002 and 2003 he said he had been very busy with the affairs of clients who were ill or had suffered debilitating injuries.

considerations and findings

13.     During the course of the hearing it became apparent from Mr Patterson’s evidence that the partnership, NSW Tax Services, had ceased to exist prior to that partnership’s application for re-registration as a tax agent that had been lodged in February 1998.  A consequence of that change in constitution of the partnership was that its registration thereupon was terminated.  This is the effect of s.251JD which provides

Registration of a partnership terminated if constitution changes

Where:

(a) a partnership is registered as a tax agent; and

(b) there is a change in the constitution of the partnership;

the registration shall be taken to be terminated at the time of that change.

14.     I am satisfied that the partnership’s constitution changed early in 1998 and in fact the partnership thereupon ceased to exist. I make that finding based on the applicant’s oral evidence.  Also relevant is s.251JE of the Act which provides for the registration of successor tax agents where the registration of an original partnership has been terminated by force of s.251JD. Subsection 251JE(4) requires an application for registration of a successor tax agent to be made within 30 days after termination of registration of the original partnership.  I find that no such application was made within that time frame in this matter. 

15.     It is evident therefore that the Board’s re-registration of NSW Tax Services in February 1998 was a nullity. Moreover, as registration of that partnership terminated early in 1998, the application for re-registration lodged in March 2001 should not have been entertained by the Board.  The Board’s decision on 18 September 2003 refusing to re-register NSW Tax Services was also a nullity.

16.     Both parties acknowledged that the Board’s consideration of the application  for re-registration of the partnership was otiose.  What then should the Tribunal do with the application? The applicant wished me to set aside the findings made in the Board’s letter dated 25 September 2003 to the effect that Mr Patterson, as nominee of the partnership, was not of good fame, integrity and character.  The respondent opposed such action.  

17.     Section 42B of the AAT Act relevantly provides:

Power of Tribunal where a proceeding is frivolous or

vexatious

(1) Where an application is made to the Tribunal for the review of a decision, the Tribunal may, at any stage of the proceeding, if it is satisfied that the application is frivolous or vexatious:

(a) dismiss the application; and

(b) if the Tribunal considers it appropriate, on the application of a party to the       proceedings, direct that the person who made the application must not,   without leave of the Tribunal, make a subsequent application to the Tribunal         of a kind or kinds specified in the direction.

…

18.     As I am satisfied that the Board’s decision of 18 September 2003, including its findings, was null and void, there is no reviewable decision before the Tribunal.  In the circumstances the application before me is untenable.  I find that the application “ … is so obviously untenable that it cannot possibly succeed”  (Burton v President of the Shire of Bairnsdale (1908) 7 CLR 76 at 92 per O’Connor J) and accordingly I am satisfied that it is apt to describe the application as ‘frivolous or vexatious’. I direct pursuant to s.42B(1)(a) of the AAT Act 1975 that the application be dismissed.

I certify that the 18 preceding paragraphs are a true copy of the reasons for decision herein of P. J. Lindsay, Senior Member:

Signed:         
          ..................................................................................……………………………….

Associate

Hearing  21 July 2004

Decision  21 July 2004

Applicant’s solicitor  J Capsanis

Respondent’s solicitor                 M Allatt